Tax-Time Innovations at Foundation Communities

Foundation Communities, a Texas nonprofit organization that has traditionally focused on housing, is using a new approach to encourage families to take advantage of financial services at tax time. The organization will incorporate tax preparation services into the broader array of services offered at its Community Financial Center.

Foundation Communities has a solid history of providing affordable housing to low-income families in greater Austin and northern Texas. The organization launched the Community Financial Center in January 2010 as a “one-stop shop” or financial hub with access to year-round financial programs. The tax service is viewed as a successful strategy for attracting clients into Foundation Communities’ larger system.

While integrating tax preparation into a larger, complementary package of financial services is noteworthy, the real innovation is in every staff person’s ability to build relationships with his/her tax clients to understand their short- and long-term goals. Last year, trained volunteers prepared more than 18,000 tax forms, which yielded more than $30 million in refunds.

Once staff gain the trust of tax clients, conversations about other money matters begin. For instance, if clients are interested in reducing debt or improving their credit, staff refer them to financial coaches. The coaching program includes up to eight one-on-one sessions. If their clients have college-bound children at home and need assistance applying for college, they refer them to the Cash for College program to learn about grant opportunities and financial aid programs. Clients who are small business owners receive tax advice and other resources to help their businesses succeed. Finally, conversations about saving for the future are ideal times to help clients use their refunds wisely and begin saving in Individual Development Accounts (IDA) for asset purchases.

Foundation Communities’ holistic approach to year-round financial services facilitates savings, access to credit, and debt management; strengthens local businesses; and provides income support for low-income families in one setting. The integration of programs designed to increase financial well being is a win-win for any organization with a mission to expand asset building opportunities for individuals and families. Also, IDA programs that serve as Volunteer Income Tax Assistance sites should leverage Foundation Communities’ model at tax time to increase their clients’ financial well being and increase enrollment. IDA practitioners should also consider leveraging technology to track families and improve service delivery.

This article originally ran in the IDAresources.org Update Newsletter on 01/06/11 and is available for archival purposes.
For updated information on asset building and the AFI program, please see www.IDAresources.org.