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April 21 and 22, 2005 Chicago, IL. 2 Structuring Strategic Alliances Lessons Learned from H&R Block – Community Action Project of Tulsa County An Informed.

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Presentation on theme: "April 21 and 22, 2005 Chicago, IL. 2 Structuring Strategic Alliances Lessons Learned from H&R Block – Community Action Project of Tulsa County An Informed."— Presentation transcript:

1 April 21 and 22, 2005 Chicago, IL

2 2 Structuring Strategic Alliances Lessons Learned from H&R Block – Community Action Project of Tulsa County An Informed Discussion: Achieving Sustainability, Scale, and Impact in Community Development Finance April 21, 2005

3 3 Discussion Outline   Mission and Strategy   Partners   Market Trial   Goals   Capabilities   Early Observations   Next Steps   Partnership Lessons

4 4 Mission Statements CAP: To help individuals and families in economic need achieve self-sufficiency through emergency aid, medical care, housing community development, education and advocacy delivered in an atmosphere of respect HRB: To help our clients achieve their financial objectives by serving as their tax and financial partner

5 5 Partnership Strategic Goals   Leverage existing HRB tax prep infrastructure and CAP social services expertise   Broaden reach of CAP’s benefits screening tool   Increase HRB client satisfaction and retention

6 6 Why Tulsa? H&R Block and CAP existing relationship Proximity of partners Large base of EIC eligible citizens Cooperate vs. compete

7 7 Profile—H&R Block, Inc. Serves more than 20M clients annually Over half of clients served have AGI < $30K More than 11,000 retail outlets, plus digital solutions Prepares 1 in 4 of all EITC returns nationally 80,000 tax professionals

8 8 Profile—CAP   Area’s designated community action agency   Served more than 20,000 clients in 2004   Completed 14,300 free tax returns   worth $19.3M in refunds   Provides high-impact services in:   Childcare and early childhood education   Employment and savings   Affordable housing   Tax Preparation

9 9 Offer benefits eligibility screening as part of the tax preparation process HRB tax prep software identified likely clients Tax professionals offered the screening service Clients screened by “outsourced” CAP benefits eligibility specialists Trial Overview

10 10 The Screening Tool “BESO” = Benefits Eligibility Screening for Oklahomans Rules driven, interactive interview format Determines likely eligibility for approximately 20 social services programs Prepares and electronically transmits application for Food Stamps to DHS

11 11 Complementary Goals Optimize completion of tax returns during limited timeframe Introduce service “embedded” in tax prep process Retain more clients Offer eligibility screening service to as many clients as possible Maximize completion and submission of food stamp applications Serve more clients H&R Block CAP

12 12 Test client acceptance of service offer Test tax professional willingness and ability to deliver offer Determine value to client Assess whether offer yields shareholder value Test scalability with non-profit partner Complementary Objectives H&R Block   Informally compare alternative distribution channels—”free” vs. “fee”   Test deployment of re- branded BESO application in non-CAP site   Test ability to partner with perceived “competitor” and for profit firm CAP

13 13 Significant Reach Scale: Enhance and leverage existing national infrastructure:  Software  Competency in defining business rules  E-file and connectivity  Centralized data analysis Tax Expertise  100 hrs. training before seeing 1 st client Brand Equity Partners’ Comparative Strengths H&R Block   Knowledge: Expertise in eligibility criteria and rules driven application   Relationships: With Department of Human Services and other program administrators   Delivery: Trained benefits specialists CAP

14 14 Clients behaved differently than expected  Offer may have “come out of the blue” Clients strongly preferred phone screenings in practice  Early qual may indicate a face to face preference “Value proposition” needs strengthening  “Provider of relevant information” to “Remove stress and hassle in a dignified manner” More to follow in end of season analytics  Data analysis – demographics of who received and selected offer  Qualitative study of clients and reaction to offer Early Observations

15 15 Next Steps Qualitative Research   Focus Groups   Individual Interviews   Client Experience De-Briefing Session   Quantify “Outputs”   Lessons Learned by Field Participants Evaluate Data   Modify Application?   Modify Trial Parameters?   Go/No Go for Next Phase

16 16 Openness Get past the stereotypes Find Commonalities Acknowledge the differences Key Partnership Concepts

17 17 Commitment Time Resources Accessibility Flexibility Expect the unexpected Make adjustments quickly Agree on broad scope, not specifics—MOU vs. Definitive Agreement Key Partnership Concepts

18 18 Where We Are— Levels of Scale Product In early phase—experiment and replicate To achieve scale Standardization Infrastructure Roll-out

19 19 Thank You Douglas HartungAndrea Hughes H&R BlockCommunity Action Project

20 April 21 and 22, 2005 Chicago, IL

21 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Impact in Community Development Finance

22 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability “New Pathways to Scale…” Aspen Institute (Ratliff/Moy) Great article, interesting models, thoughtful research Download at (Profitwise News & Views – Dec 2004) But.. “Which came first – the chicken or the egg?” (Scale or Sustainability?)

23 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Sustainability must be first and foremost. That’s self-sustainability, too! CDFIs – A subsidized financial institution is a classic oxymoron. The World has changed – accept it! (CRA, Community Credit Unions)

24 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Choose a need that’s sustainable. Size the organization, infrastructure, and products for the need.

25 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Scale is about doing one thing very, very well. Counterintuitive? Economies of scale do exist! Complexity kills! The Hot Dog Cart …

26 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Sustainability (Products) YesNo √Savings/Shares √ Credit Cards √ Checking √Mortgage Loans √Check Cashing, Wires, PMOs

27 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Sustainability (Products) YesNo √Personal Loans √ Auto Loans √ Business Loans √Debit Cards (E-Statements!) Convenience, Phone Access Branches √ √

28 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Immigrant Language Culture Documentation Distrust Can’t fail May not succeed Flexible operating costs “Creative” limitations Latino / SECU Need SECU

29 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability 6 Rules of Sustainability Cheaper Better Quicker Simplify Control the Point of Sale (Quality) Local, Local, Local

30 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Why did SECU partner with Latino Community Credit Union?

31 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Our purpose is to change the world.

32 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability Don’t bet against us …

33 Federal Reserve Bank of Chicago April 2005 Scale and Sustainability For further information: Jim Blaine President State Employees’ Credit Union Ph Fax: Thank You …you’ll lose!!

34 April 21 and 22, 2005 Chicago, IL


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