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Individual development accounts update: Research Highlights, Legislative Opportunities and innovative ida practice. Overview of Today’s Webinar. Ida Rademacher , Moderator and Vice President, Policy and Research, CFED IDA research studies and ten-year impacts of IDAs

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Individual development accounts update: Research Highlights, Legislative Opportunities and innovative ida practice

Overview of today s webinar
Overview of Today’s Webinar

Ida Rademacher, Moderator and Vice President, Policy and Research, CFED

  • IDA research studies and ten-year impacts of IDAs

  • Legislative opportunities for IDA policy: AFI funding and reauthorization

  • NeighborWorks Umpqua DreamSavers Program


  • All webinar attendees are muted to ensure sound quality (this webinar is being recorded)

  • If you have any trouble dialing in, you can listen through your computer by connecting speakers or a headset to your computer

  • If you experience any technical issues, please email [email protected]

Asking questions
Asking Questions

  • Q&A sessions at the end of each presentation

  • Ask a question anytime by typing the question into the text box of the GoToWebinar Control Panel

  • Answers to questions not addressed during the webinar will be posted online along with the webinar recording

    • Q&A facilitated by Lauren Stebbins, External Relations Associate, CFED


  • Caroline Ratcliffe, Senior Fellow, The Urban Institute

  • Signe-Mary McKernan, Senior Fellow/Economist, The Urban Institute

  • Michal Grinstein-Weiss, Associate Professor, University of North Carolina School of Social Work

  • Carol Wayman, Federal Policy Director, CFED

  • Inemesit Imoh, Policy Associate, CFED

  • Betty Tamm, Executive Director, NeighborWorks Umpqua

  • Rebekah Barger, IDA Program Manager, NeighborWorks Umpqua

What Do We Know About IDAs?Urban Institute Literature ReviewZielewski, Ratcliffe, McKernan, et al. Update Webinar: New Research Highlights, Legislative Opportunities, and Innovative IDA PracticeNovember 15, 2011



  • Two major areas:

    • Overall effect of IDA program participation

    • Effect of specific program design features

  • Three outcome areas:

    • Assets and debts

    • Economic outcomes

    • Comparisons of benefits and costs

  • Research includes experimental, quasi-experimental, and non-experimental methods


Overall effect assets and debts
Overall Effect: Assets and Debts

  • Low-income individuals can and do save.

  • No evidence that IDA participation increases net worth in the first 3 to 4 years.

  • IDA participation found to increase homeownership rates of renters after four years.

  • IDA participation is associated with business ownership and post-secondary educational advancement.


Overall effect economic outcomes
Overall Effect: Economic Outcomes

  • IDA participation is associated with:

    • Increased employment

    • Better budgeting and financial planning

  • IDA participation is notassociated with:

    • Increased earnings

    • Reduced receipt of public assistance benefits


Benefits and costs of idas
Benefits and Costs of IDAs

  • Few studies of costs and benefits of IDAs.

  • Existing research looks at ADD and compares program costs to dollars saved.

    • $1 of net savings costs $3.

  • Analyses of different programs or benefits may produce different results.


Program design features financial education
Program Design Features:Financial Education

  • Hours of education received are associated with increased:

    • Savings

    • Deposit frequency

  • No relationship between hours of education and asset purchase


Program design features match rates match caps
Program Design Features:Match Rates & Match Caps

  • Higher match rates are:

    • Associated with greater likelihood of being a saver and staying in the program

    • Not associated with higher savings

  • Higher match caps are associated with higher savings


New afi program evaluation urban institute rti and mef associates
New AFI Program EvaluationUrban Institute, RTI, and MEF Associates

Research questions
Research questions

  • What is the impact of AFI program participation on immediate, short-run outcomes such as savings, asset purchases, and material hardship?

  • How do specific AFI program design features affect immediate, short-term participant outcomes?


Importance of this project
Importance of this project

  • First experimental evaluation of individual development account (IDA) projects operating under the Assets for Independence Act

  • Builds upon prior IDA evaluation research


Basic evaluation design
Basic evaluation design

  • Two sites

  • At each site:

    • Control group and two treatment groups

    • Total sample of 1,000 people

  • Special funding announcement


Short run participant outcomes
Short-run participant outcomes

  • Savings patterns

  • Asset purchases

  • Debt holdings

  • Employment and earnings

  • Means-tested benefit receipt

  • Material hardship avoidance


Ten year impacts of individual development accounts on homeownership

Michal Grinstein-Weiss

Michael Sherraden

William Gale

William Rohe

Mark Schreiner

Clinton Key

Ten-Year Impacts of Individual Development Accounts on Homeownership

Evidence from a Randomized Experiment

American dream demonstration
American Dream Demonstration

  • The American Dream Demonstration (ADD) is the only randomized longitudinal experiment on IDAs in the US

  • Conducted in Tulsa, OK from 1998 to 2003

  • Eligibility: Individuals had to be employed and earn less than 150% of the federal poverty level at entry

  • Random assignment of 1,103 participants

  • Interviews at baseline (Wave 1), 18-months (Wave 2), and 4-years after assignment (Wave 3)

The add experiment
The ADD Experiment

  • Asset goals: home purchase, home improvement or repair, business start-up or expansion, post-secondary education or training, or retirement accounts

