The IDA Match: The Gift that Keeps on Giving in Rural Communities

piggyThe holiday season comes with the annual barrage of messages about the great deals and ways to save on gifts. Fortunately, there are more ways to save than just shopping for bargains!

In rural communities, Individual Development Accounts are like a gift that keeps on giving. These matched savings accounts provide both a 2-for-1 (at least!) savings “bargain” for every family that builds an IDA account and provide value that lasts a long time. In short, IDAs provide rural working families with an opportunity to Grow It – to increase their assets and thus improve their livelihoods over time.

Whether the rural community you care about is new to IDAs, already running a program, or participating in a program headquartered elsewhere in your state, now is a good time to focus on how to tap into sources of “match dollars” for IDA savers.

There are two opportunities to consider right now. First, the 2013 deadlines for federal match dollars are now published online – and the first one is in January. You can now start planning grant requests. And second, perhaps you can channel some year-end giving in your community toward building additional local IDA match funds, or to support a local IDA program.

Individual Development Accounts: The Basics

Individual Development Accounts (IDAs) are matched savings accounts that help low-income people save money to acquire an appreciating asset, such as buying a home, paying for higher education or advanced training, or building a new or existing small business. Using a locally-assembled combination of federal and non-federal funds, community organizations provide a match of at least one dollar for every dollar the IDA accountholder saves each month. An increasing number of rural IDA initiatives are providing practical and doable strategies for low-income people to begin building assets, which helps improve their family’s financial well-being.

To learn more about rural IDA programs, watch The Road Less Traveled: Innovative Solutions in Rural IDA Programs, a webinar broadcast earlier this year by the Assets for Independence (AFI) Resource Center.

Where can I find an IDA program in my area?
Or, what should I do if I want to start an IDA?

Hundreds of IDA programs across the U.S. have been established to help rural families Grow It. To learn more about programs in your area, check out CFED’s IDA Program Directory or the Assets for Independence (AFI) Project Locator. You may want to contact organizations in your area for tips and ideas, or see if they are interested in collaborating to help local families build their assets using IDAs in your community.

Whether you have an existing program or you’re interested in starting a new IDA program in your area, consider applying for the Assets for Independence (AFI) 2013 grant program. Each year, the U.S. Department of Health and Human Services offers over $24million in AFI grants to communities throughout the country. AFI is the largest federal grant program that supports Individual Development Accounts (IDAs) by providing match dollars and program support to community-based organizations offering IDAs to low-income people. In the program’s 13 years, almost 80,000 families participating in AFI-funded projects around the country have used their IDA savings to acquire a long-term asset.

How do I apply for 2013 Assets for Independence (AFI) grants? Am I eligible?

Local non-profit 501(c)3 organizations and community development credit unions are eligible to be AFI grantees. State, local and tribal government agencies may also apply jointly with a nonprofit. More than half of AFI grantees are Community Action Agencies, human services organizations, or Community Development Corporations. Other common grantee types include local United Way agencies, Community Development Financial Institutions/Credit Unions, and nonprofit housing organizations. Other organizations may partner with these groups to deliver financial education, recruitment and referral services to IDA accountholders.

The 2013 AFI application deadlines are:

  • January 25, 2013
  • March 25, 2013
  • May 24, 2013

To learn more about applying for AFI, join these upcoming webinars:

What other steps can I take to support IDAs in my community?

The holiday season is the season of giving, and many of our neighbors are looking for ways to give to help struggling families. IDA programs need local financial support beyond what is available from AFI and other government programs.

IDA programs can use local support to:

  • Make accounts available to more families
  • Fill program gaps, such as expanding matches for savers who want to purchase essential rural assets like cars – which are not considered allowable assets for AFI dollar matching
  • Increase match ratios – giving families more for each dollar they save, thus speeding their family’s asset-building
  • Cover program administrative and support costs – which are rarely fully covered
  • Leverage additional government funding and matching dollars.

We’ve always loved the idea of starting an IDA match endowment fund at your local community foundation – and encouraging local givers who are looking for longer-term solutions to fight poverty to help build that fund over time. If local donors gave a dollar to an IDA match fund for every dollar they gave to a local food pantry, they’d be both taking care of today’s crisis and building a better tomorrow for low-income working families.

Bottom line: Contact your local IDA providers to see how you can organize a Holiday IDA support drive!

* Piggy picture provided by Ken Teegardin and licensed via Creative Commons. See Ken’s work here.

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