NEWS - Editorial & Opinion

Commentary

By Suzanne Donovan

Savannah is one of 11 cities on the front lines nationally finding new paths to move working families out of poverty.

The city’s efforts, bolstered by a unique partnership with businesses, Step Up Savannah, and other nonprofits are cited in a new national report about the work of the “Cities for Financial Empowerment” network. These municipalities are finding ways to motivate individuals and families to build financial stability.

Our city is not just “doing the right thing” in promoting financial security. Whole segments of our community live with an unacceptable level of risk. For more than 30 years Savannah has labored with a persistently high rate of poverty – overall 22 percent but as high as 50 to 75 percent in several census tracts. We have a median income of just $32,616 and as much as 10 percent of city residents are completely unbanked. This adds up to lost purchasing power and opportunity. It’s a matter of economic development.

The report, “Building Economic Security in America’s Cities,” was issued by the Corporation for Enterprise Development on Jan. 20 in Washington, D.C. at a national press briefing that highlighted the work of the CFE network. It is the broad overview focusing on the power of municipal governments when they partner with nonprofits and the private sector in the emerging field called “asset development.” Recognizing that income from jobs is not enough to move families out of poverty, these cities have realized that they have the ability – and the need – to champion policy initiatives that enable asset growth, savings and upward mobility.

Two services in Savannah are solid examples of what local government can do in creative partnerships with nonprofits and the private sector:  Bank On Savannah and the network of Volunteer Income Tax Assistance sites. The city has invested funds to market not only the Bank On Savannah campaign but also to promote eligible citizens’ use of free tax preparation services offered at sites throughout the city and county.

Bank On Savannah is a low-cost checking product offered by 11 financial institutions brought together under the umbrella of a banking task force convened by the city and Step Up. The partnership responded to a market need – research in Savannah showed we have an estimated 10,000 residents in the high-poverty census tracts that do not use traditional banking services – and adopted a concept first developed by the City of San Francisco. We learned about the “Bank On” idea at Cities for Financial Empowerment meetings and launched our campaign in 2009.

The city’s investment of public dollars has also leveraged new private foundation investment in financial education. In 2010, approximately 4,500 people have attended workshops and events at various sites offered by Consumer Credit Counseling Services.

The city has also been a partner in the Chatham-Savannah Asset Development coalition chaired by the nonprofit Neighborhood Improvement Association. Since 2001 the coalition has been providing free income tax preparation by IRS-certified volunteers for qualified residents (each year the income level changes; in 2011, families that make $50,000 or less are eligible for free assistance). Savannah has not only invested funds and offered marketing expertise but city employees volunteer their time to prepare taxes.

Last year, the combined total federal returns prepared at VITA sites was almost $7 million. Further, many of the families eligible for free tax return preparation are also eligible for the federal Earned Income Tax Credit. In 2009-10, more than $3 million in EITC dollars came back into our local economy. Plus, many families filing at the VITA sites got information about Bank On Savannah and opened bank accounts as a result.

As the CFED report states, “Municipal leaders are connecting families to programs that expand access to mainstream banking and wealth-building opportunities, as well as helping families protect the assets they have and become more financially stable. Across the country, local leaders are pioneering new ways to innovate and leverage the resources and regulatory power of municipalities to work across departmental silos and public/private sector divides to scale up financial empowerment and asset building opportunities for low- and moderate-income families.”

While Savannah has played a leading role with its partners such as Step Up Savannah, financial institutions and the VITA coalition among others, much more remains to be done. It lags behind its sister cities in the CFE network in its commitment of resources, and it needs to more effectively integrate asset-building programs with the more traditional approaches to reduce poverty, such as job development and housing supports. By strategically combining these efforts with creative financial education, and additional innovative funding streams for safe and decent housing, Savannah could truly make some headway in even its deepest pockets of poverty.

A video of the Washington, D.C. briefing can be viewed online at: Part One – Briefing. Links to the report may be found at: http://cfed.org/knowledge_center/events/building_economic_security_in_americas_cities_release_event

Suzanne Donovan is the communications director of Step Up Savannah