Despite a growing economy between 2000 and 2007, the poverty rate in Oregon remained constant. It is now rising, thanks to the recession and a high unemployment rate. Our state suffers from a long-term failure to reduce the poverty rate – the key to assisting not only those living in poverty, but to a healthy economy for every Oregonian.
Each year Federal and state governments provide $500 billion in tax incentives for higher education, home ownership, business and retirement savings. The lion’s share of these tax incentives flow to the top 20% of tax payers, while less that 3% reaches the bottom 3/5 of American families.
Yet, we know from 20 years of rigorously evaluated demonstrations that given the opportunity, low-income and even very poor families will save, learn, work and invest and ultimately, go to college, start businesses, buy homes, save for retirement and craft economic futures for their families and their country.
I suggest that the Meyer Memorial Trust take the bold step of establishing a matching saving program that will address the long-term needs of Oregonians living in poverty. This program would leverage the savings of low wage workers and attract additional funds from individuals, corporations, institutions, and foundations.
The successful Save Together model would serve the state well and has already been tested in Washington and Massachusetts. Bringing this model to Oregon would not only assist individuals and families struggling to get out of poverty, but would increase education levels in the state and make it more attractive for businesses, expand the number of Oregonians able to purchase a home, contribute to financial literacy, and strengthen the economy of the entire state.
Here’s how the Save Together program works:
Low-wage workers committed to becoming financially secure save their own money toward a specified goal, such as higher education, a home, or a small business. Their stories and photos are featured on a website and social media to inspire other people open up economic opportunity for all Americans.
Their savings are matched by everyday people to multiply their savings. Each dollar donated by an individual is matched again with funds from an experienced non-profit partner organization. The partner organizations would be chosen and funded by Meyer Memorial Trust to implement the Save Together model to select, train, and advise the participants. A website and social media are then used to spread the word and create networks of Oregonians willing to help. Donations designated for a specific saver are distributed to the partner organization that is supporting that individual (a 501(c)3 organization to provide a tax deductible contribution) and is deposited into the pool of match funds that is used toward the creation of new matched savings accounts at that organization. Savers are encouraged to become donors once their savings goals are met and they are financially stable.
This unique model of community-enhanced savings and investment strengthens economic and social ties. It builds social capital at the same time that it builds individuals, families, economies, and the state.
For over 20 years, non-profit organizations have offered matched savings programs and proven that when given the opportunity, low-wage workers will work, learn, and save to buy homes, start businesses or pursue higher education. A matched savings program provides secured savings accounts, along with matching incentives and financial education classes, for low-wage workers.
Modest savings can mean life changing opportunities. For my immigrant grandparents, working in factory jobs, their savings meant that they could buy an apartment building and collect rent from tenants – and forgive rent payments for tenants who were out of work. For myself, a savings account meant a college education and access to well-paid work. For others, it may mean having a predictable mortgage payment instead of an unpredictable rental situation, being able to attend community college, start a small business, or repair a car that is key to transportation to a job and livelihood.
Meyer Memorial Trust plays a leadership role in introducing the Save Together program and leverages its role as a leader in the nonprofit community and a catalyst to motivate other foundations and individuals to participate. As a funder, a partner of many of Oregon’s nonprofits, and a facilitator and convener, MMT has a role to play in directing a laser beam on poverty in our state and the life-changing role that even modest savings can make in helping Oregonians out of poverty . Most importantly, a public campaign, social media, and a high profile focus will leverage the ability of Oregonians to assist Oregonians, creating a stronger and more robust economy for every citizen of our state. The poverty rate is measurable. I think this kind of campaign and a $1M investment would go a long way toward helping us identify an achievable, measurable, goal that we can all participate in achieving – lowering the poverty rate in Oregon.