The United Way teamed up with the Jay and Rose Phillips Family Foundation to host this important conversation, which featured a
keynote address from Eric Seleznow of the National Skills Coalition (NSC). As State Policy Director for NSC, Eric was well positioned to describe innovative education and training strategies that are being successfully implemented across the country. Erick Ajax, of the metal forming company, E.J. Ajax and Sons, and Valerie DeFor of HealthForce Minnesota, offered a local perspective on successful industry-driven training programs. READ MORE

Tuesday, January 31, 11:00 a.m.
CFED will release the 2012 Assets & Opportunity Scorecard in a national webinar on Tuesday, January 31. The webinar will highlight key national and state findings, including the latest asset poverty rates and other measures of financial security and opportunity.

Register today to find out how your state fares in helping its residents achieve financial security.

By any measure, poverty in the United States is increasing. In 2011, the country saw the poverty rate rise to 15.1%, the highest level in nearly two decades. However, the official poverty rate released annually by the Census Bureau highlights just one aspect of household finances, namely the percentage of people with insufficient income to cover their day-to-day expenses. It does not account for the resources a family has to meet emergencies or longer-term needs. The Scorecard will offer critical new data on the growing number of Americans who are “asset poor,” meaning they lack the savings or other assets to cover basic expenses for just three months if a layoff or other emergency leads to loss of income. The latest findings will show significant increases in “asset poverty” since the release of the previous Assets & Opportunity Scorecard in 2009.

The webinar will feature three speakers:

• Andrea Levere, President, CFED
• Jennifer Brooks, Director of State & Local Policy, CFED
• Kasey Wiedrich, Senior Program Manager, Applied Research, CFED

About the Scorecard
The Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ financial security today and their opportunities to create a more prosperous future. The Scorecard explores how well residents are faring in the 50 states and the District of Columbia and assesses policies that are helping residents build and protect assets along five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. The 2012 Scorecard assesses states across 100 outcome and policy measures in these five areas to determine the ability of residents to achieve financial security.

Protesting the increasingly unfair advantage of the top 1 percent (arguably,  economic conditions have gotten at least marginally better in recent decades for a somewhat larger 10 percent at the top) underlies much of the new energy around politics and policy these days. And that can be healthy, because the economic decline of the middle class and the working class is the biggest challenge of our times.

But it’s important to stay active and informed on a more constructive front as mainstream Minnesotans try to channel that anger and enthusiasm in 2012.

And one of the best new positive things going in Minnesota, coinciding with the Governor’s Job Summit this fall, is a new campaign called SKILLS@WORK, a joint project led by two major partners, the United Way of the Greater Twin Cities, and the Governor’s Workforce Development Council.

Key facts from the SKILLS@WORK website that you may have heard but need to keep top-of-mind.

• Seventy percent of Minnesota jobs will require some education beyond high school by 2018, yet only 40 percent of working-age adults in Minnesota hold a postsecondary degree. (We at Growth & Justice have been prodding state leaders to first simply set a goal of 75 percent post-secondary attainment by 2020. See our op-ed urging an attainment crusade earlier this month.)
• Nearly two million working-age Minnesotans lack a credential beyond a high school diploma.
• Furthermore, educational attainment levels are expected to decline in coming years – an unprecedented trend.

The alarming facts surrounding an educational equity gap for kids of color, which is grossly unfair to our fastest growing demographic groups, is a major factor for that last bullet. One of the better comprehensive formulas for improving that picture is contained in the document “All Hands on Deck,” which actually was produced by the Governor’s Workforce Development Council, under the previous administration and has strong input from the corporate and business world. The GWDC, in my opinion, is one of the most farsighted state agencies you’ve maybe never heard of.
Plug in to it.

Dane Smith, Contributor
President, Growth & Justice

The Pathways Back to Work Fund, modeled on part of President Obama’s American Jobs Act, would create work and learning opportunities for unemployed individuals, those who have exhausted unemployment insurance benefits and those who do not have sufficient work experience or earnings to qualify for unemployment insurance in the first place.

