Most people have a sense that United Way helps people – true. Most people know that we raise money and follow strict accountability measures when handling donors’ gifts – also true. What many people do not know are the specific ways in which we invest donor funds to help people build good lives. How do we fulfill our mission “to improve lives by nurturing the collective caring power of our communities”?
For the next three articles, I will outline United Way priorities (self-reliance, health, education). This month, I will focus on self-reliance, of which financial stability is the largest component. The United Way Worldwide goal for 2008-2018 is to “cut in half the number of lower-income families who are financially unstable” (data from “Goals for the Common Good: The United Way Challenge to America”). When we look at the number of lower-income families in the U.S., the percentage of income these families are spending on housing costs, and the amount of savings available for emergencies, we can see areas for improvement.
In 2011, there were over 11 million lower-income families in the U.S., and 38 percent spent more than 40 percent of their income on housing. The vast majority had less than $300 in savings for emergencies. Those situations are tenuous and require plans designed to move people out of poverty and into self-reliance.
United Way supports a three step process toward financial independence. The first step helps families to stabilize finances. This is often referred to as the “safety net” – housing assistance, Medicaid, food banks, soup kitchens, child care assistance, educational aid, legal assistance, Earned Income Tax Credits, job training and more. By connecting people with resources, we help lower-income families to stabilize their finances and reduce debt levels.
The next step is to build savings. This step is critical to help families escape the cycle where one unexpected bill (e.g., a car repair) can cause a snowball effect of additional problems (losing a job, failing to pay the rent, homelessness). We know that when families can work to maintain at least $300 in their bank accounts, they tend to be able to weather unexpected setbacks with much more success.
The third step is helping families to gain and sustain assets. Owning something of value helps to build a secure financial future. Buying a home, investing in a retirement account and purchasing life insurance are some ways that people build assets to protect themselves long term. People who have this stability tend to be more positively engaged with their communities and their children tend to have better educational outcomes.
United Way has partners in La Plata County that promote self-reliance: Alternative Horizons, American Red Cross, Community Connections, Habitat for Humanity of La Plata County, Housing Solutions for the Southwest, La Plata Family Centers Coalition, Southwest Conservation Corps, Volunteers of America, Women’s Resource Center and 2-1-1 phone service.
Of course, money is not everything. Next month, I will focus on United Way’s work in the area of Health. Get involved! Learn more - Unitedway-swco.org.
Lynn Urban is president and CEO of United Way of Southwest Colorado.
