Daynor Carman:

Hi, Sarah.

Sarah Spunt:

Hi, how are you doing today?

Daynor Carman:

So hi, everyone. I’m Daynor, the General Counsel of Possible Finance. Today, we're here with Sarah Spunt from LiFT, the Executive Director of LiFT Chicago, celebrating National Nonprofit Day. So thank you, Sarah, for spending some time with us, pulling you away from your important work to chat with us today.

Sarah Spunt:

Oh, my pleasure.

Daynor Carman:

We’re gonna talk with you about LiFT's mission and how we're so excited to be partnering with you. So could you share to start off some background about LiFT and what you do for the organization?

Sarah Spunt:

Yeah, absolutely. And I'm excited to be here talking to you and celebrating National Nonprofit Day. So I am Sarah Spunt. I'm the executive director of our LiFT Chicago office. LiFT is a national organization located in New York, DC, LA, and here in Chicago. And I have been with the organization for nine years. And LiFT focuses on breaking the cycle of poverty by investing in families. And so we believe that parents are the change agents for their families and worthy of investment. And oftentimes systems are not set up to support families and support young children. And we believe that it is essential to support parents, particularly while their children are young, to help break the cycle of poverty.

Daynor Carman:

That's wonderful and very important work, with a critical need in our communities. And I hear you using terms like, “breaking the cycle of poverty,” those are terms that get thrown around at our company as well. Other terms like, “economic mobility,” allowing people to move up in life. What does a term like economic mobility mean to LiFT and to the work that you do?

Sarah Spunt:

Yeah, I think in a broad sense, it's very similar to how a lot of people use it and that is being able to move up in economic status. But there's a lot of barriers to that. So poverty, like wealth, is transferred from generation to generation and often passed down. And that is something when we say breaking the cycle of poverty, that is the cycle that we're talking about is passing down poverty from generation to generation. And right now in our country, there is also a very big racial wealth gap. And so part of economic mobility is helping closing that racial wealth gap. And the way we do that is by working directly with parents. We work in three key areas of financial strength, personal well-being and social capital, or what we call hope, money and love. At LiFT, knowing those three things working together are essential. The financial strength part, though, is where most people think of economic mobility. And so we're looking at helping parents increase their income by either finding a higher-paying job with benefits that might entail going back to school or getting a certification or some type of upskilling to help get that higher paying job. So in Chicago, about 50% of our parents are pursuing a post-secondary education credential. And so working with student parents is a big part of that economic mobility, knowing that the different credentials helps increase their income potential as well. And so that's when we focus on economic mobility, that's what we're talking about are, what are some of the indicators that can help a family increase their income potential? We also look at things like decreasing debt, increasing savings, increasing credit scores, and preparing for major purchases, because when we talk about the racial wealth gap, we also have to talk about wealth and assets, and there are steps that you have to take to be able to build wealth and assets. And so, what are some things that we can do directly with our families to help move the needle along? And that's why we focus on parents with young children, because we know if you invest in a family while the children are young, that increases the family's chance of greater economic mobility for their children. So a stat we like to throw out is if you increase a family's income by $3,000 a year, or increase a parent's income by $3,000 a year, that yields over 17% increase of potential earnings for that child.* At LiFT, our average income increase for parents who increase their income is around $20,000. So if we know $3,000 has that indicator for the children, it will take long-term evidence, but what does the $20,000 mean for a family?

Daynor Carman:

Yeah! That's an incredible impact that you're having. How are you—what are some ways that you're able to increase by $20,000? Is it a combination of the kind of the job stuff you talked about, savings? I'd love to hear more detail on how you got to that.

Sarah Spunt:

Yeah, so a lot of it is helping parents move into full-time employment, particularly with benefits. Where we see the largest increase of income, though, is with our parents who do complete some type of post-secondary degree or certification and so that is why we have a part of our program focusing on parenting students and making sure that we're supporting parents as they're pursuing their post-secondary education.

Daynor Carman:

That is a wonderful result. I mean, to hear the impact of $3,000 and that LiFT is helping families increase by $20,000, that's an incredible success story for LiFT. You also mentioned working with children and families, and I know right now everyone's worried about back-to-school. What are some ways that you're helping families prepare for getting their children back to school?

Sarah Spunt:

Yeah, so in addition to our coaching program, like I said, we do have different family engagement events that we do throughout the year. And one of them is our Back-To-School Bash, where we receive school supplies, backpacks from our community partners and some of our supporters to help make sure that kids have a new backpack filled with supplies on their first day of school. And that helps in two ways. One is just the financial slack that it creates for parents and knowing that they don't have to worry about buying or purchasing new school supplies or school uniforms when going back to school and just decreasing that stress of increasing expenses during the month. So it's something that we can provide a little cushion around for our families. The second is looking at our well-being aspect, like having a new backpack filled with supplies builds confidence for kids and being able to show up ready for school, ready to learn and knowing that they have the supplies that they need, builds the confidence that they need to be ready for that new school year. And so that's where we try to where we take our two-generation approach. While we don't work directly with children in our program and it is working directly with parents, we want to make sure parents are able to set their kids up for success during those big transition moments like going back to school.

Daynor Carman:

That's a wonderful program. Has it already happened in Chicago yet?

Sarah Spunt:

We are having it on Tuesday the 15th. 

Daynor Carman:

Okay, wonderful. I'm gonna check into that and see if there's a way I can help support. I have two little ones. 

Sarah Spunt:

Yeah, absolutely. I’ll have our people email you. 