The bill establishes:

• $2 billion for subsidized employment programs patterned on the successful Temporary Assistance for Needy Families (TANF) Emergency Fund that created 260,000 jobs in 2009 and 2010. Governors would have the option of administering the program through TANF agencies or local workforce boards under the Workforce Investment Act or a combination of the two.

• $1.5 billion for summer and year-round employment opportunities for disadvantaged youth. A similar round of funding provided in 2009 led to paid work experience and training for up to 360,000 young people. The bill would encourage local workforce boards to create employment opportunities in emerging or in-demand occupations and to provide year-round youth participants with education and training leading to industry-recognized credentials.

• A $1.5 billion competitive grant program for promising and research-based work and learning opportunities that help low-skilled adults and youth obtain jobs and credentials. This funding could be used for on-the-job training and apprenticeships; sector-based training programs; direct work experience, along with supportive services; or adult basic education or integrated education and training models that help students learn basic skills and earn post-secondary credentials.
  
  Learn more about the Pathways Back to Work Fund >> Learn about the broader American Jobs Act, which includes the Pathways Back to Work Fund >>

The assumption that lies in the phrase welfare-to-work is that parents who turn to cash assistance are on the margins of our society and that they need to be coaxed, required, or encouraged to work.  But data commissioned by the Affirmative Options Coalition from the Minnesota Department of Employment and Economic Development indicates that the vast majority of parents turning to cash assistance in Minnesota have already been in Minnesota’s labor market.  Many appear to be using cash assistance as their alternative to unemployment insurance.  In fact only about half of Minnesota’s unemployed workers have access to unemployment insurance – and before the recession, only 40% of the state’s unemployed workers received Unemployment Insurance benefits.   Rather than needing to convince people to work, the more useful questions for welfare policy might be to understand better what is leading to the job loss and what assistance helps the worker reconnect most quickly to a new job.

As government finances grow increasingly strained and foundation endowments struggle just to regain the levels they were at years ago, many who care about our growing societal needs are exploring innovative ways to bring new capital to the table – with a particular interest in tapping the private investor market. Two models currently lead the discussion:

Social Impact Bonds (SIBs)

First launched in the UK and now being explored in the U.S. by both the Nonprofit Finance Fund and Social Finance US, the SIB concept is predicated on the fact that it is far more costly to deal with problems after they grow big than it is to take preemptive action. For example, a program that is effective in keeping at-risk youth from dropping out of high school may decrease costs to the criminal justice system, reduce lifetime use of public benefits, and increase lifetime earnings (and thus lifetime tax payments). The money required to run the program, then, should really be viewed as an investment that “pays off” in very quantifiable terms.

Although few would dispute that basic math, there is somehow just never enough upfront cash available to scale these programs up to reach all those who could benefit. This is where SIBs come in. What if private investors were willing to provide the operating cash to high-performing nonprofits that create significant social impact and thus save government loads of money? Would government then be willing to share some of the total cost savings created from investors’ money?

In the SIB model, investors engage in due diligence, invest their money through an intermediary who then passes that cash along to the investor’s chosen nonprofit, and then wait. If an independent evaluator determines that these organizations have achieved what they promised (i.e. reduced the recidivism rate, placed and maintained hard-to-employ persons in jobs, ensured that at-risk children were kindergarten-ready, etc), government repays the investors their principle plus interest from the cost savings that have been realized. If the nonprofits they invest in do not hit their goals, however, the investors lose their money. Thus, nonprofit gains cash flow and government saves money over the long-term, but it carries zero risk if the interventions funded by this new investor money do not prove fruitful.

