ISED Ventures gives impoverished a ‘hand up’
Hundreds of refugees have achieved homeownership and acquired other assets under a federal program administered locally by the Institute for Social and Economic Development. Debra Carr, the director of economic development for the ISED Ventures program, likes to say the organization gives some of Iowa’s most economically vulnerable residents, the working poor, a “hand up” instead of a “handout.”
Nearly 920 refugees saved for their big purchases through Iowans Save for Refugees, an ISED Ventures program that helps them establish savings accounts, called Individual Development Accounts, at Bankers Trust Co. or U.S. Bank, ISED’s partners. For every $1 the refugees save, the U.S. Department of Health and Human Services’s Office to Refugee Resettlement provides a $2 match, up to $3,000 per person and $6,000 per family.
Since 1999, the “hand up” Carr talks about has helped the refugees, primarily from Bosnia and the African nations of Sudan, Liberia and Nigeria, pay for 605 cars, 202 houses, 35 computers and 23 home renovations. Three dozen program participants got help with college education and 15 started microenterprise businesses. In the five years, Iowa ranked fifth nationally in the number of refugees served.
There are a couple of reasons, Carr said. For one thing, not every state had a local partner like the ISED to administer the program. Another reason was the refugees themselves.
“Refugees are very anxious to get back to the status they were at before they became a refugee, and they’re very focused on how they can achieve their goal of getting established in this country,” she said. “Most of these people have been at or below 200 percent of federal poverty guidelines, so they’re extremely and incredibly motivated to work.”
Federal funding for Iowans Save for Refugees is not expected to be renewed due to a decreasing number of refugees allowed asylum in the United States and other funding priorities associated with homeland security needs. But refugees can still assistance under Iowans Save, a similar program that matches participants’ savings dollar for dollar, up to $2,000 per person and $4,000 per family. Local match money is provided by the federal government and the Iowa Finance Authority. The match money goes into the account after the individual has met his or her savings commitment and a check is written directly to the vendor, such as a mortgage holder, college or auto dealership.
In the same five-year period from 1999-2004, Iowans Save helped 267 participants, 52 of them with microenterprise businesses, 71 with tuition for college or training programs and 44 with house purchases.
Carr attributes the higher participation rate in the refugee program to the fact that refugees often don’t have “some of the credit challenges of non-refugees.” Both programs require participation in financial literacy education, which includes an asset-specific training program. “It gives them an opportunity to not only gain an asset, but manage and maintain one,” she said.
For example, an individual saving for a business would learn how to put together a business plan and other aspects of management. A person saving for a home would learn about the responsibilities of homeownership. Refugees and immigrants, regardless of what asset they’re saving for, enroll in a financial literacy program tailored to fit their specific needs.
“When you start thinking about how complex the U.S. financial system is, it is not easy for them,” Carr said. “It’s very different from what some of these people were used to.”
Winners in the program are the individuals who are moving from poverty toward self-sufficiency and the communities they live in, according to Carr. Homeownership is seen as helping to stabilize the workforce, and accomplishing a personal savings goal improves self-esteem, improves credit and enhances the lives of children, who live in a more stable environment, she said.
With the program specifically for refugees ending, the ISED is looking for more local match partners, said Marybeth Foster, the organization’s director of marketing and development. With more money committed upfront, the ISED will be able to enroll more people in its programs, she said.
Assistance in establishing IDAs is among myriad services provided by the ISED. Founded in 1987 by John F. Else and modeled after programs he helped develop in Zimbabwe and other Third World countries, the agency has been recognized nationally and locally for its work to ease poverty through microenterprise development. It received the Presidential Award for Microenterprise Development in 1998, and in 2003, the Annie E. Casey Foundation recognized it in the “Families Count” national honors program.