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Financial Goals – Positioned for Success

Jennifer McClain, Director of Financial Opportunities, LISC Chicago

As we kick off another year, I ask myself and I ask you – Have you done any of the following in the last three months?

For me, this is the list I create in the New Year and work to accomplish by the end of the first quarter. This is also what happens at our Financial Opportunity Centers (FOCs) every day. The FOC staff work with clients in determining their career and financial goals to help position them for success. It does not matter what time of year it is, our FOC doors are open and staff is ready to help anyone who walks through those doors.

For me this work is personal. As a single mother raising two daughters, I understand firsthand the need for these services. Living wage jobs are essential. Knowing how to manage your finances is key. And, feeling confident about your economic future is priceless.

All of this is why LISC invests in helping people tackle all the facets of their financial life—earning a steady pay check, budgeting, understanding and building credit and saving for education and retirement through our 11 FOCs.

Why? Well, take a look at these statistics:

The Racial Wealth Gap: Median Net Worth. Image from Prosperity Now.
The Racial Wealth Gap: Median Net Worth. Image from Prosperity Now.
Liquid Asset Poverty by Race and Ethnicity. Image from Prosperity Now.
Liquid Asset Poverty by Race and Ethnicity. Image from Prosperity Now.

In addition to these stats, on January 29, Prosperity Now released their 2019 Score Card. This is a powerful tool for revealing the financial lives of Americans beyond the headlines. The Scorecard reveals that Americans—especially people of color—remain vulnerable in the face of an economic shock. You can check out the local data here.

The Illinois Asset Building Group weighed in on the results of the scorecard for Illinois in their blog post entitled Racial Disparities Exist Across All Measures of Financial Security in Illinois. As a member of the Steering Committee of this group, I agree with the statement that Illinois has some work to do to improve financial security for all Illinoisans, but particularly for Illinoisans of color. 

Image from Prosperity Now
Image from Prosperity Now

This data is alarming and depressing. But, because of the work that is happening at the FOCs, I know firsthand we are making a difference. 

Since 2005, our Financial Opportunity Centers have placed over 10,900 people in jobs and increased the credit, net income or net worth of more than 10,000 Chicago residents.

This is progress. This gives me hope. But, why the FOCs?

It’s simple. FOCs help families and individuals become more financially secure in three critical areas: employment and/or increased wages; improved financial condition; and, improved access to public benefits. The “Theory of Change” for the FOC Network is that jobs are not enough for a family or individual to become financially stable, but through the integrated services (which is key) of income supports, financial coaching and employment services, clients can get connected to the economic mainstream.

The data backs it up.

Economic Mobility’s evaluation of the FOCs, which was made possible by a grant from the Social Innovation Fund, compared data from five FOCs and five publicly-funded workforce centers in Chicago. Researchers looked at outcomes for FOC clients who had been involved with the program for two years, and contrasted them with a similar group of job seekers who sought services from the city’s workforce centers over a comparable time period. The study entitled First Steps on the Road to Financial Well-Being: Final Report from the Evaluation of LISC’s Financial Opportunity Centers, found that FOC clients are more likely to be employed year-round, reduce non-asset related debt and build positive credit histories than comparison group participants.

These findings offer concrete evidence that our model is successful in helping low-income people achieve financial goals, retain employment and create a brighter future for their families.

That said, we are always open to learning and improving the FOC model. So, in 2015, LISC launched the National Bridges to Career Opportunities (BCO) Initiative to address a key learning gleaned from a decade of operating FOCs: without opportunities for periodic wage increases, career growth and skill-building, families will achieve sufficient income to survive, but not to thrive.

BCO supports community-based organizations to connect neighborhood residents to essential job readiness competencies, skills training and credentialing, and comprehensive supportive services by leveraging existing systems and resources as well as developing new program elements. Unlike traditional, standalone training or education programs, BCO is built on the integrated service delivery platform of the FOCs. The package of core FOC services (workforce services, financial coaching and access to income supports) helps ensure that clients are able to address personal and social barriers throughout their academic and career path. BCO connects unemployed and underemployed residents to the middle-skills job training and credentialing and support services needed to attain and thrive in these positions and mitigate financial and social barriers to their success.

Our results from January 1, 2016-December 31, 2018:

People participated in contextualized bridge training
Of bridge trainees transitioned to occupational skills training
Of occupational skills trainees attained an industry recognized credential
Of occupational skills trainees completed training
Of job placements were in the targeted career pathway
The 2018 average starting wage of trainees was

This work is important and could not be possible without our partners (and of course funders!). They are the ones on the ground working directly with the clients delivering the services. Over the next several weeks to showcase the great work of our FOCs, we will be highlighting each FOC organization that has been implementing the BCO model over the past three years with a video that showcases their work. 

You can watch all of the videos here:

As I take time this quarter to reflect on my personal finances, I have also been thinking a lot about why I do this work. I come to LISC every day because the work that is done at our FOCs impacts individuals and families and supports them in living out the vision that they have for their own lives. The coaches at the centers hold their clients accountable to achieve the goals they create for themselves.

Over the next five years, we hope to continue these positive results for over 6,000 Chicagoans and to help build the capacity of other organizations to integrate much needed one-on-one financial coaching services within workforce development programming. 

So, I reiterate, for me this work is personal and for that reason I continue to push our FOC Network to achieve more. Thank you for your support and partnership and I hope you will continue to follow the work of our FOCs.

Thank you to our funders who support the FOC work: Anonymous, Capital One, Caterpillar, Chicago Department of Family & Support Services, Citi Foundation, Coleman Foundation, Corporation for National and Community Service, Crown Family Philanthropies, Cummins Foundation, JP Morgan Chase Foundation, MetLife Foundation, People's Gas, State Farm, Union Pacific, US Bank, U.S. Department of Labor, ETA, Wells Fargo and W.K. Kellogg Foundation.