pegkerr | A savings program of interest (Reply)

I learned about this through my monthly AARP publication:

SaveTogether.org: (@SaveTogether on Twitter and SaveTogetherOrg on Facebook)

A new non-profit, Savetogether.org, makes it easy to spread the message of saving while helping others to reach their financial goals. Using an online philanthropy model, SaveTogether helps low wage individuals triple their savings through the power of matched savings accounts. Here's how it works: A saver puts aside $25, a donor makes a secure, tax-deductible $25 donation on the website, which is then matched by $25 from government and participating non-profits. Prescreened savers are profiled on the website and file reports on their progress saving for college, a new home, or a business start-up.

"These stories of people who are at the bottom of society's pyramid can inspire us all to be better savers," says Dylan Higgins, CEO and founder of SaveTogether.

SaveTogether.org will soon include a map of local programs that sponsor Individual Development Accounts, matched savings accounts for the working poor.

The FAQ at the site says:

What is a matched savings program?

A matched savings program provides savings accounts for working people in which the individual saves and his or her savings is matched by public and/or private funds. The individual uses the savings for an approved investment – often an educational degree program, or small business capitalization, or home ownership. Savings are generally matched $2 for each $1 in savings.

Matched savings programs are typically a partnership between a community or state-based nonprofit organization and a financial institution. Match funds are kept in a separate account at the financial institutiona and released to the vendor – the mortgage company, educational institution or business bank account – upon request of the saver and approval of the non-profit organization managing the program.

Who is eligible to participate?

Each matched savings program has its own income eligibility criteria but generally eligibility is based on the federal poverty level and area median incomes. To learn more, please visit the websites of our matched savings program partners.

How do savers “earn” their match?

Participating families work, save, learn and invest to earn their savings match. While making deposits every month into a restricted account (only the community organization can approve withdrawals), a saver is required to attend financial education classes to help her save more on her modest income, and to help her plan for the investment she intends to make. When she has saved for at least six months and completes the training requirements, she can begin to invest her savings and match. If the saver does not save, she does not earn matches.

What can the saver purchase with their funds?

Traditionally, matched savings accounts have been used for three major goals – post-secondary education, small business capitalization, and home ownership. Many organizations are experimenting with new investment goals, such as saving for citizenship or saving to build emergency funds. As SaveTogether continues to grow, we hope that our platform will accommodate the realization of a variety of important goals. If you’d like to suggest other goals that would help families break the cycle of poverty, contact us at info@savetogether.org.

Read more at the FAQ here. I thought this program might be of interest both to people who might like to apply themselves, or people who want to consider it as a charitable option, especially those who have gone through hard times themselves and might like to 'pay it forward' for a modest buy in price.