Building Financial Security of Domestic Violence Survivors

The Financial Clinic’s capacity building team is dedicated to a long-standing partnership with New York City domestic violence providers.

2017 Tax Season Success Stories

Inspiring stories of people who have achieved financial success through the Clinic’s tax preparation program. And taking a closer look at how they did it!

Introducing the Financial Security Ecosystem

A Holistic Model for Scale and Impact

“Ecosystems are dynamic and co-evolving communities of diverse actors who create new value through increasingly productive and sophisticated models of both collaboration and competition.”

Eamonn Kelly. Business Ecosystems Come of Age, April 2015. Deloitte University Press.

A Fully Developed Financial Security Ecosystem

After creating and evaluating three very different service-delivery models over the last 10 years, the Clinic has honed in on a “best practice”model that we are calling a “financial security ecosystem (ecosystem).”Through a decade of building financial security, the Clinic has found that everyone experiences some level of financial insecurity, but different resources are appropriate for different issues and outcomes. With this in mind, the Clinic designed the ecosystem around the mantra, “everyone experiences financial insecurity …but not everyone needs a financial coach.”

This driving mantra manifests itself in the Clinic’s new ecosystem: the bundling together of the Clinic’s best practices and services in collaboration with a partner organization to maximize its ability to build financial security for the working poor and the partner’s ability to achieve its mission.

“Diverse Actors”Innovate

Alongside our new social service partners, we will create a dynamic community that achieves both scale and impact. Our collective strengths, like diversity of perspective and shared passion for mission, are the foundation for our new ability to learn collaboratively, ensuring sustained success.

“Sophisticated Model of Collaboration”Builds Scale

First we will “bake in”financial security strategies into our partners’programming to build financial security at scale. For example, thousands of job developers, domestic violence advocates, re-entry specialists, and career coaches have already opened bank accounts or prioritized debt for their customers, as these are roadblocks that risked the practitioners’ability to achieve mission. By building capacity and innovating systemic solutions, the Clinic and its partners are able to build financial security at scale.

Impact and “Increasing Productivity”

Because thousands of practitioners are building financial security, hundreds of thousands of working poor people are simultaneously screened for issues that are better addressed by a financial coach or personal finance attorney. In an ecosystem, the practitioner addresses the issues best correlated to their mission, and those that require additional financial or legal expertise receive heightened scrutiny by a financial coach or personal finance attorney.

This improves the efficiency of all employees and therefore the organization. Financial coaching has demonstrated impact on the debt, credit and savings levels of working poor Americans, those earning on average $23,000 a year, or just above the poverty level for a family of three.

Providing Financial Security-Building Services

This impact, in turn, deepens the value of the partners’mission. For example, in a partnership with the New York City Department of Small Business Services, the Clinic trained career coaches to provide financial security-building services as part of their workforce development with customers. The study found that customers achieved significantly higher retention and advancement outcomes–27 percent additional income earned and 67 percent additional hours worked–when they also achieved financial security milestones with their career coach.

Whether it’s a practitioner’s increased productivity, or a “faster, better, cheaper”model for ending violence or recidivism, the financial security ecosystem builds financial security at scale, and accelerated outcomes for its partners.

Funding a Financial Security Ecosystem

To learn more, read about the investment from JPMorgan Chase &Co. to fund a financial security ecosystem in New York City, which is part of a $1 million multi-faceted project that will build financial security for working poor Americans nationwide.

Metrics of the Trade

The art and science of quantifying how The Financial Clinic measures its mission has been a prominent feature of our history. From our inception 10 years ago, when it was critical that we cut through a lot of rhetoric about what it meant to build financial security for our customers, we developed six discrete and measurable outcomes that together, defined our mission.

The advantages were that our six outcomes were organically developed from our own successes and failures, and with minor exceptions, they’ve largely withstood the test of time. Quantifying success served to enlist new stakeholders as well. The drawbacks to the Clinic’s outcomes framework is that after 10 years, we’re feeling that one of the best indicators of success —savings, because it gauges our customers’future orientation —gets lost in the mix. Another example is credit scores, and how hard it is to attach your mission to what is, basically, a Coca-Cola formula.

