Individual Development Accounts: “Income feeds people’s stomachs. Assets change their lives.”
Pictured above: From left, Kameri Christy, Yvette Murphy-Erby and Marcia Shobe. All photos by Logan Webster
Put three social work researchers around a table, ask a couple of questions and turn on the audio recorder. That was the plan, and it worked because the researchers are Kameri Christy, Yvette Murphy-Erby and Marcia Shobe, three professors with a commitment to improving the lives of women as well as years of experience together doing just that. In addition to discussing their research, the three emphasized the importance of their feminist perspective in designing and implementing projects.
In particular, Christy, Murphy-Erby and Shobe have studied programs that offer women Individual Development Accounts. IDAs are special savings accounts that make it possible for low-income individuals to save money, build their assets and enter the financial mainstream.
While women in IDA programs may have learned habits of saving from their parents, daily demands can derail saving for the future, despite the best intentions. IDA programs are designed to bridge the gap between planning for the future and carrying out those plans by supplementing the women’s own savings with matching funds.
The funds are matched by government or private-sector organizations at the rate of one to one or two to one or sometimes more. The savings accounts are dedicated to purchasing an asset such as a home, a small business or a college education.
Marcia Shobe: I think what has excited us about the IDAs is that here is a program that provides a match for savings to low- and moderate-income individuals in order to buy a house or go to school or start or expand your own business. These are the same tax incentives that are offered to moderate- and upper-income Americans in the U.S. tax code. So IDAs offer the same things to the lower- and moderate-income. It will help level the playing field, and the primary participants in IDAs are women.
Kameri Christy: And people of color. For people to move up socioeconomically, some of the more successful programs have been asset-building programs, like the GI Bill where people who have served our country could come back and get an education or low-interest home loans.
Shobe: I remember when IDAs first started, our mentor was talking to folks in the community. She was explaining IDAs. A woman said, “So it is like a 401K only for us, for poor people.” She said to her, yes, that is exactly what it is.
Murphy-Erby: There are still a lot of people who distrust 401Ks, but not to that same level, so they are willing to put money in and their employer will match it. But when you talk about that same concept and apply it to moderate- and low-income families, all of the sudden it becomes something else. It is looked at in a negative light. Not only are the participants not really valuing this whole notion, oftentimes you get people from the community who see it as welfare or a handout or something negative.
Shobe: Interestingly enough when IDAs first started they tried a 1:9 match that was with private funding, and it did not work as well as the 1:1 or the 1:2, because people did not feel that they were earning it. When people go to financial education or financial literacy classes, and they speak to legislatures, and they write letters, and they participate and save their money every month, they feel like okay, I am giving, too, and earning this match. I think some ownership comes of that, which I think is very feminist-based thinking and perspective as well. I am working for this as well — it is a give and take.
Why feminist research?
Yvette Murphy-Erby: A reason I think feminist research is so important is to get those voices in the center of the conversation, to get those experience out there, but also to continue to challenge the status quo and policies that are oftentimes constructed around the dominate way of thinking and the dominate paradigm.
Christy: I think with feminism it is not an either/or, us-against-them, low-income versus middle-income versus upper-income. It is “both/and.” When one group of people has their rights protected and when we have social justice in one area, it really does spread across and benefits everybody in lots of different ways. I think that is another part of the research agenda that we have as well. We focus on marginalized populations, but we realize that anybody could become marginalized. In a blink of an eye, it could happen.
Shobe: I think the relationship aspect of the feminist approach is so integral to the IDA program movement and to the research. Other places have tried to institute IDA programs where they do some marketing, and they go to the bank, and they really have no one-on-one contact. Those programs have died. They don’t even get started and off the ground. It is word-of-mouth – it’s personal relationships that work. That is feminist research, too; it is all about the relationship and the meaning behind it.
When Shobe observed that the number one reason for bankruptcy in the United States is health care costs, the conversation went from the Affordable Care Act to a discussion about the difference between income and assets.
Christy: We did an article looking at health insurance, health status and medical debt. And, of course, what we found was that people with health insurance can have large amounts of health debt. All it takes is a major illness for you or a dependent or a partner, and you are right there with no money whatsoever.
So, what does this tell us about income and assets?
Christy: Income is what people need every week or every
month to pay their bills, buy their food, and make their rent payment or mortgage payment or whatever. But doing that doesn’t change their economic status. For people to actually be able to move out of poverty usually means that there has to be some type of asset or wealth component to that, like getting a house where they can build up enough equity so they will have that in case there is a rainy day or to get some type of post secondary training or education.
Shobe: Income feeds people’s stomachs; assets change their lives. They can start thinking about the future: ok, now that my debt is paid, what do I want for me? What do I want for my kids?
Murphy-Erby: One thing that I think is a really important component of the individual development asset account movement has been financial literacy education. Because again, you are talking about sometimes first generations and so first generation being banked – using a banking service. I think the IDA movement is not only looking at policy change it is also looking at some practical things and looking at some education. By this instruction at various levels, I think that it has been effective, and we have seen that in our research.