Daynor Carman:

Yeah, follow up with me. Because we're all in back-to-school mode right now and we get these long lists from the school of all these supplies. So it's wonderful that you're helping take that stuff off families so that they can prepare their kids for a good school year. So one of the ways that Possible has partnered with LiFT is through your wealth and asset building series. I'd love for you to share more about that series and what it provides to your clients.

Sarah Spunt:

Yeah. So that is a virtual webinar series. We call it LiFT’s WISH: Wealth Building Initiatives for Strengthening Households. Us nonprofits. We love our acronyms. So when we can create a complicated acronym, we do it! But it is a virtual webinar series that is geared towards parents around wealth and asset building. And so one of our board members here introduces the series every year on the five principles of wealth building. We go through those principles with families. Oftentimes it's focusing on some of the stability stuff, like budgeting and savings. Then we go more into some of the investment, preparing for retirement. And then the third bucket is often around preparing for a major purchase, whether it's a car or a home. And then sometimes we'll bring in other topics like child savings accounts, entrepreneurship, things like that. topics that our parents are interested in that are all focused on not just the foundational economic stability, but really things that parents are looking forward to in terms of investment and life insurance, things like that. And so it's something that we launched in 2020. We used to do some in-person events, but we wanted to be able to make sure that we were able to maintain it virtually. And we turned it actually into a larger series. Before, it used to be a one-off workshop that we provided, but one of the benefits of virtual is we were able to engage people for a longer series of time and make it more accessible. And so it's not something that is, we do open it to all families here in Chicago, but then across our LiFT network as well, which is also a unique thing for our virtual environment.

Daynor Carman:

Yeah, that's really nice. That's one thing that’s one, I guess, benefit of everything moving virtual is that you're able to reach a broader audience and have more people attend. And I know when we've discussed—Possible presented on, what is credit, what is a credit score, how do you dispute, how do you clean it up? We get such good engagement and questions from your clients on that one. It seems to be a topic that people are really interested in. And I think building credit is, I think one issue and one roadblock for people in the community. Are there other issues that you can speak to that you see in your community that leads to financial issues or that hold people back from growth in that area?

Sarah Spunt:

Yeah, I think one of the, similar to credit and why we love partnering with Possible, is making sure that we can provide accurate information to our families about different resources that are out there, whether it's around credit building, debt reduction, things like that. And so there's a lot of wealth-stripping entities out there, like payday loans, things like that, that really have created a burden for our families when they are trying to access cash and capital in an emergency situation and oftentimes end up in greater debt because of an emergency situation that came up that was far greater than the original cost of the debt. We know that access to cash is important. And that is one of the things that we like about, or I should say love, about Possible is because we know that they are in the business of making sure that low to moderate income families do have access to cash, but in a equitable way and in a way that is making sure that they're not causing any harm to the people receiving the cash and going through some due diligence process with them and being able to pay back the small loan that they do receive from Possible. And so I think that is a really unique thing for a corporation to make sure that they are caring for people in that way.

Daynor Carman:

That is something that we do pride ourselves on with our product. We, I think our co-founders recognize the same need that you spoke of, of families needing this emergency access to cash without being subject to predatory lending practices and trying to teach customers good habits as far as paying back and helping to build their credit. So we're coming at the same issue but from different places with you being a nonprofit and us being a for-profit, but there's definitely synergies in the way that we serve these communities. I would love to hear your perspective on other ways that financial services companies like ours can help support your work and help support your clients if you have any, whether it's product features or just practices that we have, it'd be great to get your perspective on how we can better serve.

Sarah Spunt:

So making sure that products and services are not costing low-income people more money because they just have less money in their accounts or might not have a consistent cash flow, like some of their higher-income earners. So I think that's a big role that financial services can play. And then at a larger macro systems issue too, thinking through different ways that the policies that we have across the country are supporting families and making sure that we're ensuring that those policies get into place. And that is one of the things that LiFT has shifted in the past four years is not just taking a micro-level approach. While it is great that we are working with families one on one and we're seeing great impact in the lives of the families that we are working with, we also know that there's an entire system at play. At the beginning of this, I mentioned the race racial wealth gap and just a series of inequities that are out there. We want to make sure policies are equitable and serving families the way that they are intended to or benefit, sorry, not intended to because they are oftentimes hurting families the way that they are written. And so we want the shift in policies to make sure that they're supporting families.

Daynor Carman:

That's great. And the fee issue is also something near and dear to us. We pride ourselves on no penalty fees and not penalizing customers for falling into a tough spot, which is challenging in the financial services industry because that is typically how lenders make their money, is with fees. But we try to align our interests with clients on that point. And it is a good thought. We haven't really gotten into the policy space much, but that's an excellent point that you make about policy and how financial services providers can help support in that way as well. Any parting words for us? You've given us so much of your time, but I'd love any words of closure or parting words that you have, whether it's for Possible, financial services in general, or LiFT and ways that we can continue to support LiFT.

Sarah Spunt:

I think one of the reasons why we enjoy working with Possible so much is the values alignment and making sure that families and people are supported regardless of their economic background and their level of income. So I think that is something that is really meaningful to us and I think it's important as we think through private-public nonprofit partnerships as well of one how values alignment moves the work forward and knowing that a lot of us are working towards the same goal. So the importance of collaboration is key when addressing things like family economic mobility and breaking the cycle of poverty because one nonprofit, while we are small but mighty, can't do all, make all the changes, the collection of people working together, whether it is a nonprofit, corporation, or the government with the same end goal for families I think is key.

Daynor Carman:

That's wonderful and we're completely aligned on that. Thank you again for your time today and I look forward to seeing you in person and helping out with this Back-To-School bash!

Sarah Spunt:

Absolutely, I will follow up right after this.