It was relatively easy to put aside the inputs and outputs of financial education: the Clinic is much more concerned with being measured by what our customers accomplished with the information. Likewise, we originally rejected purely qualitative measures like customers’ self-reported feelings or attitudes around money. While these were prevalent measures at the time, they can be manipulated by a favorite coach and can’t be standardized. The Clinic also developed a monetary quantification of our mission that we call the cash value of our work, which is helpful in an ROI analysis, but it isn’t a full picture of how we improve our customers’ financial mobility.

Recently I was able to share some of this history with hundreds of practitioners and funders when the Asset Funders Network (AFN) —a membership organization of grantmakers focused on promoting economic opportunity —graciously invited the Clinic to be on a panel to discuss a new metric: The Financial Capability Scale (FCS).

Developed by J. Michael Collins from the Center for Financial Security at the University of Wisconsin with the leadership and support of the Annie E. Casey Foundation, the FCS seeks to standardize how we gauge the success of the maturing field of financial coaching.

In 2013, the Clinic enthusiastically and readily jumped right into a pilot to test the FCS. In pursuit of the right measurement for our mission, we’ve been involved in other studies, including NeighborWorks’ Success Measures and CFED/CFPB’s Consumer Financial Well Being Metrics Project. In the end, despite avoiding self-reported qualitative outcomes early on, the FCS demonstrated to us that it strikes the right balance of how the Clinic defines success because it has elements of our outcomes framework combined with self-reported financial well being and other qualitative information.

For a description of how the Clinic operationalized the FCS and standardized it in Change Machine —our financial coaching platform–you are invited to check out AFN’s webinar recording.

The Clinic’s primary conclusion from the pilot was that the FCS is complementary to our mission. First we examined the follow up surveys (6 and 12 months after the original survey), which revealed a 1.4 point average increase after working on customers’ financial security for at least 6 months. Next we observed that the scale confirmed much of what we knew anecdotally to be true of our customers:

  • Greater financial insecurity manifested itself in a low score in almost every area of the scale;
  • Women are more adept at budgeting and savings, but their lower income also meant a lower score;and
  • Average scores increase across demographic areas such as ethnicity, race and education level confirming the Clinic’s belief that our mission is broadly applicable to people in crisis.

metrics

Most critical for the Clinic was documenting a correlation between FCS score changes and outcomes achievement:

  • As the chart shows, changes in the score were positively correlated with the Clinic’s six financial security outcomes, illustrating that as our customers improve their credit scores and lower their debt, it will be reflected in the follow-up FCS survey;and
  • On average, customers improved in all the areas reflected by the question, indicating that the FCS is capturing the breadth of financial security and the coaching process.

These observations have allowed us to conclude that the FCS rounds out the Clinic’s own quantifiable financial metrics, but not in a way that relies solely on qualitative assessments. As with all the measurement projects the Clinic has participated in over the years, we are pleased to be contributing to the discussion about what works.

Just as the Clinic was driven to develop our own outcomes framework a decade ago, I believe it’s important for our growing field to coalesce around common outcomes: united voice holds tremendous promise for conveying to the rest of the world how powerful and impactful this work can be for the communities we serve.

Type of Clinic MetricExampleWhere to Find More Info
Financial Security Action and StrategiesImportance of Emergency SavingsChange Machine
Financial Security OutcomesA Customer Who Makes Three Successive Deposits Into a Savings AccountA History of the Clinic Through How It Defines Its Mission
Faster, Better, Cheaper OutcomesWorkforce Development Customers Who Worked with Career Coaches to Download and Work on Credit Scores Secured 12 Additional Hours of Work Per WeekScaling Financial Development
Cash ValueSavings Increases Trigger Cash Value, So Going from $100 to $200 in an Account, For Example, Results in a Cash Value of $100Cash Value Report

The 10th Anniversary of My Final Rejection

Remarks by Mae Watson Grote, founder and Executive Director of The Financial Clinic at the 10th Anniversary Celebration Honoring Bill Eggers, author of The Social Revolution

Clinic Founder and Executive Director Mae Watson Grote with Board Members.

