Financial well-being is multi-faceted with mutually-reinforcing components: sound personal money management; access to fairly-priced financial services and products; opportunities to acquire assets and build wealth; and quality employment that offers stable wages and growth potential. Over 10 years ago, the Local Initiatives Support Corporation (LISC) and many of our peers in community development recognized the consensus emerging from practitioners and residents in the neighborhoods where LISC works: A job alone is not enough. Financial literacy is not enough. Opening a checking or savings account, homebuyer education, job interview and resume preparation workshops—as important as these individual interventions may be, when delivered as “standalone” services, none are enough to propel unemployed and underemployed neighborhood residents into the middle class. An “integrated” service approach is needed to address the interrelated economic needs of individuals and families. It is equally important to invest in a capacity building, staff development, and performance management infrastructure to ensure high-quality delivery of professional financial coaching that is reinforced by robust employment and income supports services, all working in tandem to promote families’ forward movement to financial stability.

 

That is why LISC has spent the past decade deploying and scaling up the Financial Opportunity Center (FOC) model in cities across the United States. Financial Opportunity Centers—which operate out of existing, trusted local nonprofits with long track records of providing human and social services in their communities—offer workforce development, financial coaching and benefits access services as a comprehensive package. This integrated approach is key to LISC’s neighborhood revitalization strategy: in order for historically underinvested neighborhoods to flourish, the people living in those neighborhoods need opportunities to thrive as well.

 

LISC’s approach to integrated services is based on the Center for Working Families (CWF) model developed by the Annie E. Casey Foundation. We piloted the integrated services approach in partnership with several Chicago nonprofits in 2005, and the lessons learned from those early years of supporting integrated services coalesced into the key components of LISC’s FOC model—which is now operating in over 75 community-based organizations around the country.

 

LISC invests heavily in capacity building support for the FOC staff—both frontline staff and management—in order to ensure the delivery of professional and effective services. Through one-on-one employment services, combined with financial coaching and income supports access, FOCs seek to improve the financial well-being of low income individuals—and the coaching approach is infused throughout the FOC model. Coaching embodies the culture of the centers, and sessions are client-driven to motivate and engage individuals. Because coaching is distinct from the case management approach traditionally used in social services, coaching training is an integral part of the start-up and ongoing capacity building for FOCs.

 

The field of nonprofit-based financial coaching is still relatively new and professional standards are still in development. Nonetheless, LISC has identified several high-quality providers of financial coaching training, and as part of launching the FOC model, financial coaches must attend an in-person coaching training that is specifically focused around financial coaching. LISC also strongly encourages all FOC staff, including the employment coaches and program managers/directors—as well as LISC staff working with the FOCs—to go through financial coaching training, because substantive understanding of the coaching approach has been crucial to the FOC model’s success. To augment the financial coaching training with professional development around specific financial and employment topics, LISC also provides the FOCs with training and assessments on credit building, and periodic webinars led by experts in the field.

 

Data is another critical component of the FOC model—and a mechanism to ensure the quality and professionalism of coaching services. FOC services are free to community residents, so unlike in the for-profit sector, LISC and the Centers cannot look to measures like revenue to assess customer satisfaction and effectiveness of services. Instead, at an FOC one of the strongest indicators of the quality of services shows up in client retention, and outcomes achieved by clients. All of the organizations in LISC’s national FOC network use a common data system and template customized to capture family financial stability measures, and LISC reviews FOC data at the national and local level at least each month. Because there are few universal baseline qualifications for what makes a strong or professional financial coach-- with over 100 financial coaches in our FOC network, LISC has seen strong coaches with financial services backgrounds as well as highly successful coaches with social service backgrounds—we rely on a “frequency of contact” metric to assess whether the coach has strong rapport with the customers they are serving. LISC has found that training and professional certification by themselves do not always guarantee quality; the coach’s ability to listen, relate, and build trust with clients is as important if not more so than technical knowledge. Furthermore, a client’s ability to achieve outcomes such as long term job retention or job advancement indicate duration of the relationship.

 

LISC created a performance management report and trains both FOC managers and frontline staff to use the report to inform their service delivery processes. By focusing on bundling of service rates, and the rate at which follow-up financial assessments are completed, staff can regularly assess how well financial coaching is integrated into the organization’s services. They can also determine the efficiency of following up with clients. Client retention is one of the most challenging aspects of social services, necessary to achieve long term change for individuals, and necessary to verify change or new data for an individual.

 

Finally, in addition to the monthly data analyses, LISC engages in robust research and evaluation efforts to assess the impact of bundled or integrated services and refine core components of the FOC model. An analysis conducted by LISC’s in-house Research and Assessment department compared FOC clients who received bundled services and the outcomes they achieved with those clients who did not receive the full bundle. As part of the Social Innovation Fund grant that LISC received in 2010 to support FOC expansion, third-party evaluation firm Economic Mobility conducted a quasi-experimental design study comparing the outcomes of FOC clients with those who received services from the public workforce one-stop center; and to help better understand the qualitative experiences of FOC clients and the impact of services on their lives, a University of Chicago researcher is conducting a three-year series of ethnographic interviews with 12 FOC clients in Chicago.

 

Conclusion

Financial Opportunity Centers serve a population that faces substantial barriers to financial prosperity: chronic unemployment, basic skills and education gaps, and isolation from resources like mainstream financial institutions and fairly-priced financial products. LISC has seen the importance of implementing a strong integrated service delivery model that is adaptable to local nonprofits and their communities’ needs, but is built around the core components of coaching, initial capacity building and ongoing professional development for staff, and use of data and common performance measures to assess effectiveness and drive continuous program improvement. Our FOC network data as well as findings from the research efforts cited above show that FOC participants receiving integrated services work more consistently, have stronger credit outcomes, and lower levels of debt. LISC’s integrated service work has shown the power of incorporating employment services into asset building and financial coaching programs. At the same time, the FOC model’s results also bolster the credibility and professionalization of the financial coaching field by demonstrating to workforce providers—in community-based nonprofits, community colleges, and the public workforce system alike—that financial coaching, when delivered effectively, strengthens employment outcomes, which then in turn can strengthen real economic opportunities.