Promoting living wages, building household assets and encouraging supportive public policies as strategies for reducing poverty are key focuses of the field of income security. Benita Melton and Sue Peters are program staff with Charles Stewart Mott Foundation’s Pathways Out of Poverty Program and discuss issues and strategies behind the Foundation’s grantmaking in this area.
Mott: What is Mott’s interest in the area of income security?
Benita Melton: Many low-income, low-skilled households in the U.S. have difficulty making ends meet. For these families, even working full-time isn’t enough to escape poverty.
Mott’s goal is to promote programs and policies that help these families create income security. Specifically, we support initiatives that seek to expand access to — and the impacts of — work-based supports, such as Earned Income Tax Credits (EITC). Our grantmaking also explores and promotes asset-building opportunities, including Individual Development Accounts and Children’s Savings Accounts, as part of the country’s safety net strategy.
Finally, we fund efforts to educate policymakers on the economic needs and concerns of low-income, low-wealth families.
Mott: Could you explain more about the “safety net”?
Sue Peters: Basically, it’s those public programs — such as cash assistance, the EITC, food stamps, Medicaid and so on — that help protect people against deep poverty.
At Mott, we believe that a well-functioning safety net is key to ensuring that low- and middle-income families have the tools to meet the challenges of economic insecurity. There’s also evidence that work supports play an important role in job retention. As a result, our grantmaking includes helping the field develop strategies for defining and delivering effective safety net programs.
We also recognize that the country’s fiscal health has a significant impact on the safety net system and other governmental strategies to alleviate poverty. As a result, the Foundation funds projects to monitor the fiscal condition of federal and state governments and their ability to finance those programs.
Mott: Could you give an example of that grantmaking?
Melton: The State Fiscal Analysis Initiative, or SFAI. Through the SFAI, our grantmaking is helping advocates and other stakeholders understand the connections between fiscal policies and budgetary decisions.
SFAI now consists of 30 groups, all of whom analyze and produce reports on state-level budget and fiscal trends used by advocates, the media and policymakers. These reports contribute to the design — and, in some cases, the reform — of federal and state policies and programs that help low-income families.
A key SFAI goal is to ensure adequate funding for work supports and other important low-income programs. Since its launch in 1993, the SFAI has helped maintain funding for social service programs and promote long-term, structural budget reforms.
Mott: You mentioned Individual Development Accounts. What is Mott’s focus there?
Melton: IDAs are a slice of our efforts to promote asset-building as a poverty alleviation strategy. Through our grantmaking, we’ve learned that given appropriate opportunities and incentives, low- and moderate-income families can save money and acquire assets — such as first homes, education or even small businesses — to help secure their economic futures.
Based on these lessons, Mott has played a key role in promoting savings strategies, which in turn has helped expand policy and practice in the asset-building field. Our focus over the next few years will be to continue searching for effective strategies to deliver and finance asset building opportunities for more low- and moderate-income Americans.
Mott: What other directions might the welfare reform grantmaking take?
Peters: We’re likely to stay focused on the portfolio’s current three areas: work-based supports, asset building strategies and informing public policy. Congress recently reauthorized the 1996 federal welfare reform law and we’ll want to see what impact that has on families. We’ll continue monitoring and engaging in discussions about new opportunities to help families save. And we’ll continue to be responsive to emerging issues.