Clinic Founder and Executive Director Mae Watson Grote with Board Members.

Many thanks to the Clinic’s Board of Directors for their leadership, bringing this organization into its second decade, and thanks to everyone attending tonight for joining us to celebrate this momentous occasion…

…which I know many of you think is a celebration of the Clinic’s 10-year anniversary, but in fact, exactly 10 years ago—May 2005—I received my very last rejection for a fellowship to launch the Clinic.

I had this idea that working poor people’s financial security was worthy of support. This was radical if you consider it was my fourth or fifth rejection. Or, it was a premonition if you consider that there are now thousands of financial coaches across the county, an entire sector of nonprofits focusing on financial capability, and a new federal agency—the Consumer Finance Protection Bureau—with an entire team and agenda devoted to our emerging sector.

While I’ll take the lion share of the credit for that initial idea, the more remarkable thing is what the Clinic’s incredible team has accomplished in just 10 years. As Margarita [Brose, the Clinic’s Chair] noted, we’ve put $30 million in the pockets of 15,000 working poor people. We are most definitively accomplishing our mission.

I have the privilege of working with colleagues and directors who have also made our vision—systemically building the financial security of the 20 percent of Americans who struggle to make ends meet—a reality.

I’d like to illustrate how this dedicated and driven team is taking concrete steps to vision with three brief examples.

But before I do so, let me note that one of the reasons I’m most proud of this team is our collective commitment to innovation. Instead of following any commonly accepted limitations to anti-poverty work, the Clinic’s team always looks beyond. “Scrappy start-up” might have captured that mindset for our first five years, but not as cute as we approach the mid-life cycle!

Celebrating 10 years of The Financial Clinic.

Celebrating 10 years of The Financial Clinic.

After absorbing Bill Eggers’s esteemed work, I think I found it: We’re Wavemakers! Our goal is to solve problems, rather than simply expand a successful program. I’m now convinced that to have progress on vision you must be a Wavemaker.

To wit:

One, the Clinic is a Wavemaker, evidenced by the fact that Urban Institute chose it for the Consumer Financial Protection Bureau’s inaugural rigorous evaluation of our field, so that our innovations and fresh approach to old issues will become the “gold standard” for how thousands of financial coaches will implement high-performing services.

Two, the Clinic’s team is comprised of Wavemakers because in seeking to disrupt old operating models for alleviating poverty, we’ve changed city policies to create systemic solutions: So that tens of thousands of New Yorkers achieve greater financial security, whether they walk through the Clinic’s doors or not.

Third, we are Wavemakers because we are erasing public-private sector boundaries by creating a social enterprise, Change Machine, which will not only scale our mission, but create faster, better, cheaper outcomes for our partners as well.

May I ask my colleagues and the directors to make themselves known by raising their hand, or maybe doing a happy dance, so that we may applaud you for making the Clinic’s vision a reality in only 10 short years.

And so it is a great honor to have Bill Eggers, the man who gave us a fantastic new description—Wavemakers!—that perfectly captures how the Clinic thinks about solving the problem of financial insecurity, here tonight to help us celebrate our accomplishments. It is my pleasure to confer the Clinic’s Directors Award to Bill for his expansive work to redefine the way the public and private sectors can solve society’s toughest problems, like financial insecurity. Thank you Bill!

Change Machine: Built for ‘Transformative Scale’

SSIR image

Stanford Social Innovation Review: Informing and Inspiring Leaders of Social Change

The last few weeks of 2014 abound in top trends: Best books, most Google hits, favorite movies.

