Individual Development Account Initiative
Following are lessons learned by existing IDA programs and recommendations for best practices in IDA Program design.
Be Sure Your Agency has the Capacity to Operate an IDA Program. IDA Programs are most effective when housed in agencies that have additional administrative and programmatic resources to support them. Also, since IDA Programs are long-term (Participants typically remain in IDA Programs for 3 to 5 years), your agency should be confident of its ability to sustain the IDA Program over time. Your agency's Strategic Planning process, in which you analyze agency and community strengths and weaknesses, opportunities and challenges, will give you a clear idea of your capacity and help you decide if an IDA Program fits within your agency's mission.
Spend Adequate Time Designing Your IDA Program. An IDA Program must be designed to ensure that Participants have the ability and sufficient time to reach their savings goal. The match rate must be adequate to allow an asset purchase in your geographical area. This requires careful Program planning and design. Be sure to include potential Participants in the IDA Program design process, so that you can be clear on the expectations and requirements of your target population.
Choose Program Partners Carefully. Strong partners are important to IDA Program success. Few, if any, community organizations have the capacity to operate an IDA Program alone. Financial institution partners can hold accounts, assist with Financial Education, and provide financial and other resources. Other community partners can refer Participants, offer training and counseling, and provide funding. Look for partners that prioritize the IDA Program by dedicating resources and staff time to it and then carefully define the parameters of your collaboration in writing.
Recruitment of Participants May be Harder Than You Expect. IDA Programs have typically found that recruitment can be difficult, especially when a Program is just starting up. You are asking individuals and families to change their behavior around saving and spending, and to make a long-term commitment to participate in the Program. Not everyone is ready to make this commitment. Marketing through your agency's existing programs is a good way to recruit, since your agency has already built up a solid foundation of trust with customers. Recruitment will pick up when word-of-mouth spreads to the family and friends of your first IDA participants.
Include Proven Program Components. Best practices in IDA Program operation have shown that IDA Programs are most successful if they are made up of the following components: Orientation, Assessment, Financial Education Training, IDA Accounts, Case Management/Crisis Intervention, Asset-Specific Training/Savings Clubs, Purchase of Assets, Post-Purchase Follow-Up and Support.
Plan for at Least One Full-Time Staff Person in Mid-Sized Programs. To operate IDA Programs effectively, a good rule-of-thumb is one full-time staff person for each 50 Participants. Tasks that must be performed by this staff person will include recruitment, assessment, development of a Savings Plan with each Participant, operating or arranging for Financial Education and Asset-Specific training, Case Management, monitoring Participants' savings, crisis intervention, referrals to outside agencies for services, arranging for withdrawals and asset purchases, and follow-up.
Carefully Design Financial Education Classes and Asset-Specific Training. Financial Education classes are critical to a Participant's successful start on their road to an asset purchase. Completion of Financial Education training (usually 6 to 10 classes) is a requirement for remaining in the Program. There are several good Financial Education curricula available (see the Financial Education section of this website) which cover topics such as budgeting, responsible credit use, savings, investments, taxes, etc. Asset-Specific Training is provided monthly for the duration of the Program. Its purpose is to ensure that Participants receive training on resources needed to purchase specific assets and on how to maintain their assets after purchase. Schedule classes at times convenient for participants and, if possible, offer childcare and transportation to make it easier for participants to attend the classes.
Closely Track and Support Participants' Progress. Regular Case Management is critical to success. IDA Programs should closely monitor Participants' deposits and withdrawals and attendance at training and case management sessions. Be sure to use an effective Management Information System. Encourage Participants by acknowledging and reinforcing positive behavior change.
Systematically Evaluate Your IDA
Program. Build an evaluation component into your IDA Program. By evaluating your Program against specific, measurable Goals and Objectives you will be able to judge the effectiveness of your Program, as well as contribute to the body of knowledge growing nationwide on the usefulness of IDA Programs in moving families to self-sufficiency.
Communicate Regularly with Other IDA Programs. The IDA field is still new and growing rapidly. Our knowledge of what works best is also quickly increasing. Use IDA resources, such as the IDA list serve and the IDA Learning Network (see the Resources section of this website) to find the latest information on state and federal IDA Policy and to share what you are learning.
Some of the above information was adapted from
material published by the Corporation for Enterprise Development (CFED),
1200 G Street, NE, Suite 400, Washington, D.C. 20005.