Show Me the Money! $pending Frenzy at Northwest Native Asset-Building Summit

Posted on January 12, 2015 by rblauvelt

First Nations Program Consultant Shawn Spruce, left, assists a participant at the $pending Frenzy

In November 2014, Native community leaders from across the nation gathered at the Northwest Native Asset-Building Summit in Minneapolis, Minnesota. First Nations Development Institute (First Nations) was honored to be a part of the summit and present its “$pending Frenzy” workshop to conference attendees. Sponsored by the U.S. Department of Housing and Urban Development’s Office of Native American Programs and the Red Lake Reservation Housing Authority, the Northwest Native Asset-Building Summit focused on asset-building innovations in Indian Country and strategies for advancing economic opportunity around people and place.

The $pending Frenzy workshop is based on experiential learning principles – the belief that youth learn by doing. Students learn how to use a bank to cash their check, and then are asked to make decisions about buying a car, buying a home, and balancing their wants and needs while budgeting their money. Unexpected emergencies and opportunities are presented to the youth in the form of “Cards of Fate,” which help them learn to plan for unexpected life events. An increasing number of tribes are providing minor’s trust payouts, or “18 Money,” for their youth. In response to demand from tribes who were struggling with how to prepare their youth for this once-in-a-lifetime event, First Nations developed the $pending Frenzy financial education model.

The interactive and dynamic $pending Frenzy was provided to tribal programs from across the country that are working towards incorporating asset-building into their economic development strategies. The $pending Frenzy workshop trained participants on how to conduct their own workshop in their home communities, and then let them go on a frenzy of their own. Participants were provided with play money and then were asked to make a series of budgeting decisions over a two-hour period. The participants had a lot of fun experiencing this interactive event, and several planned to take the program back to their home communities.

First Nations was honored to participate in two other workshops at the Northwest Native Asset-Building Summit, including one on Volunteer Income Tax Assistance programs and one on Children’s Savings Account programs. First Nations thanks the U.S. Department of Housing and Urban Development’s Office of Native American Programs and Red Lake Reservation Housing Authority for inviting us to be a part of this important event.

By Tawny Wilson, First Nations Program Officer

Wigamig’s Big Success Story is Good Example of VITA’s Big Value

Posted on March 19, 2014 by rblauvelt

Last year, there were 145 VITA (Volunteer Income Tax Assistance) sites that served Native American communities, according to the IRS. These sites were sponsored by tribal governments, tribal housing authorities, Native and non-Native nonprofit organizations, senior centers, credit unions, tribal colleges and urban Indian centers. First Nations Development Institute (First Nations) has also supported some of these Native VITA sites with grants, technical assistance and training.

VITA sites are a useful tool for providing free tax preparation services to low- to moderate-income people and helping them claim a range of valuable tax credits, including the Earned Income Tax Credit (EITC). In addition, they can help individuals avoid high fees for tax preparation services and also avoid being persuaded to take on high-cost loans against their tax refunds.

During the 2013 tax season these sites filed a total of 48,413 returns, facilitated $70 million in refunds and helped people claim approximately $26 million in EITCs, which is money that comes back to or stays in Native communities and benefits the entire community. Further, it is estimated that these 145 sites saved Native American filers $7.3 million in preparation fees alone, based on an estimate of $150 in fees per filer.

Data from several of First Nations’ recent Native VITA site grantees revealed the tremendous positive impact these programs can have in Native communities. A report about this can be found on the First Nations Knowledge Center at this link: http://firstnations.org/knowledge-center/financial-education.

Wigamig Executive Director Fern Orie

One of First Nations’ VITA grantees is the Wigamig Owners Loan Fund, Inc. (www.wigamig.org/) in Lac du Flambeau, Wisconsin. It serves the Lac du Flambeau Band of Lake Superior Chippewa along with all Wisconsin Indian reservations. Wigamig offered up this anecdote as just one example of a tremendous success story stemming from its VITA effort:

“We had a client who had gone to a paid preparer for the past couple of years,” said Fern Orie, Wigamig executive director. “By Wigamig preparing the return and asking the appropriate interview questions, we discovered the family has an adult disabled son who they have not been claiming as a dependent on their tax return. In reviewing their previous returns from the paid preparer, we noted that they should file amended returns to claim their son for the prior years and recoup their appropriate refund and tax credits. In review and preparation of these amended returns, we discovered two errors totaling over $2,000. With these corrections and amending the returns, the clients will be receiving nearly $12,000 back from the IRS from two of their amended returns. This does not include a third year of an amended return that Wigamig is still processing. By educating clients, we are increasing their self-sufficiency.”