I have a few “best of the year”observations, but a singular article stands heads and shoulders among all my reading for the year, “Transformative Scale: The Future of Growing What Works” by Jeffrey Bradach and Abe Grindle, published in the Stanford Social Innovation Review. Not only does it confirm the validity of the $900,000 investment The Financial Clinic has made to scale its mission and accomplishments, but affirms our investor’s expectations, like The Prudential Foundation’s recent $500,000 grant to promote financial security outcomes for neighborhoods across the country.

The subject of these investments is the Clinic’s Change Machine, cloud-based platform that enables nonprofit organizations and public agencies to incorporate powerful financial coaching strategies into their programs.

Bradach and Grindle put forth “nine strategies for transformative scale”that are so illustrative of what we’ve set out to accomplish with Change Machine that it’s worth reviewing each point, grouped into internal and external themes:

“Organizational pathways: Building on and expanding what individual organizations can do”
Change Machine combines the Clinic’s financial coaching blue print, outcomes framework, content guides, customer engagement tools, specialized content for at-risk populations, and active community forum under one roof and makes them accessible to programs working with individuals and families on their finances. All of these resources advance an organization’s capacity to embed financial development services into its program and consistently measure its performance, reaping enormous benefits from its investment.

1. “Distribute though existing platforms”: Bradach and Grindle observe that successfully scaled solutions “hitch a ride”to existing systems. The Clinic’s theory of change is premised on the hard reality that all the communities social service providers seek to support experience underlying financially insecurity. Whether its job seekers stymied by credit checks or formerly incarcerated individuals overwhelmed by debt, the Clinic has yet to encounter a system that can’t benefit from greater financial security.

2. “Recruit (and train) others to deliver the solution”: Since 2006, the Clinic has been training case managers and social workers on the front lines of anti-poverty efforts. After building the capacity of over 1,600 practitioners in 260 organizations across 19 states, we’ve honed a set of strategies and tools that enables practitioners across diverse sectors to build their own participants’financial security. This early success inspired us to cast Change Machine’s goal as reaching all 1.8 million practitioners
in the country to work to alleviate poverty.

3. “Unbundle and scale up the parts that have the greatest impact”: While the Clinic defines its mission as a combination of its six outcomes around assets, banking, credit, debt, taxes and financial goals, a critical turning point in our evolution was decoupling these activities to focus on the specific participants’barriers. Unlocking identity theft for domestic violence survivors or building credit histories for individuals seeking to own homes allows us to zero in on the most relevant and impactful aspects of financial security.

4. “Use technology to reach a large audience”: The Clinic didn’t need to spend untold hours printing ToolKits or spend outrageous sums on shipping to appreciate how powerful a cloud-based platform could be. Instead, we honed in on how technology facilitates access to new audiences. Scores of programs and practitioners have sought the Clinic’s training and technical assistance, but don’t have the same resources as many larger organizations and networks. Enabling technology can radically reduce costs, thus Change Machine allows us to better meet the market demand and unlock interest among vast new audiences.

“Field-building Pathways: Pushing the field and its constellation of actors towards a shared target”: Bradach and Grindle argue that to be truly transformative, strategies must also bring together disparate actors to advance the field in concert. This reflects the Clinic’s distinction between its mission and vision. While our day-to-day is all about building financial security one milestone and outcome at a time, our vision is to transform those on-the-ground lessons into large-scale, system-level solutions and social innovations that will have an impact on working poor people nationwide.

5. “Don’t just build organizations and programs, strengthen a field”: Throughout its history, the Clinic has consistently applied a systemic-change lens to its programs and services. It’s why we were eager to participate in the Consumer Finance Protection Bureau’s randomized control trial assessing the impact of financial education and coaching. The evidence base created though the study will be key to establishing new “best practice”standards to lead the field, build the case for additional resources and investments, and expanding financial security for working poor Americans. Change Machine is a dissemination tool well-positioned to take the lessons we are learning and share them with the field. For example, during the study we have learned more about customer outreach and retention, and those observations were immediately translated into practitioner tools now featured in Change Machine.

