It was a 344-page book that set Sherry Riva on the path to launching Compass Working Capital, a nonprofit that provides financial services to struggling families, in 2005. “Assets and the Poor,” by Michael Sherraden, argued that poverty is a problem of wealth, not just income, and its message resonated with Riva, who had already logged a decade working with low-income women and their families.
This new way of thinking about poverty became the blueprint for Compass Working Capital. The organization’s mission is to help struggling families build the savings and the skills they need to climb out of poverty. Compass’s programs combine financial education and coaching, with incentives for saving. The asset-based approach works: 60 percent of families in the flagship program have increased their incomes by an average of $11,000 a year, and 81 percent have seen their savings rise to an average of $2,500.
Today, Compass has the distinction of being the first nonprofit to create an asset-building model, for a federal housing initiative known as the Family Self-Sufficiency (FSS) program. Public housing mandates that families pay 30 percent of their income toward rent. FSS, meanwhile, allows — and encourages — those in subsidized housing to put any extra money they make into a savings account rather than upping their rent contributions. Compass’s program combines that savings incentive with financial coaching to help families accumulate wealth and assets.
It’s a model that can help families move out of poverty and build savings, which in turn helps them become homeowners and send their kids to college. “The FSS program has provided us with a really big market to do it,” says Riva. Across the U.S., 5 million families live in subsidized housing. Right now, Compass is sharing its model and experience with partners around the country. “Our hope is to help shape policy,” says Riva, who’s currently completing a Social Impact Fellowship with GLG, a membership-based learning platform, to help grow her company’s reach. Through her work with GLG, Riva has focused on plans for national expansion, positioning her organization for growth, and developing data security infrastructure to support key constituencies.
To read more of Sarah Morgan's article, please click here.
Comments (0)