  • Match rate of 2:1 for home purchase and 1:1 for all other uses

  • Maximum matched deposit: $750 per year for 3 years; Participants could accumulate up to $6,750 for home purchase and $4,500 for other qualified uses

Major findings on homeownership from previous waves
Major Findings on Homeownership from Previous Waves

  • Findings from Waves 1-3 (1998-2003) indicate

    • Positive effect on homeownership

    • Homeownership rates rose rapidly in both groups and increased by about 7 percentage points more in the treatment group than in the control group

    • Treatment group was more likely to engage in debt-clearing activities to prepare to apply for a home loan

Add experiment wave 4
ADD Experiment Wave 4

  • Assessment of the long-term impact of IDA programs

  • Follow-up with both treatment and control group participants 10 years after random assignment (6 years after the end of the program)

  • Collaboration between UNC, the Center for Social Development, and the Brookings Institution

  • Data collection conducted by RTI International from August 2008 to April 2009

Loan characteristics and loan performance
Loan Characteristics and Loan Performance

  • 90% of mortgage holders at wave 4 in both treatment and control groups held fixed-rate mortgages

  • Average interest rate about 6.4% in both groups

  • Very few cases of serious delinquency or foreclosure in either group

  • No statistically significant difference between the treatment and control groups on loan characteristics or loan performance

Caveats for generalization
Caveats for Generalization

  • Self-selected and highly motivated people in both groups

  • Housing market in Tulsa

  • Other financial assistance and social support available in Tulsa

  • Crossovers

  • Pioneer IDA program


  • Large increases in homeownership for both the treatment and the control group over the 10-year period

  • Good mortgage products

  • No statistically significant impact on homeownership rates at wave 4

  • Control group members were able to catch up by wave 4

  • Within the IDA-eligible population, people with higher incomes may be more able to achieve homeownership


  • John D. and Catherine T. MacArthur Foundation

  • Annie E. Casey Foundation

  • Charles Stewart Mott Foundation

  • F.B. Heron Foundation

  • Rockefeller Foundation

  • Smith Richardson Foundation

  • National Poverty Center

  • University of North Carolina at Chapel Hill

Research q a
Research Q&A

  • Ask a question by typing the question into the text box of the GoToWebinar Control Panel

  • If you experience any technical issues, please email [email protected]

Afi preserve funding levels
AFI: Preserve funding levels

Senate HHS Appropriations Subcommittee:

$23.907 million (funding levels preserved)

House HHS Appropriations Subcommittee:

$8.9 million (funding levels cut 63%)

Conference Committee discussions beginning

Afi reauthorization priority changes
AFI Reauthorization:Priority Changes

  • Change the federal to non-federal match rate from 1:1 to 2:1.

  • Allow IDA funds to include replacement of outdated homes and home repair.

  • Flexibility with qualified expenses for education.

  • Raise the total amount families can receive from $2,000 single/$4,000 double to $5,000/$10,000.

  • Expand the income eligibility standards to include 80% of Adjusted Gross Income in addition to 200% federal poverty level and TANF eligible.

  • Support for state programs.

Afi reauthorization
AFI Reauthorization

  • Stephanie Tubbs Jones Assets for Independence Reauthorization Act of 2011 (H.R. 1623)

  • Waivers included

  • Committees of jurisdiction:

    • House Ways and Means

    • Senate Health, Education, Labor and Pensions (HELP)

Possible afi senate bill
Possible AFI Senate Bill

  • Pending AFI reauthorization bill in the Senate

  • The bill would be similar to H.R. 1623

Www cfed org

Latest on legislation, track bills, send messages

Policy q a
Policy Q&A

  • Ask a question by typing the question into the text box of the GoToWebinar Control Panel

  • If you experience any technical issues, please email [email protected]

NeighborWorks UmpquaUsing Research as a Tool to Help Shape an IDA ProgramPresented by:Betty Tamm & Rebekah Barger

Dream avers ida program
Dream$avers IDA Program

  • 12 counties in Southwestern, Southern, Central and Eastern Oregon

  • 587 active savers and 371 graduates

  • 5 asset types

  • 3 funding sources

Evaluation research add up
Evaluation + Research Add Up

  • Who is the program missing?

  • What are participants asking to save for?

  • Where are the gaps in other program funding where the IDA might fit in?

  • What is the success rate of the program?

  • How can the IDA Initiative better reach hard working Oregonians?

Putting it into practice
Putting It Into Practice

  • From evaluation came new legislation

    • New asset types

    • Modified age of eligibility from 18 to 12

    • Opportunities to use innovative products

    • From research comes new opportunities

      • Improved marketing as a result of research

      • Emphasis shift as economy changes

      • Increased focus on financial literacy and saving

Knowledge gems
Knowledge Gems

Program evaluation and research

  • Resonates with policymakers, funders and community members

  • Easily utilized to grow program

  • Assists in connecting with participants’ needs

NeighborWorks Umpqua

Contact Information:

Betty Tamm

[email protected]


Rebekah Barger

[email protected]

Ida practice q a
IDA Practice Q&A

  • Ask a question by typing the question into the text box of the GoToWebinar Control Panel

  • If you experience any technical issues, please email [email protected]


  • Webinar PowerPoint and recording will be available online later this week

  • Follow up email with links to access these materials

  • Comments and feedback on this webinar can be sent to [email protected]