6. “Change public systems”: Systemic change can also be reflected in new strategies for public systems. Bradach and Grindle put forth “a simple truth: the path to transformative scale in sprawling public systems requires changing the systems themselves.”The Clinic illustrated this in a partnership with New York City’s Human Resources Administration Emergency Intervention Services in identifying financial obstacles among domestic violence survivors seeking support, and then knitting solutions into the fabric of existing services. As a result, HRA-EIS’s contracts with service providers prominently feature financial security activities
as a core component of the services delivered at community-based domestic violence programs.

7. “Embrace the need for policy change”: A driving impetus for building Change Machine has been the promise to drive policy change. Already Change Machine is generating “big data”–an unprecedented body of information about working poor people’s financial security and the steps required to achieve their financial goals. We are eager to engage researchers and policy makers to analyze the data for policy and advocacy efforts.

8. “Don’t ignore for-profit models for scale”: Change Machine must be a viable business in order to be sustainable. The Clinic will learn a lot over the next year as Change Machine comes to market, and it is likely that we will modify the business model as a result, but like all widgets, its long-term success will depend on practitioners finding and paying for its value.

9. “Alter people’s attitudes, beliefs, and behaviors”: Here, Bradach and Grindle point to the very essence of financial coaching. At the core of coaching is to emphasize people’s strengths and hold them accountable to their goals, which is what makes this intervention so powerful. So powerful, in fact, that in training, practitioners typically apply their new skills and tools to themselves and their families first. In doing so, they become advocates for the very capacity we are looking to build and the systems we are seeking to change.

As if the preceding themes weren’t enough, the Clinic knows Change Machine will achieve transformative scale because it was built by practitioners, for practitioners. The platform is fundamentally a solution created locally to resolve the financial insecurity among the communities we care so deeply about. As such, Change Machine will transform the lessons the Clinic has learned on the ground into large-scale, system-level solutions.

Is a Bank Account Required to Build Financial Security?

Banks and Check Cashers

Is a Bank Account Required to Build Financial Security? (Tweet This!)

Dr. Lisa Servon’s recent Op-Ed in the New York Times asks whether a bank account is required to build financial security.  In considering this challenge, I was reminded of losing my wallet not too long ago.

Between the morning marathon of getting my three daughters out the door for school and the walk to the subway, my wallet disappeared into thin air.  Standing at the turnstile, my head swirled with questions and decisions:  How was I going to get to work without a debit card to pay for a new MetroCard?  How quickly could I get to a computer to cancel my ATM and credit cards?  Unsure if my husband helped himself to part of my last ATM withdrawal, how much cash did I actually lose?

First I scrambled, running back home to raid my 8-year-old’s piggy bank so I had enough quarters to get to work. Not only did I pay a $1.00 surcharge for a new MetroCard, but also spent $2.50 for the ride, where normally the cost is auto-paid monthly with pre-tax dollars, effectively bringing the cost per ride to closer to $2.00.  At work, I had to borrow a colleague’s Amex corporate card so I could make a business lunch happen.

Over the next few days, I carefully planned all my transactions three or four steps ahead until I replaced my wallet’s contents.   And I’m lucky of course:  If I had a prepaid debit card, or held on to a personal check as a form of savings, I might have suffered a much greater loss.

Tens of thousands of people probably lose their wallets everyday, but 17 million people manage their finances without a bank account.  For them, the same scramble, premium expense, borrowing and enhanced risk that I experienced when I lost my wallet is actually the norm.  And for most, access to low-cost and transparent banking is the solution.

Except when the options are neither low-cost, nor transparent.

Take Honey, a Clinic customer.  Honey is a 34 year-old Newark resident who met with one of the Clinic’s Financial Coaches for help with overwhelming credit card debt she incurred when dealing with a medical problem.  As the Coach assessed her income and expenses, a monthly $20.00 charge for consistent access to her credit report by her bank—a reputable, well-known, national financial intuition— was an easy target for trimming.  Honey was relieved to know the same information was freely available through annualcreditreport.com.

