In 1998, CAP was selected to participate as one of 13 pilot sites for the American Dream Demonstration (ADD), spearheaded by CFED and CSD. In 1999, CAP was chosen to administer the ADD National Study.

Through our IDA program, CAP helped 981 clients accumulate over $1.2 million. The data collected from this program was used to spearhead similar programs in communities across the country, and to advocate for policy changes in our local, state and federal governments.

We also conducted a statewide IDA project (serving TANF recipients only) in collaboration with the Department of Human Services and other Community Action Agencies around the state.

In order to be considered for CAP's IDA program, all applicants had to be generating some form of earned income. Most participants had maximum incomes up to 150% of the federal poverty level. Participants were required to deposit at least $10 each month from their earned income. In addition, once a year, participants were encouraged to make a larger deposit from their Earned Income Tax Credit (EITC) rebate. The program matched participant deposits up to either $500 or $750 per year for 3-4 years (depending on when the participant joined the program). The program offered a match rate that varied from 50 cents to $2 for every $1 saved by the participant.

There were four allowable uses for IDAs:

• Homeownership/Repair  IDAs could be used for down payment and closing costs on a home or for home improvement and repairs. Participants using their IDAs for this purpose were required to attend CAP's homeownership education program.
• Education and Training  IDAs could be used to assist recipients in purchasing the training and skills they needed to improve their employment prospects, such as vocational and technical training or training necessary to obtain a professional certificate or license.
• Micro-enterprise Development  IDAs could help participants create their own jobs through self-employment in micro-enterprises. IDAs could be used as the start-up capital for a new business or for capital equipment purchases to expand an existing business. Participants seeking to use their IDAs for business start-up were required to participate in a micro-enterprise training course.
• Retirement  IDAs could be used to fund an Individual Retirement Account (IRA). IRAs tend to be strong financial investments, contributing greatly to the long-term economic prospects of the account holder. In addition, since the Roth IRA allows withdrawals without penalty for a first-time home purchase, several participants who were not yet viable candidates for homeownership invested in Roth IRAs with the intention of eventually using the money to purchase a home.

IDA accounts were managed through our financial partner, the Bank of Oklahoma (BOk),which held the funds using a special account structure that featured no service charges or minimum opening balance and offered prevailing market interest rates.

In addition to making regular savings deposits, all IDA participants were required to complete a six-session course on money management issues at the beginning of the program. The curriculum covered issues critical to the success of IDA participants, including

• financial goal setting
• tracking spending
• developing and adhering to a spending plan
• avoiding financial pitfalls such as predatory financial institutions
• credit repair
• valuable consumer information

The Problem

Nationally, and in Oklahoma, several factors make it difficult for low-income families to accumulate assets and preserve those assets for the long term. According to the Corporation for Enterprise Development (CFED), moderate and higher income families are better able to accumulate assets because of institutional arrangements (such as matched savings plans offered by employers and savings accounts/IRAs offered by mainstream banks and financial institutions) that promote asset accumulation. In contrast, low-income households have limited access to and familiarity with savings incentive programs. The asset-building and preservation capability of such families is further hampered by players in the ''fringe'' economy, such as check cashers, pawn shops, money transmittal companies, and small loan corporations that charge usurious interest rates to low-income families who have few choices in the mainstream financial market.

The need for asset accumulation and preservation supports is particularly acute in Oklahoma. In 2002, the Asset Development Institute at the Center on Hunger and Poverty at Brandeis University released a state-by-state report assessing the progress of states in promoting economic opportunity and security. Using 39 indicators of asset-based measures of economic well-being, the report found that Oklahoma ranked among the lowest states in 11 indicators and concluded that, compared to those of other states, Oklahoma residents ''have had relatively much less success in gaining job-based and related income assets and less in building human capital and accumulating financial assets."