Although Florida has a higher homeownership rate than half the country, the 2014 CFED Scorecard estimates that 49 percent of the state's residents are living in liquid asset poverty.¹ General factors that contribute to the state's poverty rate include a large rural portion of the state with a concentrated population in metropolitan markets that have a high cost of living and many low-wage jobs. This is especially true in South Florida (the region comprised of Miami-Dade, Broward, and Palm Beach counties), which is also one of the country's larger gateway cities through which many immigrants first enter and settle. The diverse population of Miami-Dade, in particular, reflects a variety of social and cultural preferences that have implications for how money management and wealth accumulation is approached. As such, Miami can serve as an interesting region in which to study and address financial education and asset accumulation.

Organizational background
In 2009, the United Way Center for Financial Stability (CFS) was launched as a pilot initiative to provide financial coaching to predominantly low-and moderate-income (LMI) individuals in Miami-Dade County. The center offers a range of services that include personalized financial coaching, credit counseling, tax preparation, and other services. The center established an integrated services approach—including workforce development, financial education, income support, and asset building, among other services—to bolster clients with comprehensive and personalized strategies within a convenient one-stop location. An integrated approach responded to the need for better coordination of financial education and counseling that had long been desired among funders and financial service providers in South Florida.² A collaborative approach allowed the community to leverage resources and focus on moving individuals and families toward individual goals through the collective implementation of programs and strategies.

CFS program features
The move toward coordinating financial stability and asset-building efforts throughout Miami gained momentum when a number of nonprofit, public, private, and regulatory entities came together in 2003 to structure the provision of Volunteer Income Tax Assistance (VITA) and Earned Income Tax Credit (EITC) services to LMI individuals. The effort—led by the Human Services Coalition of Miami (now known as Catalyst Miami) under the Prosperity Campaign—promoted robust discussion of LMI community needs, provider challenges and opportunities, and empowerment of individuals and families. Branches, which was formerly known as South Florida Urban Ministries, was one of the early participants in the Prosperity Campaign and continually expanded and diversified its program in response to the changing financial capacity needs of its client base. When United Way of Miami (UWM) requested proposals to manage the Center for Financial Stability in 2008, Branches rose to the top of the list, given the organization's experience, capacity, leadership, and alignment with CFS's underlying goals.

The Atlanta Fed community and economic development group supported the creation and implementation of the VITA initiative in Miami. The Fed complemented the Miami effort by sharing research on the unbanked population and on best practices in financial education. Later, the Atlanta Fed's Miami Branch convened organizations to assess needs, develop goals and objectives, and learn from best practices throughout the country. Subsequently, the Fed participated in the planning and implementation of the CFS and has supported the initiative over the past five years in a variety of capacities.

The benefits of a well-coordinated and planned strategy to improve financial capability among LMI individuals and families not only promised a more resilient and sustainable South Florida market, but the Fed recognized that it would assist consumers to become better banked, with more access to credit and asset diversification. The 2011 FDIC National Survey of Unbanked and Underbanked Households estimates that 8.2 percent of U.S. households are unbanked. That represents one in 12 households, or nearly 10 million in total. Florida, while having the lowest estimated unbanked or underbanked population in the region, still has approximately 28 percent unbanked and underbanked residents (see the table).³

Four partners provided the initial funding for the CFS: Bank of America, United Way Worldwide, United Way of Miami, and Branches. UWM created an advisory committee to help plan and launch the CFS; the organization has since transitioned to being more of a strategic partner than an operational manager. The implementation plan set out a two-year trial period during which sponsors would provide the majority of funding and direction, and then Branches would incrementally assume the lead in managing and funding the CFS going forward. This plan depended on Branches' staff to manage both the operation of the CFS and the development of its own capacity to take over a great portion of the center's sustainability over the long run. To date, Branches' investments include roughly $1.7 million in site improvements that include new classrooms, offices, and meeting rooms.

Branches and the UWM set two project goals that would help to focus and shape the model strategically. First, all clients would be required to develop a financial plan, even if they were looking for emergency financial assistance. Second, the CFS would target LMI working families that had a financial foundation from which to work. Today over 70 percent of the center's clients are employed.

