IDAs in Shelters
Individual Development Accounts are tools used to accelerate the savings of low income individuals. The expectation is that these IDAs are used to help those individuals currently residing in shelters to exit more expeditiously to permanent housing. Through the expedient of matched deposits, clients contribute a contracted amount into a depository institution for a specified length of time. At the termination of the contracted period or when the agreed-to maximum match amount has been reached the monies are withdrawn using a two-party check. These monies are used exclusively for the purpose of moving from shelter to housing in the community. Further, financial literacy classes are a requisite component of the program. Extant case managers can also make referrals to credit counselling and other pertinent resources.
As an example, in Toronto, Canada the independent Living Accounts program are used in shelters. The match rate varied from $1:$2 to $1:$3. Of the sample of 129 participants, 78% completed the 6 month minimum savings period, 57 completed the program. Clients deposited a total of $33,139. The total match monies added was $78.937. 44% of the participants met or exceeded the maximum matched amount of $400 per person. Thus over a period of 8 months (the maximum time surveyed), a total of $112,076 was accumulated and available for clients. Excluding the 72 participants that did not complete the designated savings period, this averages to $1,149.95 per successful participant. (Data was derived from: Building Foundations for Canadians in Transition, Final Report, published by SEDI in 2006.)
By replicating and modifying the experiences of IDA programs and the information available from varied technical assistance providers, service, providers, extant IDA programs, etc. an IDA program can be created in New York City to similarly help move residents currently in shelter to housing in the community. In addition, the concomitant financial literacy classes and habits of savings engenders information and habits that shall positively affect the life chances of the participants