Who We Are Our mission at CFED is to make it - - PowerPoint PPT Presentation

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Our mission at CFED is to make it possible for millions of people to achieve financial security and contribute to an

• pportunity

economy.

Who We Are

UW-Extension Financial Coaching Strategies Website: http://fyi.uwex.edu/financialcoaching/ Center for Financial Security School of Human Ecology 1300 Linden Drive Madison, WI 53706 cfs@mailplus.wisc.edu http://www.cfs.wisc.edu/

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Inputs Activities Outputs ST Outcomes LT Outcomes Impacts

POLL & DISCUSSION

Check all that apply.

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Speakers

Hallie Lienhardt, Outreach Specialist Center for Financial Security University of Wisconsin-Madison

HO HOW IS IS THE HE FIE FIELD LD TRA RACKING CLI LIENT PROGRESS OR OR SU SUCCESS SS THR HROUGH FIN FINANCIAL IND INDICATORS?

IS IS FIN INANCIAL COACHING EFFECTIV IVE?

WHAT IS ISSUES ARE CIT ITED AS KEY BARRIERS?

FUNDERS: MANAGERS:

• LACK OF DEDICATED

FUNDING FOR COACHING— 45%

• LACK OF INTEREST

OR BUY-IN FROM CLIENTS— 39%

• COMPETING

DEMANDS ON MY TIME— 29%

• LACK OF STANDARDIZATION AND

CLEAR BEST PRACTICES IN THE FIELD— 51%

• IMPLEMENTATION OR PROGRAM

INTEGRATION CHALLENGES— 43%

• LACK OF DATA SUPPORTING

EFFECTIVENESS OF FINANCIAL COACHING— 27%

COACHES:

• LACK OF INTEREST

OR BUY-IN FROM CLIENTS— 52%

• COMPETING DEMANDS

ON MY TIME— 38%

• DIFFICULTY

DOCUMENTING AND TRACKING CLIENT PROGRESS— 32%

WHAT RESOURCES ARE CONSIDERED MOST HELPFUL?

FUNDERS: MANAGERS:

• IN-PERSON

TRAINING OR PROFESSIONAL DEVELOPMENT— 67%

• DIGITAL OR WEB-

BASED TOOLS— 62%

• ONLINE TRAINING

TOOLS— 54%

COACHES:

• DIGITAL OR WEB-

BASED TOOLS— 60%

• IN-PERSON

TRAINING OR PROFESSIONAL DEVELOPMENT— 54%

• OUTCOME

MEASUREMENT GUIDE— 54%

• IN-PERSON TRAINING

OR PROFESSIONAL DEVELOPMENT— 70%

• OUTCOME

MEASUREMENT GUIDE— 70%

• STANDARDIZED

COACHING COMPETENCIES— 59%

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• Inputs

Activities Outcomes What is invested What is done What results What is produced, Who is reached Outputs:

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the number of clients who make a deposit into their savings account at least once a month the total number of clients whose goals include savings

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Measuring Client Outcomes: The Financial Capability Scale (FCS)

Demonstrating Success: Identifying Metrics to Measure Financial Coaching & Counseling Impact

COLLIN O’ROURKE AUGUST 10, 2016

Overview

• Purpose and development of the FCS
• How the FCS fits in housing counseling
• FCS questions and rationale
• Data: Examples and processes
• Other measures
• Financial Well-Being
• Concluding thoughts
• Q+A

Background

• Short set of questions to track client outcomes
• Useful across organizations focused on “financial capability”
• Ability and Opportunity: Knowledge, skills, confidence,

motivation, and access (Sherraden 2010)

• Use in coaching, counseling, education, and other

services

• Complement existing practices
• Interactions with clients
• Organizational processes including data collection
• Generates a score

Question Rationale

Concept Reasoning Budgeting Budgeting and planning signal future orientation about money Goal Confidence Subjective capability to engage in goal-focused financial behavior; another signal of future orientation Emergency Fund Anticipating contingencies signals capacity avoid economic hardships Auto Deposit into Savings Recognizing self-control failures and removing discretion is key to behavior change Spending < Income Signal of paying attention to spending behavior Late Fee (none) Signal of planning and paying attention; direct component of credit score

FCS and Emergency Savings

FCS and Financial Stress

Five steps forward, one step back?

