Release date: 2/13/2017
NeighborWorks America and EARN launch new technology and personal coaching partnership to encourage emergency savings and the development of lifelong savings habits
Flexibility for use of funds sets this effort apart from traditional savings programs
Washington, DC and San Francisco, CA — NeighborWorks America, one of the nation's leading community development nonprofits working to improve the financial capability of low- and moderate-income consumers, and EARN, a leading pioneer in the emerging nonprofit financial technology sector, today announced a nationwide partnership to boost emergency savings for low-income families across the United States.
The organizations are working together to pilot a savings program that helps consumers plan for a financial emergency by combining one-on-one financial coaching and two-for-one matched dollar savings incentives administered through EARN's award-winning online savings platform. National consumer research from NeighborWorks America and data from the Board of Governors of the Federal Reserve System show that millions of households don't have the emergency savings to cover a financial shock of $400.
The EARN and NeighborWorks initiative will help participants build a $450 cushion, based on individuals saving up to $150 of their own money to be matched by up to $300 from NeighborWorks America. Seventeen selected members of the NeighborWorks network will coach their clients to enroll in the savings program and link their savings accounts to EARN's online platform. EARN will track their progress, send regular motivational e-mails to participants, and report to NeighborWorks organization coaches, who will provide on-going support to help savers reach their goals.
The matched funds are provided by a grant from JP Morgan Chase to NeighborWorks America, as part of its long-standing commitment to the development of products and services that increase the financial well-being of consumers. JP Morgan Chase is a long-time supporter of various NeighborWorks America programs and has been a supporter of EARN since 2013.
The goal of the program is to help consumers establish a habit of savings and create an emergency fund that can be used for any purpose. While most matched savings programs limit the use of funds to the pursuit of longer-term goals such as homeownership, launching a business, or pursuing education, this initiative enables participants to use the funds saved and the dollars matched for any purpose, helping savers weather the many kinds of financial disruptions that impact low- and moderate-income families.
"This is an exciting partnership for NeighborWorks America," said Paul Weech, president and CEO of NeighborWorks America. "The ability to withstand a sudden financial shock can mean the difference between falling into the trap of high-cost or predatory lending and building a strong financial future for yourself and your family. This initiative will help NeighborWorks America and EARN evaluate how the combination of technological ease and financial coaching work to protect and promote savings habits."
"EARN is working to solve America's savings crisis by helping families build both a habit of savings and enough financial resilience to withstand an unexpected emergency," said EARN's CEO Leigh Phillips. "Our partnership with NeighborWorks America takes our work to the next level — they understand the need for flexibility and are willing to provide significant financial resources and support directly to families."
"Technology alone can't solve financial insecurity. Those who struggle financially need information paired with tools they can immediately put into action and I'm thrilled to see that come to life with this new initiative," said Colleen Briggs, Director of Community Innovation, Global Philanthropy, JPMorgan Chase & Co. "This partnership will encourage saving that ultimately improves household resiliency and long-term opportunity."
There are 17 NeighborWorks network organizations participating in the initiative, with the goal to sign-up 300-350 consumers. The program is designed to reach renters who live in NeighborWorks network owned and managed apartment communities. The matched savings program is just one offering among many social and educational benefits delivered by NeighborWorks organizations to their tenants as part of each organization's resident services programs.
NeighborWorks Network financial coaches will receive extra help with their coaching skills during this pilot initiative. Following class-based training at NeighborWorks Training Institutes, coaches will be mentored by a master coach and share successful techniques and challenges with their peers. With successful coaching, participants are much more likely to stay engaged and reach their savings goals.
About NeighborWorks America
For more than 35 years, NeighborWorks America, a national, nonpartisan nonprofit, has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $27.2 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.
Founded in 2001, EARN creates prosperity for working families by helping them save and invest in their futures. EARN is a leader in the emerging nonprofit financial technology sector. In 2015, EARN launched America’s first online flexible savings program, becoming a pioneer in the growing field of nonprofit fintech. In 2016, EARN was identified by the Financial Solutions Lab as one of the most promising innovations to help Americans increase savings and manage financial shocks.