By Mae Watson Grote | Founder and CEO | The Financial Clinic
Economic policy for low-income Americans is often written by economists. But alternatively, what might a practitioner-based approach look like? How would the success factors change?
At The Financial Clinic, we advocate for a nation where every American is financially secure, and for economic policy that centralizes the needs of America’s working poor. Currently, around seven percent of Americans remain unbanked, and possibly up to twenty percent of banked Americans report needing to rely on non-traditional financial services. The Federal Reserve’s own SHED data reports that thirty-five percent of Americans would be unable to pay all of their monthly bills in full if they were faced with a $400 emergency. The impact created by this financial insecurity extends far beyond individual households.
It is clear that improving financial inclusion and financial security is not just beneficial to low- and moderate-income families: it strengthens the American economy.
The Financial Clinic understands the risk financial exclusion and insecurity present to the health of our nation, because its practitioners work everyday directly serving working poor families and building their financial security through an outcomes-oriented, strength-based model empirically proven to deliver measurable results. The Clinic’s leadership within the financial security field gives us a unique perspective on the daily struggles of working Americans and the impact that economic policy has when it fails to fully take into account their perspective.
A central goal of my career has been to build the financial security of working poor Americans by arming them with the financial knowledge and capability they need to achieve their goals. After well over a decade of work in this field, one of the primary lessons that I have taken away is that knowledge on its own is insufficient to achieve lasting financial security. Hard working people across this country face far greater barriers than a lack of financial literacy. Americans today face a dynamic, challenging economic and financial landscape that, while showing positive signs of strength, continues to leave far too many without the skills or the income they need to reach their potential.
To address these critical challenges, The Financial Clinic has focused on bringing the people that we serve – and critically, the organizations that serve them – to the forefront of our work. By democratizing solutions to systemic poverty, it is possible to unlock the enormous potential of human service and community development practitioners, and leverage their unique knowledge and skills to inform a blueprint for how anti-poverty efforts can be strengthened nationwide.
The U.S. Department of Labor reports that there are 1.8 million workers on the front-lines of anti-poverty work. My vision is that every one of them have a financial security tool, product, or practice in their arsenal that informs their unique mission and meets their customers where they are. Our vision – together as practitioners, nonprofit leaders, and economists – is a social service sector where job developers have all the tools they needed to spot their client’s credit problems, domestic violence advocates are trained in practices to screen for financial abuse, and community college counselors help their students readily and effectively pair financial goals with career goals.
With the aim of harnessing the power of technology for social good, we created our financial coaching platform Change Machine. The platform is integral to our vision of scaling up our rigorously evaluated financial coaching model – the first in the field – and empowering social service practitioners across the country to build the financial security of their communities. We pair the tools and resources of the coaching platform with a set of wrap around capacity building supports focused on integrating financial security into the existing set of services any organization offers. Through the direct provision of financial coaching, and the support we provide to over 460 social service organizations across the country, we have been able to put nearly $80 million dollars back in the pockets of over 48,000 customers.
I am so proud of what The Financial Clinic has accomplished, but our work remains unfinished. We are redoubling our efforts to leverage the household financial data we collect through Change Machine, the lived experience of our customers, and the unique capabilities of our organizational partners to develop best practices, innovative financial products, and economic policies that will build a more financially secure America.