Welcome to Community Financial Resources' (CFR) series to highlight the amazing work our partners are doing and the impact these partnerships have on the community. Meet this month's spotlight: Prepare + Prosper!
Prepare + Prosper and its volunteers work with low-to moderate-income people to build financial well-being through free tax preparation and financial services, products, and coaching, and by changing systems to create economic opportunity.
Prepare + Prosper (P+P) is a nonprofit founded in 1971 to provide free tax preparation and assistance to low-and moderate-income people. It has since evolved into a nationally recognized leader in the financial inclusion field, adding additional financial well-being services to help customers increase their income, strengthen their financial standing, and transform their economic lives. In a typical year, P+P leverages the help of more than 550 volunteers to serve over 12,000 people and return more than $25 million in tax refunds.
While tax preparation remains core, P+P has expanded its services to include Money Mentors financial coaching program and the Financial Access in Reach (FAIR) Initiative, which provides financially underserved households with a suite of accessible financial products to create economic opportunity. P+P also continues to engage in outreach, resource-sharing, and advocacy to promote free tax preparation, asset-building, and economic justice on a statewide and national scale.
About the Partnership
Prepare + Prosper began partnering with CFR in 2012 to offer a prepaid debit card in their Volunteer Income Tax Assistance (VITA) free tax program. In 8+ years, P+P’s staff and volunteers have opened at least 5,600 prepaid debit cards at tax time. If you take the average check cashing fee of $8 to cash a refund check, P+P and CFR have saved participants nearly $45,000 in fees over the length of the partnership. What’s more, P+P’s direct deposit rate went from just below 70% at the beginning of the partnership and has increased to nearly 90% today!
Providing access to a low-cost direct deposit option at tax time has saved P+P participants time, money, and risk. With direct deposit using the CFR card, P+P participants don’t have to wait to receive a check in the mail and again when cashing it and don’t have to carry thousands of dollars around in their pocket as a walking target for theft.
Staff and volunteers process anywhere from 500 – 700 debit cards each year. P+P is able to meet this demand because the process for signing a customer up for a prepaid debit card through CFR is less invasive and intrusive than other account application processes. It takes minimal customer information and just minutes to receive a routing and account number that can be immediately recorded on a tax refund before e-filing. This makes it easy to train their 40+ volunteers and seasonal staff each year and doesn’t disrupt the tax preparation process.
P+P reports, “Staff at CFR are supportive, responsive, and solution-oriented. They serve as an important ally and advocate between the nonprofit and public sectors and a bank. P+P partners directly with several banks and credit unions and it is a huge relief and benefit to have CFR directly manage the relationship with the bank.”
The team at P+P shared with CFR that “having CFR staff as a national champion advocating with one of the largest financial institutions in the country and building a simple solution for nonprofits to provide access to their customers makes them a rare treasure in the financial inclusion space. Most community-based organizations and the front-line staff working for them are left to fend for themselves in searching for financial products and local bank partnerships to meet their customer and client financial services needs. Having a national intermediary like CFR to fill that space and expertise is essential particularly in a time when access to mainstream financial accounts keeps people healthy and safer in a global pandemic. Using cash and/or standing in line to cash checks puts people’s health at risk in a pandemic and having access to a financial product to shift to online shopping for essential items like groceries is more important today than ever before.”
Impact
P+P has seen a steady stream of participants return year-to-year with their prepaid debit card in hand ready to direct deposit their annual tax refund(s) onto it. P+P notes the CFR card is far more accessible and low-cost than the other prepaid debit cards that participants have in their wallets, many that come with monthly fees and fees each time they swipe the card. Participants also feel a sense of dignity when using the card offered through CFR, because not only does it come with their names embossed on the card, but they feel like they are part of a real bank [U.S. Bank] rather than a card they picked up at a local drug or dollar store. Having a prepaid debit card that is reloadable and can be used for travel, online purchases, and direct deposit of a paycheck and benefits has unlocked access and restored dignity for many who are shut out of the financial mainstream.
P+P staff & community members have shared that this partnership has had a positive impact:
“A tax clinic is a busy and stressful moment fraught with lots of paperwork and anxiety - having a reliable, fast, trusted, stress-free direct deposit option that doesn’t require a taxing process [no pun intended] is important.”- Kate Haigh, Tax + Financial Services Manager
“I’ve enjoyed not having a bank account for over 5 years. I like the freedom of not having an overdraft fee. Once you have an overdraft fee, you get eight. You get a $30 fee per transaction. A lot of poor people are paying a lot of overdraft fees. My bank account was overdrawn by $400 and I couldn’t afford to bring it positive. I cut ties and ran so I could move forward. At that point, I was using check cashing like Pawn America and that’s how I was getting by. It was inconvenient because I had to get paper checks from my employer and go to different places. What I like about the Focus Card is I can withdraw cash for free at any US Bank ATM. There have been times when I’ve had 5 prepaid cards at a time. I liked the Focus Card because it was local and attached to a real bank...The US Bank makes me feel like a part of society and that’s what I’m going for. That’s part of this rebuilding and repairing and that is huge.
- Anonymous Participant
The team at CFR is proud to partner with P+P and share their critical work towards uplifting our community. Learn more about P+P here.