Five years in, fund still trying to dent poverty

FIRM FOOTING: Now in its fifth year, the Capital Good Fund is still pushing its mission of creating “pathways out of poverty.” Pictured above, from left, are: Capital Good Fund Head Financial Coach Rachel Wall, Deputy Director Kate Lyons, data analyst Jose Fonseca, Director of Program Libby Kimzey and Executive Director Andy Posner. / PBN PHOTO/RUPERT WHITELEY
FIRM FOOTING: Now in its fifth year, the Capital Good Fund is still pushing its mission of creating “pathways out of poverty.” Pictured above, from left, are: Capital Good Fund Head Financial Coach Rachel Wall, Deputy Director Kate Lyons, data analyst Jose Fonseca, Director of Program Libby Kimzey and Executive Director Andy Posner. / PBN PHOTO/RUPERT WHITELEY

As Rhode Islanders continue to wrestle with the highest unemployment rate in the nation – 9.1 percent in December – and a sluggish economy, Capital Good Fund is marking its fifth anniversary this year by pushing forward with its idealistic mission to “create pathways out of poverty” with on-the-ground assistance through microloans, free tax preparation and financial coaching.
While some economists and others in the financial world are reporting a slow-but-steady, upward turn in the economy, Capital Good Fund founder Andy Posner is finding it as challenging as ever to make a dent in poverty in Rhode Island.
“I’m not seeing things picking up for the population we serve,” said Posner. “Things are picking up for the upper-middle class and upper class.”
Some economic signposts in Rhode Island reflect continuing financial distress in the state, particularly among Capital Good Fund’s clients, said Posner.
“Payday loans are as strong as ever and so are check-cashing services and pawn shops. That’s predatory financing,” said Posner. “They’re providing services at a cost that people can get for free elsewhere.”
The free tax preparation provided by Capital Good Fund for those who qualify for the service is intended to help keep tax refunds complete, but some who want, or need, the money more quickly to cover living expenses sometimes go to a service that charges a fee to make the refund money available more quickly, said Posner.
One of the programs initiated by Capital Good Fund to break that cycle of unnecessarily giving away some of that tax-return money is a collaboration with three banks – Navigant Credit Union, People’s Credit Union and RBS Citizens – to open an account for the tax refund.
“We’re partnering with Capital Good Fund to encourage people who don’t have a bank account to open an account with one of the three collaborating banks,” said Navigant Credit Union Vice President for Business and Community Development Randy Sacilotto. “Ours is a pilot program called ‘Smart Start’ to give people a chance to get on the road to financial stability.”
As one of the original volunteers on Capital Good Fund’s financial coaching team, Sacilotto is careful not to recommend his bank, but to encourage people he coaches to choose the bank that’s most convenient for them, so they can develop positive financial habits. “Spending habits are often ingrained, so the first thing I usually do in coaching is have people track everything they spend for two weeks, or preferably, a month,” said Sacilotto, who’s been a volunteer financial coach since October 2011. “I get them to clarify their goals and then examine whether the spending is getting them to reach their goals.
“Our credit union industry motto is people helping people and Navigant’s mission is to improve the lives of our members,” he said.
The mission of Capital Good Fund complements Navigant’s perspective to be a positive force in the community, he said.
“Capital Good Fund is an incredible organization. Their goal is to eradicate poverty and I love that they think outside the norm,” said Sacilotto.
RBS Citizens partners with Capital Good Fund in thinking outside the norm as one of the three banks encouraging the development of a banking relationship.
“A checking or savings account can be opened at Capital Good Fund. They do not have to go to a branch,” said RBS Citizens spokeswoman Lauren DiGeronimo.
Volunteers from RBS Citizens assist with the free tax preparation offered by the Capital Good Fund, she said.
“Capital Good Fund has been a valued partner since 2012 when the bank launched Citizens Helping Citizens Teach Money Management, a program dedicated to giving consumers the confidence and tools they need to budget, save, invest and be fiscally healthy,” said Barbara Cottam, head of corporate affairs for RBS Citizens Financial Group.
“Capital Good Fund has been successful in its mission to provide financial services to underserved families in Rhode Island,” said Cottam. “The one-on-one financial coaching, free tax preparation and personal loans have afforded consumers the opportunity to move out of poverty and make educated financial choices.”
Getting assistance with tax returns and opening a bank account are steps toward building a solid financial foundation in what are often complex situations that send people to seek coaching at Capital Good Fund, said Sacilotto. “One of the challenging things about being a volunteer financial coach that I’ve found, in more than two years of coaching, is that while many people do make positive changes, it’s really not a quick fix,” said Sacilotto. “Some people are just over their heads or underwater.”
A person with a mortgage that’s underwater is in a situation where more is owed on the property than it’s worth on the market.
“You can’t be judgmental and tell people they shouldn’t buy a cup of coffee,” said Sacilotto. “As a coach, you just work with them to determine what their financial goals are and how they’re going to achieve them.”
Some of the people he’s coached as a Capital Good Fund volunteer have surprised him.
“One person worked at a very successful brokerage house and made good money,” said Sacilotto. “So you have someone working for a financial services organization and just spending too much with credit cards.”
Another person he coached was a woman with a teenage child working 50 to 55 hours a week and up against the wall in not being able to meet expenses or work more hours to bring in additional income.
“It really takes more than a couple of sessions for people to get a handle on their finances,” he said.
Some he’s coached have gone over all their financial details and never come back to get their plan in motion, he said.
Since it was incorporated Feb. 10, 2008, Capital Good Fund has disbursed half a million dollars in loans, provided more than $1 million in free tax preparation and served 750 families with financial coaching. In the process, it’s grown from three Brown University student founders to a staff of 16, with 120 volunteers, and opened offices in Providence, Woonsocket and Hartford, Conn.
“Every night I dream about new ways to tackle poverty,” Posner said in his five-year anniversary email message last month. “Every morning my team and I get to put those plans into action, and to test, refine and renew them.” •

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