Imaginative EITC rural outreach: Fargo Moorhead

May 2006

Imagine you are in a rural area and interested in helping more people receive the EITC. You look around and see lots of small towns with no nonprofit agencies. You observe that nobody is doing any EITC outreach, there are no materials, no infrastructure, no history to build on. How do you get started? Who can you partner with? What do you aim for when the few free tax preparation sites have little surplus capacity?

Those were some of the questions facing Joe Pederson, Executive Director of Lakes & Prairies Community Action Partnership, Inc. of Moorhead, Minn. in 2005. Last year Lakes & Prairies Community Action Partnership celebrated its 40th Anniversary as a Community Action Agency with a mission “to assist low-income people in their quest for self-sufficiency”.

The first formal meeting of the Red River Community EITC Coalition was held in June, 2005. This meeting was an outgrowth of an earlier Earned Income Tax Credit study conducted by the National Community Tax Coalition, Chicago, Ill. which chose Lakes and Prairies Community Action Partnership as the lead agency for an Earned Income Tax Coalition Awareness Campaign.

A Coalition of 15 agencies was formed to expand awareness of this credit and thereby support economic progress for eligible individuals and families. The Coalition spread across two counties, Clay County Minn. and Cass County N.D., which are separated only by the Red River. As well as representation from regional and state organizations such as North Dakota State University Extension Services, University of Minnesota Extension Services, Children’s Defense Fund-MN, the IRS Regional Office, the Minnesota Workforce Center—Rural Minnesota Concentrated Employment Program, three Community Action Agencies representing 13 counties in North Dakota and Minnesota also were coalition members. SouthEastern North Dakota Community Action Agency worked to cover a six-county area and Lori Mattison, Self-Sufficiency Case Manager, provided a “Make Tax Time Pay” train-the-trainer workshop to help Coalition members share their knowledge with other agencies. In Fargo, Cultural Diversity Resource Center offered a VITA site for New Americans and others for whom English was not a primary language. CHARISM Community Centers furthered the network of information and resources in their communities and has talked about a possible VITA site in 2006. Cass and Clay County Social Service agencies provided a direct link to potential EITC recipients.

EITC Spokesperson Sandra Ly

A major partner and Coalition member is the West Central Initiative, a Foundation that covers nine counties in west central Minnesota. For the previous two years it has been funded in part by the Annie E. Casey Foundation to develop family economic success. Many of their partners were members of the Red River Community EITC Coalition. Their stepping to the plate allowed the work funded by NCTC to reach beyond the immediate study area and out to additional counties in Minnesota.

Bridging the Cass County, N.D. and Clay County, Minn. EITC effort was the United Way of Cass-Clay. Sara Kearns, Community Investment Director played a key role in maximizing the local awareness of this effort, including serving as the Marketing Committee chairperson who selected the company responsible for creating the marketing campaign and serving on the EITC kick-off committee. Nationally, the United Way of America has been working with EITC Awareness projects, expanding VITA sites, and Asset Development.

The Chamber of Commerce of Fargo Moorhead not only assisted throughout the project but brought the EITC issue to the forefront by making it a part of its 2006 Legislative Agenda.

Bremer Bank, which works in many rural communities in the two states, is also a partner. It is strongly aligned with the Otto Bremer Foundation which serves primarily rural communities in the area. Ubiquitous and local, the bank donates a significant part of its profits to the Foundation. The Foundation has funded child care clinics, cultural diversity organizations, grassroots advocacy organizations, and helped Lakes & Prairies Community Action Partnership increase their capacity.

The Coalition did not set its goal as getting more taxpayers to free tax preparation site, as many urban programs might have done. Being mostly rural, they lacked substantial VITA programs. Most towns have populations in the 2,000–5000 range or smaller. In the two counties, there are only five VITA programs, none of which had the capacity to process many taxpayers. There is one VITA site in Moorhead, and two in Fargo where VITA returns are done mostly by staff of agencies who have other duties, with the aid of some volunteers. Ken Fredette, EITC Coalition Coordinator at Lakes & Prairies estimated a 20-25 percent failure to file for the EITC among those eligible for it, which includes a large immigrant population and a significant Spanish-speaking migrant population.

Instead, they set an aim of increasing awareness of the EITC among the EITC-eligible population. They took upon themselves the responsibility of coordinating marketing and outreach activities to increase awareness among nonprofit service organizations. Prior to this, there had been absolutely no EITC outreach.

The Coalition’s first EITC awareness project was a regional Kick-off Event held January 9, 2006 at the Heritage Hjemkomst Interpretive Center in Moorhead with Moorhead Mayor Voxland, local and state elected representatives, Congressional staffers and individuals representing many businesses, non-profits and government entities, bringing total attendance to 110. John Molinaro from the West Central Initiative delivered a powerful speech in which he outlined 8 reasons why people should care that the region was losing out on $15–$17 million in unclaimed EITC.

Moorhead Mayor Voxland at Kickoff

Also speaking at the Kickoff were two EITC recipients. Sandra Ly who found out about the VITA site through their child's Head Start program, and Kris Burns, a North Dakota Job Service worker. While a Coalition member was leading a workshop at which Kriss was working, Kriss realized that she could be eligible for the EITC, though her CPA had not mentioned it to her. Subsequently, she was able to claim four years of EITC.

