Community-led philanthropy can be tough for people living paycheck to paycheck. Residents of rural communities in the Deep South want to invest in their communities, but they also struggle to meet basic needs. McIntosh S.E.E.D., a grass-roots economic development organization, recently tested a program that aims to help people save money and contribute to their communities.
The first goal: Help people living in poverty create a sustainable form of savings. But finding the money to invest in savings is just one challenge for those struggling to make ends meet. Many low-income families have had negative experiences with banks, or none at all, so financial literacy can be another obstacle.
McIntosh S.E.E.D. wanted to offer a framework for saving that worked for everyone, and they started by identifying two rural communities of color for the pilot savings program. Holmes County in Mississippi is the poorest county in the country, with an average poverty rate of 43.4 percent. And McIntosh County in Georgia is a historically and ecologically rich area, but most residents are low-income.
The “Starter Savings Plan” launched in January 2017, with 33 participants each contributing a single dollar. The idea was that everyone can find a dollar in their budget, and that’s something to build on. Participants contributed one dollar the first week, two dollars the second week and so on. That’s ten dollars at the end of the first month. By the end of the year, participants who stuck with the calendar plan had saved $1,378—the first real savings many had accomplished in their lives.
Participants saw the value of the program play out in myriad ways. One woman’s grandson moved to Florida, and she bought him a car with money from her savings. A man put his savings towards his grandson’s college fund. Another woman’s child had a playground accident and chipped a tooth. Insurance wouldn’t cover an expensive dental procedure, but she was able to save her child’s tooth with the money she’d saved. After those costs, participants made a plan to get back on track to meet their yearly goals. At the end of the year, some families reported having the best holiday season they could remember. On top of being able to afford gifts, they started the new year debt free.
The pilot program has now grown from 33 to 75. Participants are recruiting siblings, cousins and grandparents, and their newly-acquired financial confidence is having a ripple effect in their communities. Some returning participants agreed to take part in a “Savings for You & Me Plan,” which encourages a 90-10 split, with t 10 percent going into a community fund. Contributors vote on how to use that money to make long-term improvements for their communities.