• Administer at every session
• Like blood pressure at doctor’s office
• Can be a “survey” or a conversation starter
• Best to ask questions “fresh” at each visit
• To avoid assuming answers have stayed the same
• Follow-up can be next/last session, or a survey
• Typically very low response rates in post-service surveys
• Ideally FCS goes into same database as other records
• Does not replace case notes etc.

Recommended Process

Tracking Client Progress

• Individual FCS responses provide useful information, but

also produces a 0-8 score for each client

• Combined data tell the story of the organization as a

whole, and avoid “noisiness” within single clients

• Compare data over time
• Baseline vs. follow-up
• Challenges in tracking clients over time
• Follow-up could be last session or a post-service survey

Measurement Moving Forward

• Some measures are better than none
• Don’t let the perfect be the enemy of the good or the

practical

• Balance strategies for collecting data
• Self-reported data and administrative data
• Not about ‘Winners’ and ‘Losers’
• Measures are complements, not substitutes
• Expect constant improvements and refinements

Resources and Contact Information

Online Resources

• Financial Capability Scale in

English and Spanish fyi.uwex.edu/financialcoaching/m easures

• Center for Financial Security’s

Financial Coaching Website fyi.uwex.edu/financialcoaching

• CFPB Financial Well-Being Scale

consumerfinance.gov/data- research/research- reports/financial-well-being-scale Collin O’Rourke cmorourke@wisc.edu cfs.wisc.edu

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How Cities Measure Financial Outcomes: tracking success at the Financial Empowerment Centers

Nicky Grist ngrist@cfefund.org

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Financial Empowerment Centers

Initiated and led by city government as a public service Free, unlimited, 1-to-1, professional counseling based on technical expertise and coaching techniques Open to the public without restriction, focused on people with very low incomes Partner with wide variety of CBOs to reach their clientele Started in NYC (2008) replicated in Denver, Lansing, Nashville, Philadelphia, San Antonio (2013)

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FEC successes

Since inception of FEC initiatives in NYC and five replication cities

• Over 62,000 people counseled
• Savings increased $7.9 million
• Debt reduced over $62 million

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Plan for success: set a high bar

Focus on measurable, self-reported but verifiable outcomes Set targets for each outcome indicator

• Open or transition to safe & affordable

bank account

• Establish credit score (for the unscored)
• Improve credit score by 35 points
• Reduce debt by 10%
• Increase savings by 2% of annualized

monthly income

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Targets are significant (in terms of their potential to positively affect clients’ financial health) and achievable (in terms of the typical timeframe for participation and baseline financial characteristics of clients). Counselors know the metrics up front, interpret clients’ personal goals through outcome lens, and look for

• pportunities to record changes that generate outcomes.

Plan for success: set a high bar

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Success = Improved credit worthiness and access to affordable credit

Increase credit score by at least 35 points

Why? Meaningful and reasonable within likely data collection period What happened? Of FEC clients whose scores increased, 60.3% did so by 35+ points

Move up a FICO category

Why? Leads to documented savings, e.g. $1,104 less mortgage interest over 5 years in 3 states What happened? Of FEC clients whose scores increased, 39.3% moved up 1+ categories

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Increase savings by at least 2% of annualized monthly income

Why? Percentage approach suits program with

• pen eligibility and widely diverse clients

What happened? Of FEC clients whose savings increased, 52% did by 2%+ income

Success = Improved ability to withstand financial shocks

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Evaluation  better tracking

‼Intense data system doesn’t guarantee uniform data

collection and entry, especially in a multi-city, multi- site, large-scale service.

‼Banking indicator represents 12 possible combinations

• f starting and ending banking status.

‼Trade-offs between “more” outcomes (any positive

change) and “meaningful” outcomes (targets and thresholds).

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“I’m in the process of purchasing a home with my fiancé. I’ve been able to sit down with him and coach him and go through his credit report. [Some items] are past the statute of limitations. He didn’t know about the annual credit reports. What we learned we’re able to pass along to other people. I can take it with me and help somebody else. It’s helpful to a lot of people.”

Evaluation tied outcomes to financial capability

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“Participants shared that achieving financial outcomes such as paying down debt or increasing their credit score afforded them a sense of ‘freedom’ from financial stress…. participants experienced a broader sense of self control and calm…. all participants emphatically agreed when one person asserted FEC services ‘give you control over what you’re doing.’”

