— Edited by Rae Tamblyn, Research Assistant, CSBG Services, NASCSP —
Economic security is important to all American families and low-income families are no different. But for those struggling to make ends meet, the financial barriers to basic essentials of the American dream can seem daunting. That’s where community action agencies (CAAs) come in to fill the gaps and help families reach their goals. Prosperity Works, a New Mexico statewide non-profit corporation, is an excellent example of how community-based organizations, including tribal entities and Community Action, working together can build stronger communities and support economic prosperity. It is through this statewide consortium that Prosperity Works implements and funds one of the nation’s largest community-based asset building initiatives: the Individual Development Account (IDA). An IDA is a matched-savings opportunity created to provide an incentive to save, invest, and accumulate assets among low- and moderate-income working families. Assets, such as a small business, help low-income families move up the economic ladder. Since 2006, over 1,200 IDAs have been opened in New Mexico, nearly 700 families have purchased their assets, and over 500 families continue to save each month.
Prosperity Works partners with the Community Action Agency of Southern New Mexico (CAASNM) to implement IDA’s and to provide advice and support as families and individuals move toward economic security. For example, the IDA initiative in Doña Ana County, New Mexico, provides a $4 match for every $1 that is saved, up to a $4,000 match. Eleven IDA savers have invested in Child Care Services. All saved over $1,000 in an IDA, and were matched with $4,000 for business expenses. Nine participants expanded existing businesses, two started new business, and six now own their home. The financial education, IDAs, and support from CAASNM and other local CAAs were cited as critical to the project’s success. The IDAs, along with financial capability training and business plan support from the local CAA, enabled participants to put dreams into action and take significant steps toward economic stability.
Thank you to DeBruler, Inc. for bringing this successful project to our attention.