Lessons learned
Experience has proven that the benefits of financial coaching are maximized when clients are able to take action to change their financial situation, such as changing jobs, increasing their savings goals, or investing in education. Branches had the program capacity and flexibility to tailor a variety of services to best support the needs of clients in addressing their financial conditions and goals. Some of the initial counseling that mitigated foreclosure was responsive to the market conditions during the financial crisis, but that counseling was phased out over time. Likewise, a focus on microenterprise has expanded to provide individuals with income- and wealth-building alternatives.

The pilot plan focused on process versus performance, with the bulk of early planning considering the elements crucial to establishing the center with adequate services, staff, and marketing support to build a client portfolio while gaining the collaborative support of other service providers. According to Vanessa Benavides, program director at UWM, there were no targeted goals or expectations set for the CFS at first. "We were just wondering if this was going to work and what needed to be done to make this concept more viable," she said. Now, Branches and UWM work together to assess performance. They look at program measures such as whether funding is adequate, if outputs and outcomes are moving in the right direction, client response trends, and whether Branches can keep up with demand effectively, including identification and analysis of gaps.

Following the initial venture stage, Branches developed a growth plan with UWM and community partners to outline a second phase that would focus on developing satellite service locations, and a third phase to open a new headquarter location in the south part of the county. Lars Gilberts, CFS director and director of financial stability at Branches, credits the achievements of the CFS thus far to its commitment to partnerships. Gilberts notes that the need for effective partnerships was evident early on, to stretch funding and resources and help the CFS reach out to target individuals throughout the county and build the center's awareness. "We didn't have or want to entice partners with money," Gilberts explains, "but rather wanted to engage them [about 12 partners identified between the UWM and Branches staff] through shared value." To promote the desired engagement, Branches and UWM held a series of individual meetings to lay out the vision of the CFS and get buy-in from targeted partners before the program launched.

Leveraging partnerships to increase effectiveness
Today, according to Gilberts, Branches works with 200 to 250 partners during the year, including 30 organizations engaged in supporting financial services and more than 50 outreach partners directly for the CFS. In addition, Branches and UWM promote and seek to engage hundreds of additional partners in this work through other networks that may not be associated with local operations.

"Branches' goal is to make partners succeed and become more effective," Gilberts said, adding that as relationships have matured, all organizations have experienced mutual benefits. Through working together, the partner network leverages a variety of unique and responsive benefits, including specific presentations, use of space in various locations, and coaching for clients to succeed more quickly or more sustainably. More importantly, the communication and collaboration allow Branches and other programs to identify, respond to, and monitor emerging and ongoing client needs and environmental challenges that directly affect the long-term financial stability of LMI families. 

Still, colocating, bundling, and sequencing services have always been a challenge in an integrated model. Traditional frameworks have a more robust linear process for client service delivery but do not necessarily set out to leverage services strategically to best meet the client's needs over the long term, according to Gilberts. For example, where some nonprofits may be very efficient in processing and meeting food requests, the CFS works with families to lessen their ongoing dependence on food assistance through employment, budgeting, and purchasing strategies. Together, the partner organizations are able to meet the needs of an expanded continuum that increases the broader stability of neighborhoods.

Nathalie Gons of the Office of Financial Empowerment in the New York City Department of Consumer Affairs spoke at the Federal Reserve's Community Development Research Conference in April 2013 on the benefits of coordinating financial counseling and access with working family services, including:

• Embedding account, direct deposit, and financial counseling offers into programs and platforms that already deliver human and social services can be an effective way to scale financial access
• Peer messaging and direct access to experts can engender trust in financial institutions among low-income populations
• Timing the account, direct deposit, and financial counseling offers to coincide with a populations' entry into new, temporary full-time jobs can capitalize on a situation where that population is confronting new financial opportunities and challenges.⁴

