New savings initiatives will boost financial security for Oklahoma’s Native Americans

Recently, the Oklahoma Native Assets Coalition (ONAC) announced a pair of exciting new initiatives for Native American families in Oklahoma. Supported by a $200,000 grant from the Michigan-based W.K. Kellogg Foundation, both initiatives aim to support savings as a way to promote family financial security and opportunity.

For families and individuals, savings are a basic cornerstone of financial well-being. Having savings to draw upon cushions the impact of temporary financial disruptions like the loss of a job or a medical emergency, serving as a private safety net that can avert a crisis and reduce reliance on public programs.

Savings also provide the basis for the investments – in property, education and training, businesses and securities– that allow families and individuals to grow wealth and move up the economic ladder. In addition, having savings can produce a powerful effect on expectations, habits and time horizons, encouraging and teaching people to make decisions based on long-term goals and interests rather than just immediate needs and desires.

Despite the importance of savings, a great many households, especially those with modest incomes, have little or no savings. In Oklahoma, one out of every two households (49.1 percent) lacks enough liquid savings to be able to cover basic expenses for three months if they experienced a sudden job loss, a medical emergency, or another financial crisis leading to a loss of stable income, according to CFED’s Assets and Opportunity Scorecard. For households of color, this ‘liquid asset poverty rate’ is even higher – 66 percent.

Over the past two decades, a growing field of researchers, practitioners, and policymakers have focused on boosting savings as a key means of expanding financial security and economic prosperity for disadvantaged populations. Among the many approaches that have sprouted up across the country, two of the most promising involve children’s savings accounts and emergency savings accounts.

Children’s Savings Accounts

Children’s Savings Accounts (CSAs) are accounts established for young children to build a nest egg of savings for shorter-term and longer-term asset purchases.  CSAs can have powerful effects: research shows that low-income students with just $500 or less in college savings are three times more likely to enroll in college and four times more likely to graduate.

Under the Kellogg Foundation grant, ONAC will partner with six tribal partners – Wichita and Affiliated Tribes (Anadarko), Osage Financial Resources, Inc. (Pawhuska), Citizen Potawatomi Community Development Corporation (Shawnee), Cherokee Nation Child Support Program (Tahlequah), Mvskoke Loan Fund (Okmulgee), and the Ponca Tribe Head Start (Ponca City) – to open a total of 270 Children’s Savings Accounts for Native American children ages birth to eight in Oklahoma. Each partner will operate a customized CSA program for 25 to 75 young children. ONAC will provide $100 for each child’s account, along with Native financial educational materials. Some partners may add in other funds  to seed the account, and can establish which children are eligible to participate and what the accounts may be used for.

Emergency Savings Accounts

While many savings programs target long-term, wealth-generating investments, there has been a growing recognition that another key element of financial security is access to savings that can be tapped without penalty or restriction to meet unexpected expenses and emergencies. As the New America Foundation notes in a recent report:

Given evidence about the precariousness of family finances, from volatile monthly income to inadequate retirement savings, an important step in improving family finances is to increase families’ access to flexible savings.

The second component of ONAC’s new project addresses the need for flexible, or emergency savings. It will use Kellogg Foundation grant funds to provide six mini-grants of $3,500 each to tribes and Native non-profits in Oklahoma, selected through an RFP (Request for Proposal) process.  These family emergency savings accounts may be linked to other asset-building programs that the tribes and non-profits offer to tribal citizens.

ONAC’s director Christy Finsel sees these initiatives as building on diverse programs already in place that are helping Native Oklahomans “With the varied project designs of our partners, we will be able to help Native youth and their families save for their future, have access to flexible savings, and connect to other asset building services,” she said in the press release announcing the grant.

ONAC is a Native asset building coalition that works with Oklahoma tribes and partners interested in establishing asset-building initiatives and programs in Native communities, for the purpose of creating greater opportunities for economic self-sufficiency of tribal citizens. ONAC also participates in the Oklahoma Assets Network, a statewide coalition working to build stronger financial foundations for all Oklahomans.