toward a Brighter Future Moving Families toward a Brighter Future Presented by: Presented to: Jeffrey E. Faulkner President Social Impact Exchange June 17, 2010

A Challenge For one week Park your car—put your keys away Stop using your bank(s) Avoid shopping at a supermarket Include stops at school and daycare Do your laundry at a laundromat & take your kids! “Aside from the lack of child care, lack of transportation is perhaps the most common problem facing low-income workers trying to get and keep a job.” Progressive Policy Institute 2

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What is Ways to Work? A unique economic empowerment program that helps working poor families: Solidify position in the workforce Build financial literacy and capacity Attain self-sufficiency

The Ways to Work Approach Focused financial education for all applicants household budgeting reviewing/repairing credit report and score “just-in-time” financial education class Low interest, character-based loan with real- world expectations for repayment Case management services maximize success with the loan 5

The Ways to Work Model Franchise-like business model Client work performed by local agencies Program support, management and lending performed by Ways to Work Ways to Work a part of Families International, Inc. All local agencies are (or become) members of the Alliance for Children and Families

The Ways to Work Loans Character-based loans approved via Host agency staff recommendations Local loan committee review Loan values up to $6,000 – flat 8% interest rate Loans carry 24-30 month repayment terms Typical monthly payments of $150 to $220 Borrowers commonly save $750 to $3,000 versus predatory options About Ways to WorK Loans $4,000 maximum, 24-month term Flat 8% interest rate regardless of credit score Maximum monthly payment is $182 Borrowers save $750 to $2200 in interest charges alone, compared to a predatory loan. Note: In 2009 Ways to Work added a $6,000, 30 month loan option Loan Process Loan decisions are “character-based” All applicants must complete financial education requirements: Review credit report, develop family budget Complete three-hour financial education class Community-based loan committee assesses applicant’s ability to repay Counselors refer clients to other economic support programs, education opportunities. 7

Who are Ways to Work Clients? The typical borrower: A single mother, one or more children Employed, meets low-income standards Poor or non-existent credit history Dedicated to improving family economic prospects

Impressive Results (2006 & 2009 Program Evaluations) Borrowers averaged a 41% increase in income 90% reported car helped them maintain or advance in their employment 50% accessed education or job training with the car 85% of (former TANF) clients continued to be self- sufficient after paying off loan Credit scores improved during and after program participation 9

The Ways to Work Network Offices are in multi-service community-based agencies Currently 34 offices in 19 states 18 new / expanded offices in development, 6 new states Originated $5M in new loans to 1,300 families in 2009 Provided ~4,800 financial education experiences in 2009 Current 24-month repayment rate is ~91% 10

The 5-Year Growth Plan Expand scale to 100 sites by end of 2014 Build capacities sufficient to: Provide about 5,000 families with loans each year Deliver nearly 18,000 focused financial education experiences Develop new products and delivery systems to enhance national and local sustainability

Growth Plan Capital Needs   Goal Secured Remaining Capacity Building/Operational Support Grants $ 7.8M $ 3.1M $ 4.7M Growth Fund Grants $ 5.1M $ 2.1M $ 3.0M Loan Capital Grant (CDFI Fund)* $ 1.0M $ 0.0 Debt Capital/PRI $ 22.1M $ 12.5M $ 9.6M Totals $ 36.0M $ 17.7M $ 18.3M *Not required for scaling project until 2013.

Investments Put to Good Use State-of-the-art software infrastructure Renewed and expanded program support materials Expanded and reorganized national office staff Operations Funding Support Services Business Development Poised for rapid growth

Impact During Growth Plan Serve 13,500 families with loans & financial education See household income increase by $130 million for client families Save clients $20.3 million versus predatory lenders Enable 7,750 clients access education or job training Help 10,400 families make sustained improvements in their credit score 14

Making a Difference / Changing Lives Powerful market-based intervention for low- income families Evidence-based program design & outcomes Lasting, meaningful change in economic status & quality of life “Having a car has been a very big help to me, and to the entire family. Ways to Work helped me repair my life—not just my credit.” – Ways to Work Client 15

…helping to reconnect families to the American Dream

toward a Brighter Future Moving Families toward a Brighter Future 17