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An Individual Development Account (IDA) is an asset building tool designed to enable low-income families to save towards a targeted amount usually used for building assets in the form of home ownership, post-secondary education and small business ownership . In principle IDAs work as matched savings accounts that supplement the savings of low-income [[households with matching funds drawn from a variety of private and public sources .

While anti-poverty policy makers have traditionally focused on issues of income and consumption, an expanded vision of poverty alleviation has emerged in recent years - one that encourages savings, investment, and asset accumulation in conjunction with, not instead of, traditional anti-poverty programs. Assets play a vital role in poverty alleviation by providing not only economic security but also a psychological orientation that encourages low income families to save and plan for the future. In his book, Assets and the Poor: A New American Welfare Policy, Michael Sherraden proposed establishing individual savings accounts for the poor calling for the government and the private sector to match individual contributions to IDAs as a means of encouraging savings and breaking the cycle of poverty . Sherraden argued that asset and saving accumulation requires institutional structures and incentives and that asset based development policies can have psychological, social and economic impacts. Since then IDAs have been adopted by United States federal legislation via the The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and in more than 40 states of the country . Evidence of IDA programs also exists outside of the continental United States especially in Hawaii and Sub Saharan Africa .

How IDAs Work

Most IDAs are offered through programs that involve partnerships between local nonprofit organizations, also called IDA program sponsors, and financial institutions. The IDA program sponsor recruits program participants and provides financial literacy classes. Additionally they may also provide counseling and training for efficient saving practices and money management. When recruiting IDA program sponsors need to ensure that participants meet certain criteria regarding:

• Income: Most IDA programs specify a maximum household income level for IDA applicants. Maximum income levels can range from 200% below the poverty line to less than 80% of area median income.

• Earnings: Many IDA programs also require that all or part of savings come from earned income. A paycheck is the most common source of earned income, but welfare, disability, social security, or unemployment checks are also earnings. Money received as a gift is not considered earnings.

• Net Worth: Some IDA programs also look at the household assets (such as a car, home, savings, etc.) in addition to household income when determining IDA eligibility.

• Credit History: Debt from credit cards and loans makes it difficult to save. Too much debt or bad credit history can prevent one from qualifying for an IDA.

The number of eligibility criteria employed varies by the IDA program sponsor and their funding sources. Once recruited, participants open IDA accounts with the partnering financial institution and begin making deposits. Account holders generally make monthly contributions to an account, usually over a period of one to four years, and their savings are matched by donations typically at a rate ranging from 1:1 to 3:1. Match dollars for IDAs come from many different places, such as government agencies, private companies, churches, or local charities. Any individual, organization or business can contribute match dollars to IDAs. In most cases, donors can get a tax deduction for contributions to IDAs, and they are also recognized for helping others in their community. Each month, IDA participants receive a report telling them how much money is accumulating in their IDA, which is a sum of their individual savings, matched dollars and interest. Individual and matching deposits are never co-mingled; all matching dollars are kept in a separate, parallel account. When the IDA account holder has accumulated enough savings and matching funds to purchase the asset and has completed a required financial education course, payments from the IDA are made directly to the asset provider to complete the asset purchase. .

Purpose

IDAs reward the monthly savings of working poor families who are trying to:

• purchase their first home;
• pursue post-secondary education;
• start or expand a small business.

Additionally, some IDA programs allow participants to save for home repairs, computers, automobiles, or retirement.

Purchasing a First Home

Home ownership is generally representative of stability and financial advancement since it is an important means of saving and asset accumulation . In the United States especially home ownership can be a leading step towards attaining the American Dream . By encouraging savings behavior and providing matched funds, IDAs enable participants to overcome the lack of income and liquid wealth needed to make a downpayment or pay housing closing costs. Even if the the savings from an IDA do not result in a full purchase amount, a recent study has shown that households with only $1000 of savings can have a 41% better chance of becoming homeowners than those with no liquid wealth.

Pursuing Post-Secondary Education

Access to post secondary education can positively impact one's economic status as well as critical thinking abilities. For low income families education can provide a route out of poverty and towards social mobility. Savings from IDAs can make the goal of post secondary education attainable. This is specially significant for low-income single mothers for whom earning a post secondary education can break the cycle of inter generational poverty and whose opportunities in gaining such an education might be marginalized by federal legislation like The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 . For such women and several low income communities, IDAs provide a means of investing in a more prosperous future.

Starting Or Expanding Small Businesses

Entrepreneurship is another step towards reducing poverty where IDAs can play a helpful role. Data across states from United States between 2001 and 2007 shows that for approximately 1% increase in the rate of entrepreneurship leads to up to 2% decline in the rate of poverty . Small business start up and expansion has a demonstrated record of success in assisting individuals such as welfare recipients, people with disabilities, immigrants and refugees as well as ex-offenders returning to their families and communities after a term of imprisonment . Matched savings from IDAs can provide the seed capital and/or funding for further expansion for an established business.

Programs

USA Programs

Since it's inception the concept of IDA programs and asset based development has been strong and persistent in the United States. IDA programs in the US differ in funding sources and their targeted population.

