By: Debra Skodack
April 26, 2010
When Shameka Baskin was told she would graduate from high school -- her first step toward her dream of being a defense lawyer -- she broke down.
Today, the United Way of Greater Kansas City will unveil a program to ease such financial fears for teens like Baskin.
The Decade of Difference program is aimed at low-income young people ages 16 to 26 -- the 10 years when people's financial futures can be determined by the post-secondary education they receive. The program's cornerstone will be individual development accounts in which a person's savings are matched by an agency, a federal grant or both.
United Way officials hope the program will help break a cycle of poverty.
"There is a stereotype that low-income households cannot save," said Jason Wood, a senior issue manager for the United Way. "That's not true, and this is going to prove it."
Financial stability is one focus of the United Way's community impact agenda. The agency has allocated $225,000 from last fall's fundraising campaign toward the program. It also has applied for a $225,000 federal grant. It that is approved, about 100 participants could get $1 from United Way and $1 from the federal grant for every dollar they save.
Individual development accounts aren't new to the Kansas City area. The Family Conservancy in Kansas City, Kan., has offered such accounts since 1997. Participants in that program used most of the money they saved to buy homes, start small businesses or pay for post-secondary education, said Julie Riddle, the organization's director of family support services.
In the conservancy's program, participants amassed about $2.1 million, including the conservancy's $2 match for every dollar saved. More than 1,000 people signed up for the program, but only 526 stuck with it long enough to make a purchase.
There isn't 100 percent success because many participants "are living so close to the edge" that long-term planning is difficult, Riddle said. Financial or family hardships often affect the ability to save, she said.
Yet those who succeeded were changed, Riddle said. "Before, they didn't believe they could save," she said.
The United Way program will be open to residents of Jackson, Johnson, Clay, Platte and Cass counties. It won't extend to Wyandotte County, which has its own United Way.
Every participant in the new program must attend 10 hours of free financial education.
"I think financial literacy is one of the most important ways people of lesser means can break the cycle of poverty," said Jimmie Stark, the chairman of Decade of Difference and a former chairman of the United Way.
The program will begin this summer.
To qualify, a participant must be from a household with income of no more than $44,100 for a family of four or $21,660 for an individual.
For now, the program will limit matches to each participant to $2,000 from United Way and $2,000 from the federal grant, for a total savings of $6,000, the amount that the United Way estimates tuition for a two-year degree would cost.
There is no monthly savings minimum, but a caseworker must approve each participant's saving plan, and each participant must save for at least six months. A participant must show proof of earned income.
Baskin already has $100 saved from her job as a cashier at a fast-food restaurant. She hopes to get financial aid and scholarships when she enters college next fall.
Baskin said she has a lot to learn about financial management if she is going to get the education she wants. She hopes to get an associate degree from Metropolitan Community College-Penn Valley, a bachelor's degree from the University of Missouri-Kansas City and ultimately a law degree.
"I would join this program because it would help me all along," Baskin said.
"I am going to need a lot of schooling."
Decade of Difference participants are being recruited through the Family Conservancy, the Don Bosco community centers, El Centro Inc., the DeLaSalle Education Center and Catholic Charities of Kansas City-St. Joseph and northeast Kansas.
For more information, contact those agencies or call the United Way's 211 referral line.