In August, the Financial Health Network - an organization leading a cross-sector movement to create a world where everyone can thrive financially, and make financial health a national priority - published Insights From the Financial Solutions Lab Exchange, a report covering the work of grantees from their 2022-2023 Financial Solutions Lab (FSL).
The grant challenge, focused on improving public and private benefits access and navigation nationwide, included emerging or existing nonprofit-fintech partnerships that were working on fintech distribution, nonprofit referral, systems enhancements, or insights and design improvement. With COVID restrictions still mostly in place and its effects felt widely, the program aimed to demonstrate how benefits can provide a crucial financial safety net if there is easier access. Granted every two years since 2017, the Exchange previously focused on partnerships to improve household financial health, improve financial health of workers and students, especially consumers navigating economic crises brought on by COVID, and advance the financial health of justice-involved individuals and families navigating barriers to reentry.
We were excited and proud to participate in such a selective program with the other two innovative collaboratives in the 2022 – 2023 cohort. Our goal for the grant was to improve access to benefits for clients of LISC Houston’s Financial Opportunity Center® (FOC) partners. Combining LISC’s income supports coaching with Benefits Kitchen’s benefits screener tool, our goal was to make the benefits application process easier, information more accessible, and approval more efficient and quicker. Also, reducing duplication and effort overall for applicants and systems would ease the process and time for everyone.
Benefit Kitchen designed a custom LISC-branded interface for the screener and implemented a list of referral resources for coaches’ access and use. Coaches were onboarded at three Houston FOC partners, trained in benefits coaching and using the screener, and tracking client application and approval.
The result was that 1,326 coaching sessions were held, 975 clients screened, 380 clients approved to start receiving benefits, and $2,946 average annual income received from benefits. Considering that millions of dollars are left on the table locally in benefits each year, the project chipped away at some of this available money and ensured that people who needed the support had efficient and expert access to apply and receive.
The FSL truly served as a “lab” for testing and improving fintech and nonprofit partnerships and the solutions they innovated, to serve communities, reduce financial shock, improve financial resilience and meet families’ needs. Being proactive, iterating on solutions, and approaching an issue (unclaimed benefits, families needing support, eviction) with human-centered design and the needs of the user in mind resulted in better partnership, more knowledge leveraged, and expanded reach to families. Cross-sector collaboration can have increased impact, with Fintechs bringing digital tools and solutions, and nonprofits bringing their networks and community trust.
Besides funding and support for our project, another benefit of participating in the cohort was meeting and learning from the other two collaboratives in the cohort.
The Flagstone Initiative and MoCaFi, another collaborative in the group, developed a small-dollar loan and payment option that would serve renters who were living paycheck to paycheck, had little to no savings, weren’t consistently delinquent, were not receiving rent subsidies and had to cut back on necessities to pay rent. The payment option, called rent splitting, allows renters to pay rent in two installments, to better align with paychecks or benefit deposits. Rent splitting eases cash flow issues and improves renters’ financial resiliency. It also includes landlord buy-in to ensure there are no fees or penalties associated with the split payment. The loan option was a no-fee, no-interest $500 loan to ease financial shocks, avoid eviction, and strengthen the renter’s financial position without beginning a spiral into more delinquency or debt.
The third collaborative in the cohort was Nebraska Early Childhood Collaborative and Pie for Providers. The two nonprofits launched a distribution partnership to make Pie for Providers’ software available to childcare businesses in the Nebraska network, with the goal of maximizing Nebraska childcare providers’ subsidy income by automating calculations for the state’s billing process. The support from the Exchange allowed the program to expand to all Nebraska childcare providers. The collaborative made product improvements to deepen impact and aimed to open new government-funded spots in childcare. As well, the partnership enabled policy advocacy by providing anonymized user data for state reports and legislative testimony to advocate for subsidy policy improvements, including enrollment-based reimbursement, expanded family eligibility, and alternative rate setting. The result was that they grew from 52 to 108 childcare businesses served; great from 342 to 687 children served; and eased monthly subsidy billing for many providers.
To read the full report on the project, click here.
For more information contact Ellary Makuch, Program Officer Economic Development at emakuch@lisc.org