Evaluation tied outcomes to financial well-being

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Full evaluation report coming this Fall!

Municipal integrations Counseling processes and skills Client profile Outcomes Correlations

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The CFE Fund will be at ALC!

Come to these panels to learn more about municipal FECs, the evaluation, and data tracking!

• Weds. 9/28:

Encouraging the Power of Municipal Leadership in Financial Security

• Weds. 9/28:

Evidence of Effective Solutions: Integrated Financial Empowerment Services Friday 9/30: Data Tracking Challenges and Solutions

Measuring Financial Well-Being:

The CFPB Financial Well-Being Scale

August 10, 2016 Genevieve Melford, Senior Research Analyst, Office of Financial Education

This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance or advice of the Consumer Financial Protection

• Bureau. Any opinions or views stated by the presenter are the presenter’s own

and may not represent the Bureau’s views.

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What is financial well-being?

A state of being wherein a person can fully meet current and

• ngoing financial obligations, can feel secure in their financial

future, and is able to make choices that allow enjoyment of life.

Elements of financial well-being:

 Having control over day-to-day, month-to-month finances  Having the capacity to absorb a financial shock  Being on track to meet financial goals, and  Having the financial freedom to make choices that allow one to enjoy life

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The four elements of financial well-being

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Security Freedom of choice Present Future

Control over your day-to-day, month-to- month finances Capacity to absorb a financial shock On track to meet your financial goals Financial freedom to make choices to enjoy life

A tool to measure financial well-being

Purpose: To allow practitioners and researchers to quantify, and

therefore observe, something that the respondent already has a sense of.

Requirements:

 Based on consumers’ perceptions of financial well-being.  Highly reliable and valid measure of the financial well-being construct.  A rigorous and simple way to measure important but hard-to-quantify subjective factors.  Produces one score that is relevant across adult ages and contexts and comparable across consumers.  Can be used as a common metric across very different types of financial capability programs and interventions.  Free and publicly available.

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State-of-the-art methods used

• Worked with a team of subject matter and scale development

experts to develop questions and scoring method.

• The questions were selected through a state-of-the-art process that

involved:

• The scoring method used for the CFPB Financial Well-Being Scale

is based on an Item Response Theory (IRT) analysis.

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Psycho- metric testing Factor analysis Cognitive interviews Develop initial pool of questions

The CFPB Financial Well-Being Scale

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Questions Response Options How well does this statement describe you or your situation? 1. I could handle a major unexpected expense 2. I am securing my financial future 3. Because of my money situation, I feel like I will never have the things I want in life* 4. I can enjoy life because of the way I’m managing my money 5. I am just getting by financially* 6. I am concerned that the money I have or will save won’t last*  Completely  Very well  Somewhat  Very little  Not at all How often does this statement apply to you? 1. Giving a gift for a wedding, birthday or other occasion would put a strain

• n my finances for the month*

2. I have money left over at the end of the month 3. I am behind with my finances* 4. My finances control my life*  Always  Often  Sometimes  Rarely  Never * Denotes questions for which the response options are “reverse coded”

Financial coaching evaluation

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Urban Institute* randomized control trial of two financial coaching programs:

• Branches, a faith-based social services
• rganization in Miami
• The Financial Clinic, a New York-based

nonprofit helping build the financial security of working-poor Americans

The study:

• Total of 945 clients participated

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479 in treatment group

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466 in control group

*The research described in this report was funded by the Consumer Financial Protection Bureau (CFPB) under a competitive award, contract number CFP-12-Z-00006. The views, findings and conclusions in this report are those of the authors, and do not necessarily reflect those of the Consumer Financial Protection Bureau.

Urban Institute financial coaching research findings

On average, people who were offered access to financial coaching experienced improvements in their financial lives relative to those not offered access to financial coaching:

Financial behavior

• Were more likely to pay bills on time
• Increased frequency of savings deposits

Objective financial outcomes

• Increased savings by almost $1,200 in New York City
• Reduced debt by over $10,000 in Miami
• Increased credit scores by 21 points in New York City

Subjective financial well-being

• Reported an increased sense of confidence in their finances and reduced

feelings of financial stress

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Questions?

Available at www.consumerfinance.gov/ financial-well-being

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Appendix

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Scoring example – Step 1

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Add up the value of a respondent’s answers to all scale questions. This is the “total response value” or raw total.

Scoring example – Step 2

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Speakers