“VITA programs play an important role in providing affordable, appropriate financial services for Native families. We are proud to support VITA sites and their community partners that continue to bring resources into their local communities,” said Sarah Dewees, senior director of research, policy and asset-building programs at First Nations.

VITA is Vital to Native American Communities

Posted on March 18, 2013 by rblauvelt

Part of First Nations’ mission is to provide financial education for Native American communities so that people can save, invest, prosper, and regain control of their assets. The goal is to help people learn to avoid financial pitfalls such as predatory lending practices that especially prey on American Indian people. As part of this effort, we recently completed a “how to” manual that provides instruction on how Native and rural communities can start a VITA site, or a “Voluntary Income Tax Assistance” program.

The publication is titled Tax Time Savings for Native Communities: Ten Best Practices for Effective Native VITA Programs. In compiling the report, we interviewed five model programs, and then captured lessons learned and best practices. We were supported in this work by the W.K. Kellogg Foundation, the Bill and Melinda Gates Foundation and The Paul G. Allen Family Foundation. The publication can be found in the First Nations Knowledge Center at this link.

Native VITA sites provide free income tax preparation services to tribal members living on reservations and in rural communities. These sites reduce the cost of tax preparation for low-income families and help them avoid expensive products such as high-cost loans against tax refunds. VITA programs also help tax filers access the Earned Income Tax Credit (EITC) and other credits. The EITC is a refundable tax credit for low- and moderate-income individuals and families with children. Unfortunately, millions of EITC dollars go unclaimed each year, especially in Native communities. In 2007, First Nations estimated that in some Native communities as many as 70 percent of qualified tax filers failed to claim valuable EITC refunds.

Most low- to moderate-income individuals have few options available to them as they try to fulfill their legal obligation to file their federal tax returns each year. Many turn to high-cost tax-preparation services that may encourage filers to take out expensive loans against tax refunds. Tax filers who qualify for the EITC use these high-cost tax-preparation services and loans at a higher rate than those who do not qualify, which means that they are more likely to lose a portion of their refund to unscrupulous or overpriced tax preparers. In an attempt to overcome these challenges, we created this report to encourage tribes, tribally-based organizations and other Native leaders to implement VITA sites in their communities and persuade Native tax filers to take advantage of the EITC.

Most rural or reservation-based Native VITA sites, unlike urban VITA sites, face a unique set of challenges. The geographic isolation, low volunteer retention rates, economically distressed communities, and overall distrust of the federal government among many Native Americans can limit the success of traditional VITA site models (models developed by the IRS). In this report, we proposed some best practices designed to address these unique challenges by developing culturally-relevant strategies, structures, and activities for launching and expanding successful VITA sites in Native communities.

First Nations derived these best practices from surveys and in-depth interviews conducted with five successful Native VITA sites last year, including:

Akwesasne Housing Authority

College of Menominee Nation

Lakota Funds, Inc.

Native Community Finance

White Earth Investment Initiative

The lessons and methods learned from these five model programs will be valuable resources for tribes, tribally-based organizations, and others serving Native constituents who are dedicated to improving the economic condition of their communities.

Related to this effort, we also recently awarded grants for innovative VITA programs. The recipients and grant amounts were:

Hawaii First Community Ventures, Kamuela, Hawaii, $15,000

Tlingit-Haida Regional Housing Authority, Juneau, Alaska, $15,000

Native Community Finance, Laguna, New Mexico, $7,500

Wigamig Owners Loan Fund, Inc., Lac du Flambeau, Wisconsin, $7,500

First Nations believes that sharing information and models is an effective yet underutilized tool in Indian Country. We hope the report, and the information shared by these five organizations, will help other tribal leaders learn more about how VITA sites can help empower their communities.

By Sarah Dewees, Senior Director of Research, Policy and Asset-Building Programs