Teaching Financial Literacy at the Instituto del Progreso Latino
Social Innovation Fund
On Chicago's southwest side, the three predominantly Latino neighborhoods where Instituto del Progreso Latino works suffer from low incomes, low education levels, and rates of unemployment as high as 15%.
The nonprofit Instituto has provided education, training and employment services to working families in Chicago for over thirty years. But in 2006, its leaders realized that jobs were really only the beginning. To lift families out of poverty in a way that was sustainable and caused systemic change, they would need to do more.
So, Instituto began incorporating innovative services for financial coaching and income support counseling into its programs and transformed themselves from a simple jobs center to something they call a “Financial Opportunity Center” (FOC).
Since then, Instituto has made significant impact in its communities. In a one-year period ending in 2010, over 400 clients came to its FOC to receive financial coaching services. During that same period, over a third of Instituto's clients increased their net income, many through new jobs.
Instituto's financial coaches also enabled more than a quarter of these clients to increase their credit scores by teaching them credit building strategies and financial management skills. By accumulating good credit clients increase their chances of accessing safe and affordable housing, being considered for certain jobs, and avoiding prohibitively high interest rates when taking out loans for home or car purchases.
With the receipt of a SIF subgrant from the Local Initiatives Support Coalition, Instituto is now setting more ambitious goals for the year 2011. The organization plans to assist at least 175 clients to get jobs and help more than half of these maintain steady employment for six months or longer; help 115 clients increase their credit scores; ensure 175 clients increase their net income; and help 100 clients increase their net worth by assisting them to gradually build assets and reduce debt.
In addition to helping increase the number of clients it serves, the SIF grant has also enabled Instituto's FOC to expand the depth of services it offers. For example, Mujer Avanzando -- a comprehensive subprogram at the Center -- helps working women advance in their careers by offering leadership training and removing obstacles to work such as childcare.
When they added financial coaching through the FOC to their program services, they became more able to effectively prepare women for jobs and career advancement. The women are now improving their credit and developing monthly cash flow.The SIF grant is also enabling Instituto to leverage its relationships and form new partnerships in the community. Instituto has partnered with the North Side Community Federal Credit Union, a well-respected Chicago credit union, to extend credit union membership to Instituto's FOC clients. The partnership will also connect these clients to credit builder loans, CDs, and savings accounts that will help them develop the financial foundations necessary for economic self-reliance.