History of Workplace Financial Education Initiative

In 2005, staff from the Federal Reserve Bank of Kansas City (FRB), Omaha Branch and United Way of the Midlands

(UWM) worked together to design an effective financial education initiative that could be delivered in the workplace. Based on research on program effectiveness, the initiative was designed to pair classroom financial education with financial consulting by a certified financial planner. This hybrid was piloted at both the Denver, CO and Kansas City, MO FRB branches in 2005.

Due to the success of this pilot, in December 2005 UWM issued a Request for Proposal (RFP) to select and authorize financial education providers. Based on RFP evaluation criteria, Waddell & Reed and Family Housing Advisory Services were chosen as providers. UWM raised $10,000 to pay for the cost of three pilot employer programs. The three Omaha employers, which all selected Waddell & Reed, were Quality Living, Inc (May 2006), Nebraska Furniture Mart (May 2007) and Godfathers Pizza (September 2007). The Federal Reserve Bank of Kansas City agreed to evaluate changes in employee behavior over time as a measure of performance of the pilots. Final results will be published August 2009.

Recipe for Program Implementation Process

To help you recreate this program in your community, we are providing a recipe for implementation with supporting documents and a sample timeline. You can open individual documents using recipe links below or download the recipe with all supporting documents (PDF) in one package.

1. Identify prospective certified financial planners and both for-profit and non-profit financial education trainers and compile list for mailing. ( Requisite Program Components )

2. Send out Statement of Qualifications (SOQ) to mailing list. Request response in 30 days.

3. Meet with at least three prospective employers to pilot program. Share Financial Education Flowchart with employers. Identify funding ($10,000) to underwrite the cost of a pilot at 3 local employers. Identify Performance Measurements sought.

4. Review SOQ responses and identify 4 to 8 potential providers to go to the next step in the evaluation process..

5. Select providers and conduct one hour audition presentation from trainers and financial counselors. Screening committee evaluates on presentation quality, cultural competency and match of missions.

6. Sign Memorandum of Understanding between providers and United Way.

7. Initial meeting with employers and United Way staff to provide program overview, discuss program logistics and recommend processes to identify which approved provider matches employer needs.

8. Employer interviews and selects provider.

9. Meet with management team (including HR contact) of selected employers and recruit some managers as participants in first class.

10. Internal promotion of program to recruit participants. Employer distributes letter from head of company to convey stamp of approval of program and participation.

11 Conduct simple pre and post surveys of participants to evaluate financial behavior changes.

12. Providers conduct training and one-on-one household financial consulting concurrently. Employees complete classroom training and develop individualized financial plan and utilize other financial tools. Have employees bring in copy of credit report (www.annualcreditreport.com) to first financial planning session.

13. United Way conducts exit interview with employers and employees to ensure quality control.

14. United Way continues ongoing marketing of WFE program and program enhancements such as value added financial products and services.

15. Further explanation of WFE partners' Roles and Responsibilities

OTHER SUGGESTIONS

Seek Federal Reserve, Human Resource trade association, chambers of commerce and other high caliber program sponsors to host meeting of prospective employers to highlight need for financial education and program implementation.

Cost ranges from $320 to $680 per participant and includes financial planning for a year. Often employers share payment of 1/2 the cost and pay time at work for class.

Screening committee should include a variety of gender, race and should include human resource staff from both large and small businesses.

Individual Development Account (IDA)

Ask your employer if your company offers an IDA (Individual Development Account). IDAs help working individuals take charge of their finances, repair credit and build savings for investments. Employers match the funds you set aside in savings accounts that can only be released for asset building purchases such as home, education, job training, or business start-up. Employees can leverage up to $2,400 in matching funds.

Omaha employers that are participating in IDA programs include Marriott, Boys and Girls Clubs, Family Housing Advisory Services, OneWorld Health Center, United Way of the Midlands, Catholic Charities and Visiting Nurses Association.

Family Housing Advisory Services operates Omaha's IDA Program which also includes a Non-profit Employer IDA program with FSP providing assistance in funding, technical assistance and recruiting employers. Omaha's IDAs results are:

• 41 participants have saved $51,400
• 17 participants have bought homes ($1,963,477million in mortgage loans)
• 3 participants have opened businesses
• 2 participants have completed their CNA certifications

Marriott Employer Based IDA Program (10 available accounts- Homeownership only)

• 10 employees have completed 24 hours of financial management education (classroom)
• 4 employees have completed 12 hours of homeownership education
• 10 open accounts, total savings $9,600
• 2 employees have purchased and closed on their home ($229,423)
• 8 employees working on credit repair