Assets for Independence

The Department of Health and Human Services currently funds the majority of IDAs through Assets for Independence (AFI), a competitive grant program administered by the Office of Community Services (OCS). OCS awards grants to nonprofit entities and state, local and Tribal governments that administer AFI projects. Grantees are required to raise an equal contribution of nonfederal funds to match the federal AFI grant. Just in 2012 alone, AFI granted over $13 million USD to over 60 institutions including city councils, nonprofit organizations, universities and other community based organizations .

Project participants receive up to $2,000 in federal matching funds. In order for participants to be considered eligible for an IDA through AFI, participants must be TANF eligible, EITC eligible, or have income at or below 200% of the poverty line. Since the inception of the program in 1999, AFI has enabled more than 60,000 low-income earners save through an AFI IDA.

Office of Refugee Resettlement IDA Program

The Office of Refugee Resettlement’s (ORR) Individual Development Account (IDA) program is designed to assist refugees in purchasing assets as a means of increasing their financial independence, encouraging integration into the American financial system and increasing refugee knowledge of financial and monetary topics. ORR began funding IDA programs in October 1999. ORR invites qualified entities to submit competing grant applications for five-year projects that will establish, support, and manage IDAs for eligible low-income refugee individuals and families.

ORR IDA grantees provide matches of up to $1 for every $1 deposited by a refugee in a savings account. The total match may not exceed $2,000 for individuals or $4,000 for households. Upon enrolling in an IDA program, a refugee commits to and signs a savings plan agreement which specifies the savings goal, the match rate, and the amount the refugee will save each month. Basic financial training is provided by the grantee.

Since 1999, more than 20,000 refugee families have saved through an ORR IDA program. Eighty-one percent (16,588) have used $74.5 million in savings and match to purchase assets valued at more than $351 million. This represents a 748% leverage of match funds. An average of $4,503 was used by each refugee saver to purchase an asset. Over $226 million has been leveraged in loans for refugee asset purchases.

Beginning Farmer and Rancher IDA Program

The Beginning Farmer and Rancher Individual Development Account (BFRIDA) program, authorized in the 2008 Farm Bill, matches the savings of and provides financial education to agricultural entrepreneurs. The objectives of BFRIDA are to promote local economic development in rural communities; increase farming opportunities among individuals who may be new to this country or otherwise lack collateral; and strengthen food security and independence.

BFRIDA allows up to $3,000 of an individual farmer or ranchers’ savings to be matched by local IDA providers at a 1:2 rate. Thus, farmers and ranchers can receive up to $6,000 in match, totaling $9,000 in leveraged savings. Program participants are required to complete financial training programs and develop a savings plan before the funds may be withdrawn for a farming related asset purchase.

The legislation authorizes up to $25 million – or five million a year over a five-year period – for the program. While any tribe, non-profit, or local or state government can submit an application to receive a grant, a 50% local match is needed to obtain the federal grant which may not exceed $250,000. If fully funded, 4,000 agricultural entrepreneurs could receive matched savings over the tenure of the pilot program. Funding is yet to be appropriated. The program is to be administered by USDA’s Farm Services Agency.

State programs

North Carolina has one of the leading statewide networks of IDA programs with 32 local IDA sites in 55 North Carolina counties. These 32 programs provide matching funds and support to more than 500 low-income account holders. There is a four step process when acquiring an IDA, this includes; Introduction and Orientation, Opening Accounts, Economic Literacy and Training, and finally Withdrawal, Purchasing Assets and beyond.

Programs in the Developing World

Although the concept of asset building development has seen greater prominence in the US and the developed world, there is evidence of such programs and their successful impact in developing countries as well. Sub Saharan Africa is one key region where these programs are being experimented with. Like the programs in the US funding for IDA programs in Sub Saharan Africa comes from government agencies, private companies and local charities . IDA's have inspired Children's Development Accounts (CDAs) in this region where poverty and HIV/AIDS leaves several of them orphaned and without resources . Today, a plethora of programs promote microsavings for children and youth throughout the developing world. In Kenya, both the Co-operative Bank and Equity Bank operate child savings accounts. Thailand and Sri Lanka benefit from similar programs offered by public banks and Papa New Guinea is provided access to such programs through microfinance institutions. . Additionally, there is Columbia University’s SUUBI program in Uganda, funded by the National Institute of Health , the Younger Savers Accounts of DFCU bank in Uganda, and the Assets-Africa program funded by the Center for Social Development at Washington University . The fact that these programs have found funding and local support emphasizes the degree to which CDAs and its source of inspiration, IDAs, possess potential as a poverty alleviation tool.

Impact

The first systematic study of IDAs was the American Dream Demonstration (ADD)— a foundation-funded national demonstration of IDAs organized by CFED and the Center for Social Development that ran from 1997 to 2003. This study has thus far yielded two major reports: Saving Performance in the American Dream Demonstration published in 2002 and Evaluation of the American Dream Demonstration published in August 2004 by Abt Associates . Data and evaluation from these reports show positive significant impact on participants' economic, social and psychological well being.

