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CWFs help boost income, cut costs

By Ed Finkel on Thursday, August 24, 2006

Centers for Working Families (CWF) offer a new twist on improving the financial well being of low-income working families. Rather than concentrating solely on employment services, the CWF model adds financial counseling, tax preparation assistance and public benefits screening to boost a household's economic health.

Being rolled out by LISC/Chicago and 13 partner agencies – 11 in NCP communities – the centers are based on an emerging national model developed through the Annie E. Casey Foundation.

They offer a uniquely integrated system of services, says Christopher "Happy" Tan, program officer with LISC/Chicago. "This is a much more holistic attempt to help people achieve financial stability," Tan says. "You have to pay attention to asset development, but just as important in the short term is the need to address debt — sometimes pretty crushing debt."

Boosting income is the other half of the equation. "If you only focus on controlling expenses and controlling debt ... they cannot get out of that cycle of paycheck, expenses, debt."

Tan recalls a conversation with Brenda Palms-Barber of the North Lawndale Employment Network, the first LISC partner to become a CWF. "Our problem with our clients is, they get paid on Friday, and they're broke by Monday," Palms-Barber told him. Tan adds: "The complaint of the households was, 'I already have a job, and in many cases I'm working two or three jobs, and I'm having difficulty making ends meet.' "

More than employment centers

The centers confront that problem by offering more than traditional employment services, says Ricki Lowitz, the LISC senior program officer who has shaped the local CWFs.

Lowitz worked with Project Match, a nationally respected workforce agency, to help neigh borhoods create programs that welcome any community resident, plus friends and family, and stick with them through multiple job placements to keep them employed.

The centers serve people who often don't qualify for traditional employment programs because they are not welfare recipients, dislocated workers, or part of another eligible category – or they lack required reading and writing skills, Lowitz says. Others who do qualify might be kicked out for poor attendance or other reasons, or, after being placed once, lose their jobs and cannot be placed again. "The CWFs don't cream," Lowitz says, referring to programs that serve only the most eligible clients.

Any site that calls itself a Center for Working Families also must bundle job-related services with one-on-one financial counseling, tax preparation and assistance in accessing public benefits. And each center develops partnerships with financial institutions to provide fairly priced financial products and services.

The financial counselors help with everything from getting out of debt, to starting to save, to moving upward into investments, Lowitz says. They can boost family income by as much as 25 percent with public benefits alone, and decrease expenses by, for example, setting up checking accounts to avoid the exorbitant fees at check cashing windows. Free tax preparation can make a huge difference: in 2006 the volunteer service organized by Center for Economic Progress generated $20 million for nearly 15,000 households. To provide financial advice that clients would trust, NLEN hired Tiffany Randle, a former portfolio analyst for Northern Trust. Near West Side CDC in West Haven hired Seung Kim, a former investment planner, and Southeast Chicago Development Commission in South Chicago hired Deidra Thomas, a former branch manager of Northern Trust Bank.

Taking a cue from the medical profession, counselors urge clients to never leave without making the next appointment. "They advise people on when they should come back: 'Come see me when you get a job, and we'll talk about your credit report,' " Lowitz says.

Eight sites online, more to come

Eight CWF sites are fully functional, in North Lawndale, Pilsen, West Haven, Quad Communities, South Chicago, Logan Square, West Garfield Park and Uptown. Together they provide employment services and/or free tax prep assistance to about 8,000 people a year. With new financial counselors on board, the number of people receiving one-on-one financial counseling is growing to roughly 200 per site.

Auburn-Gresham, Humboldt Park, Chicago Lawn, Washington Park and Woodlawn also plan to launch CWFs. LISC provides each site $50,000 per year for three years to pay for a full-time financial counselor. The sites must collect specific data on each participant and update an on-line database with all services provided and outcomes achieved.

The Pilsen site, operated by Instituto del Progreso Latino (IPL), has seen 1,500 clients for tax preparation services alone, a number that executive director Juan Salgado expects will grow. In 2006, the site generated $2.8 million in refunds

Salgado's organization has bundled services like employment, adult education, youth development and citizenship for 30 years, adding tax assistance three years ago and then financial services two years ago as it became part of CWF. He recalls reading about the concept of CWF and realized that the approach would click with IPL. "I immediately said, 'This is us. It's not a program within us, it is us,' " Salgado says. "We're leveraging, we're integrating, we're creating an initiative that's built into the fabric of the organization."

In West Haven, the CWF evolved out of a Home Visitors Program for residents of the Henry Horner Homes public housing complex. The previous program did not offer financial counseling or the same level of employment assistance.

"This has been really good for introducing financial education to families who otherwise would not have known anything about it, or thought about it," says Vorricia Harvey, program director. "We've been pretty successful in getting people better jobs and higher-paying jobs."

Among the local variations: Logan Square is building its program on an existing network of community schools, rather than an employment center. Greater Southwest Development Corp. (GSDC) will provide third-party verification of mortgage loan terms, as well as counseling for sub-prime mortgage borrowers prior to closing a loan. This is especially appropriate because GSDC fought for passage of a state anti-predatory lending law that requires those services.

Lessons learned

The CWF model has evolved based on local experience. Sites initially weren't required to hire in-house financial coaches, but training case managers to be bankers didn't work, and bringing in outside consultants didn't always provide the necessary personal touch and continuity of service.

Another lesson was that sites often spent too much time recruiting clients who were willing to make a long-term commitment upfront, rather than developing a counseling protocol – and quality of services — to make clients want to continue long term. Not surprisingly, groups learned that referrals from trusted people and group presentations by an impressive counselor would pique client interest. Referrals from staff they did not know or weak group presentations rarely prompted people to continue.

Image is important, too. Financial planning carries less stigma for working people than other social services, the sites learned, since the wealthy do it. But "you need extremely well-qualified financial counselors for people to get hooked," Lowitz says.