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Are you living in a Newtown ALICE household?
If so, Newtown Social Services may have some free money for you.
ALICE, as identified by United Way agencies, is Asset Limited, Income Constrained, Employed — basically a paycheck to paycheck household that may be one major car repair, illness, or other family crisis away from financial trouble.
By technical definition, ALICE is a way of defining and understanding our families, neighbors, and colleagues (men and women) who work hard, earn above the federal poverty level, but not enough to afford a basic household budget of housing, child care, food, transportation, and health care.
The United Way ALICE Project is a collaborative effort to improve the lives of vulnerable, low-income ALICE households. Based on the overwhelming success of the research in identifying and communicating the needs of ALICE households, the project has grown from a pilot in Morris County, N.J., in 2007, to the entire state of New Jersey in 2012, and to the national level in 2014 with reports in six states representing one-quarter of the US population.
The partners in this grassroots effort are working together to give ALICE a national voice. By sharing common language and understanding, stakeholders are better equipped to tackle crucial issues for ALICE and the wider community.
United Way impacts the lives of ALICE in Western Connecticut by funding programs and collaboratives that target specific issue areas that most affect ALICE households, particularly in the areas of education, income, and health.
Almost four out of every ten Connecticut households are ALICE, and do not earn enough to get by on a localized household survival budget that uses conservative estimates of the basic expenses: housing, child care, food, transportation, health care, and taxes. According to the 2016 United Way ALICE report, 17 percent of 9,624 households in Newtown are ALICE households.
As ALICE partners continue to explore how to better serve its households, supporting nominal savings accounts has risen to the top of the priority scale.
As a result, beginning March 27, Connecticut United Ways began partnering with a San Francisco-based nonprofit organization called EARN to bring a matched savings program to ALICE households. Thirty-nine percent of Connecticut households lack the liquid assets necessary to survive a financial shock. This vulnerability means that a medical emergency or unexpected car repair has the potential to cripple an ALICE household.
Savings is a core component of financial health, according to United Way. A savings habit — and the stability it brings — is as important as income.
Savings address financial instability by providing a way for families to save for short-term emergencies and long-term assets, like a college education or a home.
“Connecticut United Ways invested more than $1.5 million in financial stability work that helps families in various ways, including free tax preparation, managing their household budgets, building assets, and repairing credit,” said Richard Porth, president and CEO of United Way of Connecticut. “This new partnership with EARN will help us further deliver on our commitment to support ALICE households.”
This asset-building initiative will complement the great financial stability work that all United Ways across the State of Connecticut support in their local communities.
“We spent months researching programs and initiatives nationwide to identify the best asset-building program with the most flexibility for ALICE households,” said Kim Morgan, CEO of United Way of Western Connecticut, which serves Newtown. “We were thrilled to find EARN and to bring its successful Starter Savings Program to Connecticut. We see this partnership growing and evolving over time.”
A Way To EARN
The EARN Starter Savings Program is a six-month matched savings program in which individuals earning no more than 80 percent of the median household income in their region agree to save at least $20 per month and in return earn $10 in matched savings. At the end of program, they will have built up at least $180 worth of emergency savings.
“Under the program this is basically free money,” Ms Morgan said during a pre-launch press conference March 24.
EARN reports that 80 percent of graduates from the Starter Savings Program continue to save beyond the six months of the program. In Connecticut, participants tend to save significantly more than the $20 per deposit minimum for the EARN matching funds.
Built on a simple online platform, the six-month EARN Starter Savings Program kickstarts a habit of saving through an easy-to-use tool, backed by monetary incentives.
Savers enroll in the program online or via their mobile phone, link their own savings account to EARN’s platform, set a personal savings goal, make deposits, and earn rewards. EARN’s online platform links to accounts at 15 financial institutions: including Ally Financial, BB&T, Bank of America, BBVA, Capital One 360, Chase, Citibank, Navy Federal CU, PNC, Simple, Suntrust Bank, TD Bank, US Bank, USAA, and Wells Fargo.
The program focuses on quick wins to build the confidence needed to learn critical savings behavior, and organizers have found that overwhelmingly the six-month duration and $20 minimum balance are achievable for qualifying participant savers.
In addition to the EARN partnership, Newtown Social Services recently won an $8,000 grant for qualified Newtown ALICE families to help cover the cost of after school enrichment programs for children that they might not otherwise be able to afford. Social Services Director Ann LoBosco said that she expects to begin taking applications for this additional grant program by the middle of April.
“This is exclusively for families who qualify under the ALICE guidelines,” Ms LoBosco said. These households are generally excluded from other fully or partially subsidized programs because of a working adult head of household, or because combined family earnings bump families out of the income range to qualify for other services, she added.
“This grant is for social, emotional, or cultural enrichment, so most sports and camp programs do not qualify,” Ms LoBosco said. “We do have other avenues to help families pay for summer camp and local Parks & Rec sports programs.”
Ms LoBosco hopes with some success, her department will be able to qualify for future rounds of grants under this youth enrichment subsidy program.
For EARN Starter Savings Program details, visit earn.org/ctuw. To learn more about the local youth enrichment grant, contact Newtown Social Services at 203-270-4330.