Economic Impact

National research on the impact of IDA programs in the United States has revealed that:

• IDA participants are:
  • 35% more likely to own a home
  • Nearly twice as likely to attend college
  • Are 84% more likely to own a business
• More than half of program graduates who previously received public assistance no longer receive assistance after completing the program
• Prior to enrollment, 90% of IDA savers did not use direct deposit and more than half did not have a savings account
• There is a low incidence of foreclosure among IDA participants

The programs in Sub Saharan Africa also show that asset-building interventions have potential utility as a policy solution for improving the economic well-being of poor households in Sub Saharan Africa. In Uganda, IDA participants had $1,323.01 more in financial assets, $1,672.18 more in total wealth and $2,048.20 more in net worth on average. The average annual cash income of a village household in rural Uganda is approximately $340 per year, so the intervention effect on net worth over a 13-month period would represent the equivalent of over 5 years of cash income. An effect size of this magnitude is likely to positively alter economic well-being and quality of life.

Social

One possible goal of asset building is for residents, businesses, and institutions to become interconnected with each other and the mainstream economy. Having assets such as those made possible by IDA accounts gives an individual more wealth as well as disposable income. The community benefits from the increased spending power among residents, which may attract new businesses or increase home ownership rates . IDAs can also play an important role in fostering social inclusion. In the past few decades, there has been growing concern about the level of marginalization currently experienced by vulnerable groups and about unequal distribution of wealth. The economic stability that assets purchased through IDAs provide can enable the creation and maximization of opportunities for meaningful participation of vulnerable persons in economic, social, and political institutions under conditions that enhance their well-being and capabilities .

Psychological

Studies addressing the relationship between parental assets and children's well-being show positive effects on self-esteem among adolescents in the case of higher parental assets. Scholars have also argued that when people own assets or are engaged in asset-building activities, they internalize the feeling that they have a stake in society, and therefore they cognitively pay greater attention and participate more in economic, civic, and political activities .

Criticisms

While key findings show that IDAs do lead the poor to save or acquire assets, not all indicate that IDAs necessarily increase net worth (assets minus debt). While costs are declining, IDAs can still be expensive to administer and run the risk of being used by the poor as a checking and savings account in addition to a means of accumulating wealth. Furthermore, the restriction that some IDA programs place regarding the use of only earned income towards IDA savings can be a barrier for people with disabilities who face several hindrances in attaining employment .

See also

• Asset-based egalitarianism
• Child Trust Fund
• Poverty
• Poverty Alleviation
• Poverty in the United States
• Center for Social Development
• Asset Management
• Asset-Based Community Development

Peer review for Postcolonial Feminism

This is a very well written article so kudos to you two for such a great job. However, there is always room for improvement so I will be adding to CarolMooreDc's points.

Firstly there are some grammatical errors:

• For instance in the last paragraph of the lead section, the opening sentence reads: "In addition to...because both groups are arguing that feminism does not account for racial differences." I believe it should read "In addition to...because both groups argue that feminism does not account for racial differences" since encyclopedic entries should not be in present continuous tense.

• The 'w' in women need not be capitalized as it has been in some cases.

• Missing 'of' in "This complicates the struggle of these women in terms of fighting patriarchy"

• Inconsistency in the word postcolonial. There are a couple instances of hyphenation, which should be removed since most of the article does not use hyphens.

• Subject verb disagreement in "There are indigenous feminist movement that take place" and "Postcolonial feminism works to bring the voices of Third World women to the forefront and allow their critiques of Western feminism and their own unique feminist models to shape our modern notion of feminism."(Relationship to Western feminism section)

Secondly, some important links are missing that I believe would add to the understanding of this article. For instance, in the history section you should add a link to the first wave of feminism. You can add it right after the section heading but a better idea might be to link the term when you mention it in the history section. Same goes for important relevant terms like postcolonial theory, feminism, gender inequality etc. I would also suggest adding these links in the See Also section.

Talking about terms, I would be very careful with your use of the term Western Feminism. In the section "Relationship to Western Feminism" you seem to be referring to multiple forms of feminism as being western but this isn't clear until one reaches this particular section whereas the use of the term is frequent even before that part. In the former sections the use of the term seems to be referring to one entity/theory, which conflicts with the idea of multiple forms of feminism labeled as 'Western'. I suggest clarifying this term and its most common use in literature early on. If there is a Wikipedia page that talks in detail about the term then you can link it for clarification purposes too. "Third world feminism" is another term to be careful about. The term Third world feminism links back to your page but in the lead section you talk about postcolonial feminism as one of the Third world feminist movements and in the Critiques section you talk about postcolonial feminism and Third world feminism as two separate entities in danger. Please clarify what this term means and whether it should be redirected to this page. I am also confused by some other terminology like "universal sisterhood approach" and "white feminism". Readability of this article will improve significantly once these terms have been clarified.

Once again your efforts are praise worthy and I have tried to be bold in my criticism because I see good article potential here. I hope my feedback helps you achieve that goal (whether it is your goal or not)!

Kjhooda (talk) 22:37, 3 April 2013 (UTC)