“I don’t have the bandwidth to talk about identity theft.” – Re-entry case manager
“Front-line staff won’t take on a formerly incarcerated person’s debt; that’s outside their job description.” – program manager
“Job developers can’t be expected to have the skills to take on jobseekers’ banking relationships.” – executive director
We often hear service providers suggest that people in crisis can’t afford to focus on their personal finances—that building financial security only makes sense after a person’s basic survival needs have been met. Many community-based organizations also say that financial empowerment is beyond the scope of what they can or should do.
These assumptions are not only outdated, they’re counterproductive.
Nearly 25 years ago, Dr. Michael Sherraden proved wrong those who doubted that poor people could save. His book Assets and the Poor, in which he called for Individual Development Accounts (IDAs)—matched savings accounts that would help low-income families build assets—went on to become a seminal body of work. It gave birth to a field and a new way of thinking about how to fight poverty. It also reminded us that a strengths-based approach to human and social services—one focusing on future outcomes and an individual’s self-determination and strengths—is not only empowering, it also produces results.
The Financial Clinic’s “New Ground Initiative” builds on Dr. Sherraden’s work by taking a broader look at how we think about financial empowerment. For many people struggling on the brink, financial security is about much more than home ownership or retirement planning; it requires tackling complicated challenges not often viewed as “financial”—such as barriers to rejoining one’s community after incarceration.
The New Ground Initiative seeks to increase the capacity of re‐entry programs—which serve individuals returning to their communities after incarceration—to address barriers to financial security. Formerly incarcerated individuals face many significant obstacles to economic security—such as barriers to employment, housing, public assistance, and education and training. Many of these barriers are the result of “collateral consequences”—penalties embedded in public policy that prevent people with criminal records from accessing basics such as a job, an apartment, or vital public assistance programs such as food stamps.
The New Ground Initiative trains re-entry service providers on how to tackle these and other financial obstacles. These efforts have created powerful and inspiring achievements in the areas of employment, housing, and education.
For example, after returning home from incarceration, John (name changed) was worried about starting work and opening a bank account; he was afraid that his child support arrears would cause his new wages to be garnished. He is far from alone—unaffordable child support obligations are a major driver of post-incarceration debt. In fact, many formerly incarcerated individuals are released only to find that their child support debts have accumulated into the tens of thousands of dollars while they were behind bars. However, because of the training he did with New Ground, a job developer was able to help John modify his child support order to an affordable amount and then helped him open a bank account. The job developer also helped John set up direct deposit on his first day of work.
New Ground has also enabled re-entry programs to help their clients’ access housing opportunities. For example, Sarah was having trouble securing an apartment after returning home from incarceration. She had her credit report pulled by a re-entry service provider and they found that she was a victim of identity theft. The program referred Sarah to a financial coach, who was able to support her in getting the fraudulent debt removed, which in turn enabled her to rent an apartment.
Another re-entry program—focused on helping people achieve their educational goals after exiting jail or prison—reported that training with New Ground was fundamental to the program’s ability to help participants negotiate old student loan debt. Lowering monthly student loan payments allowed these individuals to make ends meet and return to school.
These successes confirm the Clinic’s model that strategies to build financial security in turn reduce barriers to basic needs. They also demonstrate that projects like the New Ground Initiative can help programs that serve justice-involved individuals achieve even better results.
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