EITC Spokesperson Kriss Burns

Next, an EITC awareness event was held at West Acres Mall on January 27 featuring a live radio show. During the five-hours, 57 people requested more information on the EITC. To determine whether they were eligible for the EITC, they used the IRS’s online EITC estimator.

Concurrently during January, a media campaign consisting of television, radio, and print advertisements and the creation of an EITC web site was underway. This media campaign was seen and heard through-out most of the northwestern Minnesota and much of eastern North Dakota.

Other outreach activities included:

• A 10,000-postcard mailing completed.
• 75 media kits sent out to the nine-county Economic Development Region V in Minnesota and select counties in North Dakota.
• Every county in North Dakota received promotional DVDs through North Dakota State University Extension Services.
• A website of EITC information, gathered from various sources.

While an EITC infrastructure had to be built from scratch, Ken says that it is the nature of rural institutions to work and share together, and they recruited the right partners. One member of the Coalition, Dr. Deb Pankow, Family Economics Specialist, North Dakota State University Extension Service, not only provided DVDs about the EITC, she conducted interactive video training on the same day as the Kick-off Event.

Other outreach materials were put on the web site and radio commercials were downloadable for anyone wishing to use them, with County Extension Staff across the state having full access. On the other side of the river, the University of Minnesota Extension Service has its own rural network. The Minnesota Extension Service also was a statewide link for the “To Your Benefit” program that was provided in 14 centers throughout the State on how to link tax filers with other services they may be eligible for and is a partner on other EITC initiatives coming out of the state. Sara Croymans, Regional Extension Educator, was the Coalition member who helped bring together some of the various Minnesota efforts. The four Community Action Agencies on the Coalition touch at least 16 counties in the two states, providing direct services to low-income individuals in those counties.

The impact of all this work is evident before the formal evaluation has taken place. Ken frequently saw people qualified for the maximum EITC credit who had no clue about EITC and who hadn’t filed a tax return in previous years. He says there are so many intricacies to EITC that people need opportunities and space to comfortably ask a question. At the mall event, an older man who works 3–4 months/year and who had disability income thought he was not eligible because in his mind, he earns $14,000 . However, disability pay is not earned income and so he was eligible. Ken wants to widen the number of agencies or opportunities for people to walk in and ask the questions.

Even though the Campaign did not aim to increase clients at the few VITA sites, it had that effect. For example, Lakes & Prairies had 83 clients last year but 294 this year. Federal refunds jumped from $152, 000 last year to $419,000 this year. Southeastern North Dakota Community Action Agency, Cultural Diversity Resource Center, and West Central MN Communities Action also saw growth at their sites when compared with 2004. Another Coalition partner, West Central Minnesota Communities Action, Inc’s preliminary figures show total refunds up by 55 percent.

At the same time, most Coalition agencies are driven by the concept of asset development. In addition to tax returns, some Minnesota individuals and families were brought into their FAIM ( Minnesota version of IDA) program. Eligible VITA filers were linked to other services they qualified for such as Minnesota Care, Minnesota Health Care, Medical Assistance, Free and Reduced Lunch Programs, Energy Assistance and Child Care Assistance. This also furthered the opportunities for expanding the value of EITC refund and other earned income to assist people in their effort to move toward self-sufficiency.

Already, the Coalition is looking ahead to next year. After their late start for this tax filing season, they want to start inviting politicians to the January Kickoff in September rather than December. Ken said, “We were so impressed with the quality of the EITC Advocacy information and templates for writing US congressional leaders that was available on the National Community Tax Coalition website. These types of resources are valuable and we will take more advantage of them during the next tax season." They want to establish stronger connections between economic development and the EITC through better networking with local businesses and economic development agencies. They hope to work with religious organizations, feeding outreach resources into these networks.

To scale up their impact, they are considering using software to enable people to check on their EITC eligibility. They know that they will never have the capacity to provide free tax preparation to all EITC-eligible taxpayers, but they want to be a positive influence over taxpayers who use paid preparers, educating them to ask about the EITC, to get the best deal, and to avoid predatory practices such as the Refund Anticipation Loan (RAL).

Ken believes they can expand capacity by partnering at the regional, state, and national level. Having discovered that Tax-Aide, Community Action and the Minnesota Office of Economic Opportunity were also working on expanding EITC and Child Tax Credit awareness, they intend to collaborate with them. Rather than re-inventing strategies, they can copy what the other does best.

Ken said that in Minnesota, both the websites HelpMNSave and Child Care Financial Aid provided excellent information for both tax filers and direct service providers. The Help MN Save site provided an array of information on taxes, Refund Anticipation Loans, financial literacy, IDA programs, working with financial institutions, and building good credit. The Child Care site has a “Benefits Estimator” for EITC and other services (both federal and state) that Minnesotans might qualify for.

To sum up the success of their first year, Ken says, “People didn’t use RALs, they got their EITC, and they found other benefits programs to extend their asset development. We are also looking forward to the lessons learned from the Baltimore CASH Campaign and what they did to impact EITC Awareness and outreach to Child Care providers. Lakes & Prairies’ Child Care Resource & Referral program serves 22 counties in Minnesota and 24 counties in North Dakota. This is an example of how we hope to build and partner with others. “

Story by Don Wedd