United Way of Central Alabama

May, 2008

As a single mother, Helena, Alabama resident Kristi Gilmore didn’t think she would be able to buy a home until she heard about the Assets for Independence IDA program run by United Way of Central Alabama (UWCA). Using the 2 to 1 matched IDA savings account, she was able to make a down payment on her first home last June. “This program helped me to achieve my dream” Kristi says. “My children and I found the perfect home for our family.”

Two of UWCA’s Investors, Barry Kendrick and Kristi Gilmore used their IDAs towards a college education and purchasing a first home. Both used tax refunds to accelerate savings.

Organization Overview
United Way of Central Alabama (UWCA) has been serving low to moderate income residents for the last 85 years. The five-counties it serves are a mix of urban and rural residents and accounts for nearly one-quarter of Alabama’s population. UWCA believes that communities must work collaboratively to change the economic and social conditions that prevent people from leading healthy and productive lives. Nearly one third of Alabamians fall below 200% of the federal poverty level, the threshold for self-sufficiency. There is much work to be done in Alabama to strengthen the financial stability of hard working individuals and families.

UWCA brings together federal, state and local resources that enable families to move toward economic independence. In September 2005 UWCA was awarded its first Assets for Independence Grant from the Department of Health and Human Services to provide IDA Matched Savings accounts in Alabama; this was followed by two additional awards in 2006 and 2007.

Assets for Independence IDA Program
Partnering with the 52-member Alabama Asset Building Coalition, UWCA is the lead agency for Assets for Independence (AFI) in the state. Over the past two years, 139 people have enrolled for IDAs through UWCA’s Assets for Independence Program. Of that number, 109 have actually opened an IDA account and begun saving for a home, post-secondary education, or to start or expand a small business. The IDA program is a matched savings program. For every dollar an investor saves, the federal government contributes a dollar, and the community contributes another dollar. Investors have a minimum of 6 months and a maximum of 24 months to reach their savings goal. In addition, they complete a minimum of eight hours of financial education and four hours of training specific to their asset goal. In the last 15 months, six people have purchased homes with their IDA savings, one has utilized the funds to get an education, and one to expand a small business. More are scheduled to purchase their asset goals in the upcoming days and weeks.

Volunteer Income Tax Assistance Program
UWCA’s Volunteer Income Tax Assistance (VITA) program started as a component of the Assets for Independence initiative in early 2006. It has grown tremendously with the support of the IRS and community partners. The first year of offering VITA services, UWCA used an employer-based model, with one site at a local hospital and another at a manufacturer, and prepared 37 returns at the two sites combined. Last year, the second year of their VITA services, UWCA collaborated with five local partners in two counties, and the combined number of returns filed grew to 1,453. They were able to bring $1.8 million in refunds back to the community, and roughly $600,000 worth of Earned Income Credit. This year (the 2007 tax season), the program grew even more. With expanded partnerships, UWCA coordinated twenty sites in ten counties across the state. Four of those counties never had a VITA site before. Although final data is still pending, preliminary reports show 2,900 returns with federal refunds of $2.7 million, $1.1 million of that from EITC.

University of Alabama at Birmingham Accounting students volunteer through United Way’s VITA program

An Integrated Approach to Services
The success of UWCA’s initiative is due to their integrated approach in reaching prospective investors. When a person goes through the IDA program, they are also registered for financial literacy classes, credit counseling, and are informed of the VITA program. At the VITA sites, clients are informed of the IDA program, financial literacy classes, and the option of using part of their EITC refund to accelerate IDA savings. United Way’s 2-1-1 Information and Referral center directs clients to VITA sites throughout the state, and provides information about the IDA program. By offering comprehensive information about the services available at each contact point, UWCA increases opportunities for individuals to access the services they need to build their assets and make real changes in their lives.

Kristi Gilmore can attest to the changes that the United Way of Central Alabama makes in the lives of hard working families. With the help of their Financial Stability Partnership, she is now a proud homeowner and a dedicated proponent of their services. She has learned good financial practices that she can draw upon for the rest of her life.