This appreciation for the true costs of banking underlies the Clinic’s reasoning for modifying our banking outcome.  As Dr. Lisa Servon mentioned in her recent New York Times Op-Ed, the Clinic used to measure success as “increased use of mainstream services and lowered use of fringe services.”

This was also a topic Dr. Servon and I discussed on a recent panel.  Shortly after the Clinic’s founding in 2005, we observed the increasing prevalence of products and services like overdraft protection or credit monitoring had mainstream banking services looking more predatory.  Working in impoverished communities we also were recognizing that many “fringe” services were, in fact, accessible and transparent.

Thus, as an organization whose mission is to build the financial security of working poor people, we decided to remove our value-laden categorizations and instead encourage customers to “do the math.”  Today we focus on the cost of banking products and services instead.

By helping our customers focus on being the best possible consumers, the Clinic believes we are in a better position to help them build their financial security. For Honey, this meant $240.00/year back in her pocket;not an insignificant sum for someone whose annual salary is in the mid-$20,000s.  For many other Clinic customers, this might mean having a savings account, but keeping day-to-day transactions in cash, or becoming a member of a community development credit union. For others, it means accessing check cashers because accurately anticipating costs is more valuable to them than a relationship with a mainstream bank.

There are so many different paths to greater financial security that we should not assume they all include a walk through a bank.

Quantifying Mission: The “Cash Value” of the Clinic’s Work

Among many accomplishments in the Clinic’s nearly 10-year history, we are particularly proud to have put over $28 million back in the pockets of our customers. Early on, the Clinic set out to establish a taxonomy of how we were accomplishing our mission. Once we had an outcome framework established, we turned to quantifying the value of delivering that mission. We started to think of this as the “cash value” of our mission. In other words, how do we gauge the total debt alleviated, predatory bank fees avoided, and new savings established?

The free tax preparation field had forged a whole set of parameters to quantify the impact of its work on working poor tax filers. Led by organizations such as the Center for Economic Progress, the field is able to communicate the value of its volunteer hours, the predatory products avoided, and the refunds secured. Meanwhile, philanthropic organizations such as Robin Hood Foundation were drilling down on “return on investments” by asking nonprofit providers to help assess the value of the poverty alleviation services they were delivering.

Against this backdrop, the Clinic set out to define the “cash value” of its financial education, coaching, and counseling services. It arrived at the following assumptions and definitions:

• Assets: Any savings—whether related to alleviating household budget stress through work supports or actual formal savings—attributable to our Financial Coaches’ work with customers.
• Banking: The value of any reduction in banking service or product cost that a Financial Coach garners for customers.
• Credit: The aggregate difference in a year’s worth of payments at an assumed debt amount, with credit scores tied to a range of interest rates.
• Debt: The face value of debt changed when a Financial Coach negotiates a lower interest rate, or when a Coach negotiates a lower interest rate.
• Taxes: The credits and refunds a customer receives due to the help or advocacy of a Clinic Attorney or Financial Coach.

George and Tiffany are an illustration of how the Clinic’s “cash value” grows. George and Tiffany are married and have been working with a Clinic Financial Coach for a few months. Once they established a financial goal of securing a nicer apartment, they focused primarily on household budgeting to pay off George’s federal student loan by the beginning of 2015. They also worked to improve George’s credit, while establishing Tiffany’s new credit history. With the Financial Coach’s support and tools, they negotiated and paid down their debt quicker than they anticipated, allowing their savings to accumulate faster, too. This summer, they met their goal of building $10,000 in emergency savings, and have now decided to focus their efforts on purchasing a home rather than renting another apartment.

George and Tiffany’s new savings caps a year when the cash value of the Clinic’s mission surpassed the $25 million mark: Which is now $28,843,492.87. Closing in on our 10-year anniversary, the Clinic is pleased to have reached such a significant milestone. We are certainly looking forward to an exponential goal for our 20th anniversary!

