Microfinance/TANF Demonstration Project
The Center for Hunger-Free Communities and the Pennsylvania Department of Public Welfare are working to develop, implement and sustain a microfinance demonstration project in Philadelphia’s most underserved neighborhoods over a five-year period. The project’s short-term goal is to develop a peer-oriented, asset-building model that helps women break the cycle of poverty. The long-term goal is to develop a model of public assistance that could transform the United States welfare system.
Program components include:
- Matched savings accounts
- Financial literacy classes
- Peer support groups using the Sanctuary ® trauma-informed approach to social services
Expected outcomes include:
- Income and savings
- Health and wellbeing
- Economic security
- Financial well-being
- Neighborhood and financial indicators
The planned demonstration project will include 500 women in the intervention group and 500 women in a control group and run for five years beginning in January 2014. Partnership with the Commonwealth of Pennsylvania allows program hours to count as TANF participation hours and savings to be exempt from TANF asset limits. Financial literacy education and individual financial counseling will be provided to participants in the program.
Based on research generated through the two signature programs of the Center, Children’s HealthWatch and Witnesses to Hunger, the Center has learned four important lessons about the landscape of poverty and public assistance: the federal safety net is essential for protecting and promoting maternal and child health; the safety net does not completely protect families from poor health; the structures of public welfare can inhibit a woman’s ability to reach self-sufficiency; and low-income women seek to find ways to build their social networks, and possess a strong desire to help other women similar to themselves. These lessons serve as the basis of the development of this demonstration project.
This demonstration project offers an opportunity for women to shape their own futures, and to do so in community with their peers. Ultimately, the proposed project has the potential to alter the structure of the United States public welfare system from passively supporting participants to actively empowering individuals to break the cycle of poverty.