Southern Bancorp Community Partners Individual Development Account program is celebrating its 1,000th asset purchase by residents of 50 counties in Arkansas and Mississippi.
An Individual Development Account (IDA) is a tool employed in poverty reduction. It provides a powerful incentive for low-income residents to save and invest in lifelong assets by matching qualifying participants’ savings with $3 for every $1 they save. Once they reach their savings goals and complete financial education classes to help them learn budgeting and how to develop a savings plan and goal, participants can use the savings to buy a first home, start a business or go to college.
An IDA can help change standards of living. “The goal is poverty reduction,” says Karama Neal, director of Southern Bancorp Community Partners, a nonprofit affiliate of Southern Bancorp. “IDAs are a tool to get there. SBCP is always on the lookout for the best mix of services to help families with low or moderate income achieve economic security.”
The 999th and 1,000th asset purchases were facilitated by Southern’s IDA coordinator Mindy Maupin, who helped a couple in Helena-West Helena, AR with a home purchase and renovation.
The first SBCP Individual Development Account purchase was for home repair on Nov. 20, 2000. The 1,000th purchase was again for home repair 12 years to the day later — on Nov. 20, 2012.
One of the 1,000 purchases was made by Gracie Lee. Ms. Lee, of Helena-West Helena, is a mother of two who, after being introduced to Southern services including the IDA program, decided to work on her credit. After starting with no credit score, she was able to achieve a 640 median credit score within a year and half. She then opened an IDA and started saving toward home ownership while completing 12 hours of financial education, including eight hours of home buyer education.
Ms. Lee decided to go forward with a home purchase using her IDA to pay her closing costs. “Not only did the IDA program provide me with some money for closing costs on my home, but I also learned how to really save because of everything I learned from Ms. Vida [Fielder, a Southern credit counselor] and Ms. Mindy [Maupin],” Lee said.
Thirteen percent of Southern’s 1,000 IDA purchases were for small business development, 32 percent were for higher education and 55 percent were for home repair or purchases. Such purchases can make lasting positive changes for families and communities through increased income and household stability. More than $650,000 was saved by residents over the past 12 years and
matched with almost $2 million.
Southern Bancorp Community Partners receives annual dividends from Southern Bancorp Inc. Of those dividends, $50,000 was approved by the SBCP grant committee for matches (with other funders) to the poverty-reducing IDA program. Over the past 10 years, Southern has made over $10 million in grants to support revitalization of communities throughout Arkansas and Mississippi.
“Southern Bancorp has stepped up as a leader for the financial market in investing in the economic security of American families and proving that you can both do well and do good,” says Anne Mosle, vice president of Washington D.C.-based Aspen Institute, an educational and policy studies organization. She is also executive director of Aspen’s Ascend Family Economic Security Program, which seeks to move parents and children beyond poverty toward educational success and economic security.
Those interested in supporting IDAs as a path out of poverty can make donations to SBCP by calling (501) 850-8978. All donations are tax deductible, and Arkansas donors are eligible to receive a 50 percent state income tax credit.
Funded in part by grants from the U.S. Dept. of Health and Human Services and the state Department of Workforce Services, SBCP also operates programs in family economic security, community development and public policy.
To learn more about SBCP visit southernpartners.org.
Southern Bancorp is one of America’s largest and most profitable community development banks. Southern seeks to reduce poverty by improving education and economic opportunities for individuals and families. For more information visit www.banksouthern.com.