A History of the Clinic Through How It Defines Its Mission

Assisting financial clients through Change MachineA defining moment in the Clinic’s early history was our effort to quantify and qualify what we meant by our mission: To build the “financial security” of our working poor customers. It was one thing to define mission clearly in the business plan leading to the organization’s founding, but quite another when actually working with people, partners, and investors. What once seemed precise became murky when viewed through the lens of our customers’ lives, problems, and dreams for their future.

We asked ourselves a basic question: How will we know we are accomplishing our mission? How will we know our customers are “there”? It’s one thing to know what activities we want our customers to engage in, but quite another to feel comfortable in knowing that we’re having a positive influence and are actually facilitating their economic mobility. Plus, there is the personal side: Starting a nonprofit business is no joke. The entire team’s hard work, long hours, and devotion to our customers come from dedication to the mission. We needed to know—at any moment—where we were in relationship to that mission.

Quantifying and qualifying our mission started with a review of the first 100 or so customers. A small team of volunteers and a financial coach (actually, the only employee) and I set out to map all the work we were doing. We catalogued all the tax returns filed, bank accounts opened, and savings started. We categorized all of the presenting issues and problems and asked ourselves, “When these are resolved, are they creating financial security and, if so, how and when?” “What does a successful trajectory between poverty and prosperity look like?”

The resulting map was taxonomy of financial security:

  • Goals: Having specific and measurable financial goals are the cornerstone to all financial education and the driver to the entire financial counseling process.
    Targeted Outcome: Articulated goal and verifiable activities toward that goal with the Clinic’s Financial Action Plans..
  • Assets: The presence of a safety net to vastly improve working poor families’ ability to make ends meet and weather financial stressors.
    Targeted Outcome: Consistent savings.
  • Banking: Avoiding predatory and fringe financial services (from rent-to-own outlets to cash advance options) and being “banked” increases the resources families have to spend on necessities.
    Targeted Outcome: Increased use of mainstream banking services and lowered use of fringe services.
  • Debt: Limiting unhealthy debt not only alleviates budget constraints but also promotes economic security because it frees up resources for “good” debt like student loans or mortgages.
    Targeted Outcome: Improved debt to income ratio.
  • Credit: The increasing importance of credit reports to transactions outside of applying for major loans like applying for a job, opening a bank account, or obtaining housing makes it critical for working poor families to know the contents of their credit reports and understand their score.
    Targeted Outcome: Improved credit score.
  • Taxes: For good or bad, the U.S. Tax Code has become the nation’s primary conduit for alleviating poverty: the Earned Income Tax Credit dollars exceed that of all other work and income supports combined. Tax refunds are a critical resource to helping the working poor achieve economic mobility.
    Targeted Outcome: Portion of refund used for savings and financial goals.

These five outcomes were supported by dozens of milestones, that we eventually differentiated by activities or key performance indicators, and hundreds of inputs such as meeting time or financial education materials. Over time, we dropped the ratio from the debt outcome to only focus on debt alleviated, recognizing that our financial coaches had less influence on customers’ employment and career options.

We also changed the banking outcome substantially: the increasing prevalence of products and services like overdraft protection had mainstream services looking more predatory;meanwhile, “fringe” services were accessible and transparent. Thus, we decided to “do the math” and focus on the cost of banking products and services. Critically, we are continuously tinkering with the overarching definition of high-performance: Three out of five outcomes? One asset-related outcome coupled with one deficit-related outcome?

And we are still tinkering. We recently learned so much about our relationships with our customers and their financial security through a recent random controlled trial. The Clinic was one of two organizations nationally to conduct the study on its financial education and coaching program at the behest of Urban Institute and the Consumer Financial Protection Bureau. This research will provide evidence of the effectiveness of Financial Coaching as a strategy to help empower consumers and determine what aspects of coaching work for whom and under what conditions.

I credit that early focus on understanding how, when, and why our mission actually impacts the lives of our customers. That internal compass, and the Clinic’s ability to adapt to changing circumstances, continues to drive our success.