MCF Announces $15 Million, 5-Year Effort to Break the Cycle of Poverty

July 28, 2009

contact: Fred Silverman (415.464.2527 or via email)

Hundreds of low-income families in Marin County will save money for education, housing, and starting new businesses under a Marin Community Foundation (MCF) initiative to help them become more financially stable.

"We want to help break the cycle of poverty in Marin," said Thomas Peters, the Foundation's president, in announcing the plan. "Through this new initiative, we'll fund efforts to help people learn new job skills, understand personal finances, benefit from financial services that meet their needs, receive support to start their own business, and avoid economic crises."

As one of the central approaches in the initiative, MCF is partnering with EARN (Earned Assets Resource Network), a nationally recognized California nonprofit, to help families establish savings accounts, called Individual Development Accounts. The families' personal contributions are matched with Foundation dollars, support from individual donors, and contributions from designated federal funds.

Already, according to Ben Mangan, president and CEO of EARN, the first families with new savings accounts are contributing higher than expected amounts each month. EARN expects to enroll 500 Marin households in this effort over the next five years.

The program, which also offers training on such topics as budgeting and credit, requires that savings be used for educational purposes, purchasing a home, or starting a business. "These are the kinds of efforts that help families become more stable and economically secure for the long term," said Peters.

The initiative will also help people learn skills required for better-paying jobs. These include interview and job search skills, computer training, and helping foreign-trained professionals obtain credentials to obtain employment in the U.S.

To help low-income families have access to financial services specially tailored to meet their needs, the Foundation will work with community banks to develop low-cost products and services. These include no-fee check-cashing services, investment services, microenterprise loans, and counseling about home ownership.

"These programs, combined with basic financial education, will help these families have the same fiscal tools and knowledge that most people take for granted," said Peters.

Another component of the initiative will help low-income women in Marin start small businesses. The Foundation is partnering with Women's Initiative, a nonprofit organization specializing in entrepreneurship. Participants will learn about business plans, pricing, and marketing.

"Today, more than ever, microenterprise is generating the majority of new jobs in our country," stated Julie Castro Abrams, CEO at the organization. "Investing in training and financing new entrepreneurs is perhaps the most impactful and relevant thing that we can do to build the economic health of our community."

Finally, the initiative will provide funding to several Marin nonprofits to help families meet emergency needs as they work toward long-term self-sufficiency. For example, families in crisis will receive assistance with rent and car repairs, as well as help accessing public benefits for which they are eligible, such as food stamps and tax credits.

This initiative is expect to affect approximately 2,000 families in Marin.

"The high cost of living in Marin makes it especially difficult for the working poor to move out of poverty," stated Peters. "A parent with two children needs an annual income of $68,000 to be regarded as fully self-sufficient. But since that would require the earnings equivalent of working four minimum-wage jobs, many Marin families can't reach that goal."

According to the Marin County Department of Health and Human Services, there are nearly 23,000 families in Marin who have trouble covering such basic needs as housing, food, and health care.

"We hope over the next few years, the programs and services of this initiative will help local residents receive support and gain skills that can last a lifetime," said Peters. "Not only will they benefit now, during a dramatic period of economic stress, but they can remain more secure during the future downturns that are sure to come. We want to help provide the building blocks of economic security and growth, so people have a more positive and productive future."

This initiative is one of four the Foundation is implementing under its new Strategic Plan. The other three focus on reducing the impact of climate change, closing the educational achievement gap for low-income and disenfranchised students, and developing more affordable housing for low-income families.