The asset building initiatives implemented in Canada hold many interesting findings and lessons. These lessons have particular relevance for the United States, given the similarities in culture and policy priorities between the two nations. For instance, with today’s housing crisis, we need to explore more options for helping low-income families secure permanent housing as was demonstrated in the Canadian Independent Living Accounts program; we also need to provide low-income families with better access to higher education which could increase their earnings potential, as demonstrated in the Canadian learn$ave program.
Highlights of Findings from the Canadian learn$ave IDA Program
The learn$ave demonstration was implemented in 10 sites across Canada between 2001 and 2008. Participants had 4 years to accumulate savings and make a matched withdrawal for expenses related to higher education or starting a new business. At only three sites, reearchers randomly enrolled 3,584 participants into one of the treatment groups, with a third group as a control. The first treatment group received access to an IDA; the second treatment group received access to an IDA, financial education, and case management services; and the third group, the control group, did not have access to either an IDA or related services. Researchers followed up with the participants at 18, 40, and 54 months after they enrolled.
- More than 80 percent of the participants in the treatment groups saved and qualified for matching funds.
- Approximately half of the participants in the treatment groups saved the maximum amount matched ($1,500).
- Participants in the two treatment groups were more likely to budget and set financial goals.
- Treatment group members were more likely to enroll in education programs leading to a degree. This effect was strongest for the lowest-income participants.
- The enhanced services (financial education and case management) provided to the second treatment group did not have a significant impact on participant savings and education outcomes.
- Characteristics associated with the program’s more successful savers include having clear long-term goals, a strong future orientation, a rational approach to saving, and being willing to make personal sacrifices to achieve goals.
Highlights of Findings from the Canadian Independent Living Accounts Program
The Independent Living Accounts (ILA) program was a 1-year program implemented in 2005. It tested the effects of IDAs for helping households that were at risk of becoming homeless to move into mainstream rental housing. Implemented in three Canadian cities, the program provided matched savings, financial education, and case management to about 150 individuals living in transitional housing or at risk of losing their current rental housing. Savings could be used for housing expenses such as damage deposits, first and last month's rent, utility hook-up charges, and moving expenses.
- 76 percent of the participants opened an account and saved at least $10.
- Participants saved an average of $38 a month, and $270 a year.
- 43 percent of the participants saved the maximum amount that would be matched.
- 44 percent of the participants used their matching funds to move into secure rental housing.
- The support and dedication of front-line agency staff was identified by participants as a key element of their success in the program.
The ILA model continues to be used at eight homeless shelters in Toronto. Administrators are exploring the possibility of expanding supports provided to these families to include employment support, as well as outreach to vulnerable groups such as former incarcerated individuals.
Local administrators of both Canadian IDA programs experienced similar challenges to those faced by AFI grantees in the United States. Many of the effective practices that have been identified by AFI are validated by the research on the Canadian projects. For example, one recommendation from the Canadian studies is that it is important to invest in the professional relationship between program staff and participants, as trust and confidence in staff are shown to increase participants’ program involvement and success. Another recommendation is that integrating the IDA project into the organization’s existing services helps to leverage recruitment and partnership potential by capitalizing on the organization’s reputation. The reports on these Canadian programs include several important recommendations and highlights of effective practices that are helpful for AFI grantees.
For more information on asset building initiatives in Canada and what the U.S. asset building field can learn from the Canadian experience (including links to the final reports for the learn$ave and ILA demonstrations), visit the Research about AFI and Asset Building section of IDAresources.org.
This article originally ran in the IDAresources.org Update Newsletter on 05/26/11 and is available for archival purposes.
For updated information on asset building and the AFI program, please see www.IDAresources.org.