Human Capital Performance Bonds (HUCAPs)

Here in Minnesota, HUCAPs – a tool with a similar goal but substantially different structure – will be tested through a $10 million pilot program. The main distinctions include:

First, it is truly a bond. The SIBs described above are really equity investments where an investor’s capital is at risk. Consequently, rates of return can run as high as 14%. Not the case with HUCAPs. Instead, investors are essentially guaranteed their money back and the rate of return is expected to be around 4%. The anticipated upside of this model is that a lower required rate of return means more organizations will be able to demonstrate economic value that beats that rate and thus allows them to compete for these new funds.

Second, the payment timeline is different. In the SIB model, organizations receive the cash upfront and must hit pre-determined benchmarks in order for investors to get their money back. With HUCAPs, nonprofits carry most of the risk and are only paid if and when they achieve their goal. They may need to secure PRIs or patient capital to meet their interim cash flow needs, though discussion is currently underway about the possibility of creating a forgivable loan fund to bridge the cash flow gap.

Third, the incentives are different. SIBs depend on investors engaging in a due diligence process to evaluate the likely effectiveness of particular social interventions. The model thus uses investors to create the market forces that purportedly will enhance the efficiency of resource flows. The human capital performance bond proposal, in contrast, does not give investors that role. An intermediary (currently in development) would fill this gap.

Intrigued? Want to learn more? Bring your questions and opinions to “Bonding Your Impact: How Human Capital Performance Bonds Could Affect the Nonprofit Sector” at MCN’s Annual Conference.

Adapted in part from a blog post that first appeared on socialfinance.ca in May 2011

Colleen Ebinger, Contributor
President, Ebinger Consulting Group and
Executive Director, Social Enterprise Alliance – Twin Cities

Reposted from Minnesota Budget Bites

Two new reports from a national think tank look at financial security and opportunity in Minnesota, and find that Minnesota as a whole does better than the national averages, but worse than national averages when it comes to communities of color. Unfortunately, the story of Minnesota’s deep racial disparities is a familiar one – one you’ve heard from us most recently in our blog on census data on incomes and poverty.

CFED, the Corporation for Enterprise Development, is a leading national think tank on asset development and economic opportunity. Its work is built on the idea that income is necessary for families to get by, but assets are crucial for families to get ahead. CFED finds that 25.9 percent of households nationwide are in “asset poverty,” meaning they do not have enough savings or wealth to meet their basic needs in the event of job loss or other emergency.

CFED’s new Assets & Opportunity Profiles for Minneapolis and Hennepin County and St. Paul and Ramsey County find that Minnesota does better than the national average, but the figures for Minnesota’s communities of color are shocking, and are worse than the national figures. While 20.7 percent of all Minnesota households are asset poor, 58.5 percent of black Minnesotans, 42.0 percent of Latino Minnesotans, 21.7 percent of Asian Minnesotans and 43.3 percent of Native Americans in Minnesota are asset poor. Minnesota’s communities of color are also less likely to access higher education and own their homes.

While low-income households are more likely to be asset poor, the issue goes well up the income scale. Nearly one-quarter of households with incomes of $37,741 to $59,604 live in asset poverty. When families are asset poor, they have fewer opportunities to move up financially through education, home ownership, or entrepreneurship, and are less able to provide the stable environment that supports their children’s education. Lack of family economic security is a threat to the economic vitality of our communities and state.

I had the opportunity to learn more about these reports at a forum held Tuesday by CFED in partnership with Northwest Area Foundation, Legal Services Advocacy Project and the Greater Twin Cities United Way. In addition to providing analysis of assets and opportunity in our area, CFED and other participants talked about policies that can support Minnesota families to learn, earn, save, invest and protect. Minnesota has done well in some of these policies, including a strong state Earned Income Tax Credit and partnerships that promote its use and connections to free tax preparation, financial education and access to mainstream banking services.

Public policies play a role in determining who has the opportunity to build assets, as do employers, financial products, incentives and education. However, CFED finds that our nation’s approach to asset building is “upside down” because it provides the greatest support for asset building to those with the highest incomes, primarily through the tax code. In FY 2009, the federal government provided an average of $95,820 to support asset building by households with incomes over $1 million, yet only provided an average of $4 for asset building to households with incomes of $10,000 to $15,000.