Christy: That is a really good point. When people don’t have information, they don’t know what their options are and they tend to not do things because it becomes too scary or intimidating for them. This goes back to being a woman, too, as far as financial literacy. I had none growing up. I think part of it was because of my gender, and also because my parents were very, very low income. When I first started in the IDA area, Marcia hired me to go to the classes to translate classes from English into Spanish for our Hispanic attendees there, and I learned so much stuff in those classes. I don’t want to be dependent on having to go to a banker who I don’t necessarily trust anyway to talk to me about points and cleaning up my credit. It is better for me to have that information and that is what financial literacy training does; it gives people handouts and booklets as well as having just having discussions about what different things mean and doing exercises to help them learn more about financial education.
What are the hurdles in instituting IDA programs?
Murphy-Erby: Trust is a major issue, and we saw that even in recruiting participants for our study. When we offered the opportunity to participate in the IDA, we realized that one of the major factors in recruiting participants was having someone who could take it to the community and say, “I have tried this it has worked for me.”
Shobe: That is true nationwide. When we started the program, we thought people would be waiting in line and knocking down the door. It took us a year, because all of our marketing was not going to work. It was word-of-mouth that worked. Our first meeting in the community, a man stood up and said, “What is in it for you?” I said that is a really good question. So we laid it out: We are doing a pilot program. We think we can change policy. We think we can level the playing field. We also want to conduct research and see what works and what does not.
I remember one community member, Regina, saying, so I told all my cousins about it, and they thought oh, yeah, another person – another white person – coming into our community and saying you give us your money and we will match it or whatever. Yeah, we have heard that song and dance before.
So, we worked with the credit union. I used to joke and call it the Bank of Bob. There was one guy named Bob who ran that credit union, and he had a personal relationship with everybody in our program, and they trusted him. We had to meet with the community and say who do you trust, who do you want us to work with. Because we tried it with other banks, and they were awful to our participants.
How does this all relate to feminist research?
Shobe: We can go in as researchers and say this is good this is the finding we need to do this but really it is the participants whose voices need to be heard. It is the people in the community that matter the most.
Murphy-Erby: I think giving light to their experience is really important. I think one of the things that feminism does it is not just research for the sake of research but it really is a bout change, it is really is about social justice, it is really about what are the major implications from the standpoint of those who are most affected. I think that is really key in terms of thinking about policy and thinking about programming. I think that fits very well with social work, but it also fits very well with the feminist perspective. I think our team melds those two pieces together nicely.
Marcia Shobe is professor and direction of the University of Arkansas School of Social Work and is an affiliate faculty member in the university’s Public Policy Ph.D. Program. Her research interests encompass the areas of health disparities, anti-poverty policy and practice, community development and child welfare. She is principal investigator on a 10-year grant for over $1 million from the Ford Foundation to study outcomes for low- and moderate-income savers in IDA programs in Arkansas and New Mexico. Also, she is principal investigator on a U.S. Department of Health and Human Services grant related to scholarships for disadvantaged students. She publishes frequently in peer-reviewed journals and presents at national and international professional conferences. At the university, she edits Inquiry, the undergraduate research journal.
Kameri Christy is a professor of social work and is an affiliate faculty member in the university’s Public Policy PhD Program. Her research interests include economic development and security for abused women, decreasing violence against women, and anti-poverty policies and programs. She has been a co-primary investigator with Marcia Shobe on grants from the Ford Foundation and the Winthrop Rockefeller Foundation (on which Yvette Murphy-Erby is also an investigator). She is a principal investigator on a grant from the Indiana Housing and Community Development Authority and a co-investigator on a grant from the Winthrop Rockefeller Foundation to evaluate Educational Development Account pilot programs. She publishes and speaks frequently at academic conferences, nationally and internationally, and has been an invited presenter at think-tank sessions hosted by the Ford Foundation, the U.S. Department of the Treasury, the Social Security Administration, U.S. Department of Health and Human Services, and the Urban Institute.
Yvette Murphy-Erby is a professor of social work and interim associate dean of the Fulbright College of Arts and Sciences at the University of Arkansas. In addition to her work with Marcia Shobe and Kameri Christy on IDA programs, she has studied African American grandmothers raising their grandchildren (funding from the Social Work Research Center, University of Arkansas), conducted various literacy projects in the Marshallese community in Northwest Arkansas (funding from the Women’s Giving Circle and the Office of Institutional Diversity, both at the University of Arkansas) and served as co-principal investigator on an adolescent pregnancy prevention program (funding from the U.S. Department of Health and Human Services). In addition to publishing and presenting nationally and internationally, she serves on the editorial boards for the Race, Gender & Class Journal and for Intersectionalities: A Global Journal of Social Work Analysis, Research, Policy, and Practice.