A replicable model
Five pillars of financial stability serve as the foundation for the Branches' operation: employment/income, housing, health care, financial management skills, and access to responsible financial services. Helping individuals and families develop and work toward goals in these focus areas helps develop capacity and independence, leading to greater financial stability and success. Coaching encourages clients to develop ownership of their financial goals, decisions, and outcomes. Education is paired with personalized goal setting and objectives that become the guiding plan for individuals to engage in Branches and partner programs and make choices to support their success. CFS clients work with counselors to identify immediate needs and consider long-term benefits of improving their income potential, budgeting skills, and access to financial services. Improving credit scores, increasing savings, reducing debt, increasing workforce skills and employment stability, and working toward investment goals such as entrepreneurship and homeownership are just some of the individual financial capability goals that CFS clients have set.

In its five years of operation, the United Way Center for Financial Stability has provided 421 training classes with 10,664 participants, individual financial counseling to 2,477 individuals, and coaching sessions with 824 individuals. Unduplicated clients number over 11,000. CFS offers a successful model that is now being studied and replicated by other organizations and agencies. The importance of maintaining a broad and deep partner network to expand impact and outcomes—including the development of a robust financial capacity-building environment—has underscored the success of the Branches' model to achieve direct and indirect benefits that are proving sustainable.

In addition to being the subject of studies by NeighborWorks America and the Consumer Financial Protection Bureau (still under way), the CFS is contributing to new product development and services innovation and building the Branches' leadership role in the South Florida community. The CFS has piloted the Citi secured credit card to improve access to banking and credit for underserved clients. Gilberts says that working with clients allows the coaches to guide and monitor consumer decisions to open and use credit in a beneficial manner.

Branches is also an active participant in a microenterprise partnership that more strategically coordinates and leverages small business development resources throughout the county. Another partnership with Wells Fargo is focused on helping Branches scale up its financial coaching by linking it to Spark Point in the San Francisco Bay Area.

Via its relationship with the Atlanta Fed and through participation in national and regional conferences and associations, the CFS has also connected with other intermediaries and organizations that provide information and analysis relative to the Miami efforts, including best practices and contacts with several other banks throughout the Federal Reserve System. In addition to considerable involvement with EITC and VITA outreach throughout their districts, several Federal Reserve Banks have undertaken research and outreach of particular interest to Gilberts and the CFS program. These include the work that the San Francisco Fed has undertaken with the Financial Education Network in San Francisco⁵ and resources available through the St. Louis Fed Center for Household Financial Stability.⁶

Gilberts notes that branding the CFS model and leveraging that recognition to influence policy and programs more broadly is a logical next step for the initiative. "Now that we have a proven process and outcomes to validate our approach," he says, "we want to leverage our partner network to expand financial coaching practices and hone in on the drivers to financial independence."

By Ana Castilla, former Atlanta Fed regional community development manager, Miami Branch

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¹Corporation for Enterprise Development (CFED) Assets & Opportunity Scorecard, 2014, Florida.

²Author's note: Although the Center for Financial Stability began operations in 2009, coinciding with the beginning of the spike in foreclosure activity and the ensuing economic downturn, United Way of Miami began the strategic visioning and planning for the initiative several years earlier and not as a direct response to the financial crisis.

³ FDIC Economicinclusion.gov.

⁴ "Assessing Financial Capability Outcomes: Financial Counseling and Financial Access among Job Training Participants," Nathalie Gons, Office of Financial Empowerment, New York City Department of Consumer Affairs.

⁵Financial Education Network San Francisco, Year One Report  2010.

⁶Center for Household Financial Stability, Federal Reserve Bank of St. Louis.

Additional Federal Reserve Resources

"Basic Financial Coaching Concepts" video, United Way of Fresno County and Federal Reserve Bank of San Francisco, November 2012.

"Financial Education in San Francisco: A Study of Local Practitioners, Service Gaps and Promising Practices." Choi, Laura. Working Paper 2009-08. Federal Reserve Bank of San Francisco, November 2009.

"Weighing the Effects of Financial Education in the Workplace." Edmiston, Kelly D., Mary C. Gillett-Fisher, and Molly McGrath. Working Paper 09-01. Federal Reserve Bank of Kansas City, October 2009.