The City of Savannah is a leader in developing innovative anti-poverty strategies, according to a report released by the Corporation for Enterprise Development (CFED) on municipal financial empowerment.
The new field – “municipal financial empowerment” – goes beyond traditional efforts aimed at building residents’ income by increasing knowledge of and access to affordable financial products, encouraging savings and investment, and protecting residents in the financial marketplace.
According to the CFED report, municipal financial empowerment breaks new ground because city governments are entering an arena previously occupied only by non-profits. Savannah and others have launched dozens of creative ways to leverage their power to help residents with low income build wealth and assets.
In Savannah last year, for example, Georgia’s Own Credit Union was able to offer an alternative rapid anticipation loan at several Volunteer Income Tax Assistance (or VITA) sites. These loans compete with commercial tax preparers’ loan products, which can cost consumers anywhere from $300-$500.
In 2010, 136 loans were disbursed to qualified consumers by the credit union for a total amount of $415,944 at an average cost of just $15 per loan.
The all-volunteer VITA sites, which operate under the umbrella of the Savannah-Chatham Asset Development Coalition and the City’s Bureau of Public Development, prepared more than 5,000 tax returns for free in 2010, bringing back to the local economy a total of $6,817,461 in federal returns. More than $3 million came back to the community in Earned Income Tax Credits for qualified families.
The city’s Bank On Savannah initiative reported just over 1,000 new lowcost bank accounts were opened by 11 participating financial institutions in its first year.
More than 4,000 individuals have gone through financial education classes, provided at no cost by Consumer Credit Counseling Services with Step Up Savannah, covering such topics as personal budgeting, banking, credit scores and more, at public libraries and other sites throughout the city.
“Whether it’s through access to mainstream banking, financial education and counseling, asset building or consumer protection, this work offers important and replicable ways to advance the economic security of their cities’ populations,” said Mayor Otis Johnson. “Going forward, the challenge of replicating these strategies across the country will lie, in part, in ensuring that such initiatives enhance the effectiveness of traditional antipoverty approaches.” Cities, often working with private sector, nonprofit and philanthropic partners, have developed a variety of programs to meet those goals, in many cases embedding them within existing anti-poverty efforts.
The report was released to coincide with the U.S. Conference of Mayors winter meeting in Washington.
CFED was joined in releasing the report by the Cities for Financial Empowerment Coalition which was created in 2008 to bring together city governments implementing these new initiatives.
The CFE Coalition now includes Chicago, the county of Hawaii, Los Angeles, Miami, Newark, N.J., New York, Providence, R.I., San Antonio, San Francisco, Savannah, Ga., and Seattle.
“Helping individuals and families achieve economic security has never been more critical than it is today,” said Andrea Levere, president of CFED, a national nonprofit that advocates for expanding economic opportunity. “This work has given us a new way of thinking about poverty, one based on the depth of overall financial stability, not merely based on income. The cities that are pioneering these new strategies are to be applauded – and other cities need to join them,” she said in releasing “Building Economic Security in America’s Cities: New Municipal Strategies for Asset Building and Financial Empowerment.”