Heart of Texas Financial Literacy Coalition, Waco , Texas
August, 2005
When Maggie McCarthy picked up the phone at the Bernard and Audre Rapoport Foundation office in Waco , Texas , and heard the caller announce he was from the IRS, she immediately thought, “Audit!” To her surprise, the caller asked whether she knew there was $10 million in unclaimed EITC in her area. “Ten million!” she thought. Maggie knew what $10 million could do for the low-income working families that the Foundation tried to help.
That was three years ago. Today, the Heart of Texas Financial Literacy Coalition (HOTFLIC) consists of more than 50 organizations: social service agencies, the City of Waco, workforce centers, banks, churches and schools. As an indication of their effectiveness, they have just been awarded a $200,000 grant.
In its first year, HOTFLIC started slowly, completing just 240 tax returns, and bringing in over $400,000 in refunds to Waco area low-income clients. tThe publicity created by the Coalition, however, had a magnifying effect. The IRS noted an increase in the number of tax returns in the county by 5% and refunds by 10%; and attributed a $3 million increase in EITC dollars brought into McLennan County in large part to the Coalition’s outreach.
In their second year, HOTFLIC put more energy into community outreach, creating a Spanish-language Public Service Announcement (PSA) and another PSA featuring their local Congressman. One of their volunteers used his technical skills to edit a video about the Coalition and the EITC, which the IRS shows at its trainings. With the help of students, they even created an anti-RAL rap song which they filmed in front of a mock-up “refund shop”.
In their third year, the emphasis shifted to business and employers. The Incoming Chair of the Waco Chamber of Commerce (the CEO of a hospital) asked his Human Resources department how many employees earned less than $34,000, the eligibility threshold for the EITC. When they discovered it was almost 1,000 (though not all would qualify) workers, the hospital set up workshops on home ownership assistance and the EITC, in which 150 employees took part. Publicity about these workshops benefited both the CEO and the Coalition. Subsequently, the U.S. Department of Health and Human Services provided a seed grant to the Coalition, and Maggie has been asked to lead workshops on the Coalition’s methods of promotion of EITC. Maggie is also putting together a workshop on the EITC for philanthropic foundations because of their power to bring people together and spread the word.
In 2005, they did 1,683 returns at seven sites and brought back almost $690,000 dollars, all with a negligible budget. The Coalition relies on volunteer and in-kind contributions. An affordable housing agency funded by the Rapoport Foundation provided space for the program, and 77 volunteers participated during the 2005 tax season. In the past, financial institutions provided funding to underwrite over 100,000 newspaper inserts which informed the public about the coalition, VITA site and financial education classes. This year, the FDIC hosted a “bankers’ breakfast” to encourage local banks to participate. Other partners have promoted the services rendered through the program through television commercials and utility bill inserts.
The Coalition is connected with the AARP, so they do returns for many seniors. Aiming at other people likely to be eligible for EITC, the Coalition has used a church and a non-profit that serves low-income people as tax preparation sites. One high school served as a VITA site, with students and teachers trained as tax preparers. The high school students, with their teachers, went through the IRS tax training and were able to prepare 375 returns.
In January of this year, HOTFLIC received a grant of $200,000 from the Texas Workforce Commission to help expand its efforts – both locally and across the state. Among other things, the money will allow the coalition to hire its first paid employees and to stay operational year-round, instead of just at tax time.
Much of the grant will be used to fund four part-time positions. This includes a coordinator for the coalition, a business outreach coordinator, a volunteer coordinator and a technical assistant/troubleshooter.
Similar coalitions are springing up in cities across the country, and Waco is being recognized as a model of coalition-building . Some of the funds will be used to help budding coalitions in other parts of the state. Specifically, the local coalition will work extensively with the North Central Texas and Central Texas Workforce Development boards.
The grant contract also mandates that the coalition give technical assistance to workforce boards in several other parts of the state. A lot of that will involve making the coalition's materials available to other groups, such as through an online, downloadable "toolkit."
Even with those far-flung obligations, however, Maggie believes that the grant will be a boon locally. For example, having a business coordinator will aid the coalition's plan to get more companies involved in Earned Income Tax Credit outreach efforts, she said.
The coalition is also focused on providing families with financial education and information about asset building, such as home ownership. They try to combine asset building with down payment assistance groups to help clients purchase a home. The home ownership rate in Waco is about 46 percent, compared to the national average of 64 percent. The City of Waco is committed to improving this rate, so is proving to be a good partner on this issue.
Even though HOTFLIC plans to stay with seven sites again next year, Maggie hopes that in 2006, “the program will really take off, with four part-time people getting the word out.” For Maggie, the beauty of the Coalition is not the financial support it can garner, but the sense of community it engenders. Having been midwife to the Coalition, she is grateful to the National Community Tax Coalition for its support and sharing of expertise.
Written by Don Wedd.