As we’ve seen in our analysis of this year’s budget outcomes, this is an area where the state has reduced its investment. For example, state funding was eliminated for Family Assets for Independence in Minnesota (FAIM). Low-income participants in FAIM get their own savings matched with state and federal funds to help obtain post-secondary education, purchase a home, or start a new business. The loss of nearly $500,000 in state funds in FY 2012-13 will likely mean the loss of a matching grant from the federal government.

The participation in Tuesday’s forum of elected officials at the city, county and state levels, and other community partners, is a good sign. But we can – and must – do better. In order for our region and our state to be economically competitive in the future, all Minnesotans must have the opportunity to gain the education and economic stability that enables them to thrive and make their greatest contribution in the workforce.

-Nan Madden

For More Information:
Press Release
Assets & Opportunity Profile: Minneapolis
Assets & Opportunity Profile: Saint Paul
Assets and Opportunities in the Twin Cities and Across Minnesota Presentation

Pell Grants are a lifeline for millions of low-income traditional and nontraditional adult students to postsecondary education and credentials and family-supporting jobs. But, these grants are under unprecedented threat in the current budget negotiations in Washington, D.C. Several dozen organizations – including the Center for Law and Social Policy, the Education Trust, The Institute for College Access and Success, Young Invincibles, and PIRG – have joined in a coalition to advocate against cuts to the maximum grant as well as harmful changes in eligibility that would cut off hundreds of thousands of students.

Potential cuts include rolling back certain recent expansions in the needs analysis formula to help low-income working students’ access aid, redefining full-time for Pell from 12 credit hours to 15, cutting out less-than-half-time students and students in remedial education, among other proposals. These cuts will have a disproportionate effect on the disadvantaged students in innovative workforce programs for lower-skilled adult students. If you are concerned about these threats to the Pell Grant program, please join this campaign. Visit http://www.savepell.org/ to learn more and get engaged. Importantly, if you know of any students for whom the Pell Grant is or has made a difference in their lives, please ask them to share their stories (and a photo) to savepell@gmail.com.

This is very important in Minnesota because Senator Franken is emerging as a leader to save Pell and needs your stories and support.  If you have questions, please do not hesitate to contact Vickie Choitz at vchoitz@clasp.org.

Guest Blogger, Vickie Choitz,
Senior Policy Analyst, Workforce Development

Just seven years from now, 70 percent of Minnesota jobs will require education beyond high school.  Yet today, only 40 percent of working-age adults in Minnesota have a postsecondary degree.  As this skills gap grows, more and more businesses are saying they can’t find the skills they need to fill the jobs they have open.  An estimated 4 million Americans could go back to work with the right training, reducing unemployment rates by an estimated 2.5 percentage points.

Closing the skills gap can help improve Minnesota’s jobs situation, but it is also crucial to our long term economic growth and prosperity.  Our growing skills gap limits opportunities for businesses and individuals.  Minnesota must take steps today to make sure that we meet the call of tomorrow’s economy.

Learn more: Take an online tour of Minnesota’s growing skills gap.

 

Greater Twin Cities United Way is announcing a funding opportunity to address the United Way goal area of Jobs and Training that supports the Basic Needs Impact Area.  Click here for preliminary funding guidelines.  

RFP training is scheduled for the following dates and times; attendance is mandatory if you wish to submit an RFP application:  

Tuesday May 10, 2011 from 2:00 - 3:30pm OR 
Thursday May 12, 2011 from 9:00 – 10:30 am 
International Institute of Minnesota
1694 Como Avenue
St. Paul, MN 55108

Please RSVP for one of these dates/times by clicking here and indicating the contact information for those attending and which session they plan to attend by May 6, 2011.  The RFP application will be due electronically to United Way on June 17, 2011 by 12:00-Noon.

If you have any questions in regards to the funding opportunity, please contact Brian Paulson, Community Impact Manager at 612-340-7601.