May 2020 Newsletter
RAISE Texas News
RAISE Texas News
Save the Date RAISE Texas Summit!
We may be navigating through the uncertainty of the pandemic right now, but mark your calendars to join us in November! RAISE Texas is thrilled to announce that our next summit will be on November 5, 2020, hosted by the Federal Reserve Bank of Dallas, Houston Branch. Save the date and we can look forward to discussing ways to increase the financial resiliency of all Texas families!
COVID-19 Impact on the RAISE Texas Network
Thank you for sending us your feedback to the RAISE Texas Crisis Response Survey! We understand that times are uncertain right now. It is difficult to shift to virtual services and to juggle the many responsibilities we are each facing working from home each day. But, we want you to know how thankful RAISE Texas is for the hard work of our network. Four items stuck out to us.
- Over 61% of respondents have moved all or some of their services to virtual in order to continue to serve their clients during this crisis.
- Almost 50% of respondents have had to cancel financial education classes due to the stay-at-home restrictions, followed by 27% of the VITA services being cancelled. This is totally understandable due to the size of groups and the sensitivity of signatures and information when dealing with taxes. We have heard from several groups that were able to go virtual with financial education classes or virtual VITA services, so please reach out if you would like to be connected to one of these groups.
- Approximately 40% of respondents have never offered virtual services before.
- Finally, over 40% of respondents said that they are confident that their organizations have enough cash reserves to weather this crisis over the next 3-6 months. Great job to organizational leadership in practicing what we teach to the community by being fiscally responsible for the organization!
Federal Reserve Releases New Report on Impacts of COVID-19
The Federal Reserve Bank of Dallas, along with the other 11 banks and the Board of Governors released a new report, “Perspectives from Main Street: The Impact of COVID-10 on Communities and the Entities Serving Them”, to show findings from a nationwide survey on the challenges that U.S. communities are facing during the COVID-19 pandemic. Some of the findings include:
- Nearly 7 out of 10 respondents indicated COVID-19 was a significant disruption to the economic conditions of the communities they serve and that recovery is expected to be difficult.
- Income loss, business impacts, health concerns, and basic consumer needs were the most frequently cited impacts of COVID-19.
- 66% of respondents indicated demand for their services has increased or is anticipated to increase, and more than half of the respondents noted a corresponding decrease or anticipated decrease in their ability to provide services.
- A quarter of respondents indicated their entity could operate for less than three months in the current environment before exhibiting financial distress.
Aspen Institute: Lack of Emergency Savings Threatens Long-Term Financial Security
The Financial Security Program at the Aspen Institute recently held its fourth annual Aspen Leadership Forum on Retirement Savings where retirement savings leaders focused on the ways that 401(k) participants’ lack of emergency savings is harmful to retirement balances by preventing workers from participating in retirement plans that have inaccessible funds and leading 29 percent of job-changes to cash out their retirement savings when leaving an employer. This lack of emergency savings has been one of the reasons that retirement account balances are on average 25 percent smaller by age 60. Aspen Institute has partnered with Blackrock’s Emergency Savings Initiative to focus on automatic savings systems and how to increase the availability of automatic savings programs to families over the next two years. Read more about Aspen Institute’s efforts here.
Low-Income Hardest Hit by Economic Fallout and Less Prepared
A new Pew Research Center survey finds the economic fallout from COVID-19 is impacting lower-income adults harder. In fact, 52 percent of lower-income adults now say they or someone in their household has lost a job or taken a pay cut due to COVID-19, compared to 43 percent of U.S. adults. The survey also shows that lower-income adults are less prepared to withstand a financial shock, with only 23 percent reporting they have an emergency savings account to cover expenses for three months in case of a job loss, illness or an economic downturn. The survey finds that 61 percent of Hispanic adults have suffered pay cuts or job losses, compared to around half or fewer of black and white adults. And, 47 percent of Americans report having savings to cover their expenses for up to three months, but only a third or less of black and Hispanic adults, those younger than 30, and those with no college experience report having a rainy day fund to cover emergencies. Click here to read the entire report.
IASP Releases New Report on Accelerating Equity and Justice
The Institute on Assets and Social Policy’s new policy brief, Accelerating Equity and Justice: Basic Income and Generational Wealth, reveals that combining monthly basic income and Kids’ Future Accounts promotes family economic mobility at an unprecedented scale. The brief examines evidence and theories relating to cash transfers and wealth-generating programs to propose Just Futures Fund policy proposal. The Just Futures Fund is a $1,000 per month basic income to every US adult with an additional $250 for each child into a Kids’ Futures Account every month, which is an interest-accruing account accessible at age 18. Every child would receive $1,000 at birth, and then depending on their parents’ assets they would receive up to $2,000 per year. Key findings from the brief are:
- The Just Futures Fund has the power to virtually eliminate income poverty for U.S. households;
- The Just Futures Fund would allow families to plan for the future by virtually eliminating Asset Poverty; and,
- The Just Futures Fund would dramatically increase the wealth of families of color and put racial equity in Reach.
Click here to reach the entire policy brief.
New Study Shows Detroiters Will Be Out of Money Soon Due to COVID-19 Crisis
A study from University of Michigan reveals that one in five respondents will definitely run out of money in the next three months due to COVID-19, if they do not receive additional support. The Detroit Metro Area Communities Study polled Detroit city residents to assess the impact of COVID-19 on them from March 31 through April 9. Nearly half of respondents reported being more likely to run out of money in the next three months, and the majority of respondents said health and economic impacts of COVID-19 were of greatest concern. Click here for more information.