Assets for Independence (AFI) is a federal program that distributes discretionary grants to help the impoverished achieve one of three goals: (1) homeownership; (2) business ownership; and (3) post-secondary education. AFI was created by the Assets for Independence Act.
In order to strengthen communities and individuals, AFI uses several tools including financial education and grants supporting Individual Development Accounts (IDAs), also known as matched savings accounts.
Purpose and history
First introduced in 1991, the Assets for Independence Act (AFIA) worked its way through several sessions of Congress, finally passing in 1998. The 105th Congress appropriated $105 million to fund IDAs over the course of 5 years. AFI is the "largest federal funder of IDA programs" awarding grants to more than 400 non-profits and government programs. More than 84,000 families received some sort of assistance from AFI through the IDA and financial education programs. Over 40% of these families have been able to "join the economic mainstream" through the purchase of assets.
The AFI's ultimate goal is to help people get themselves out of poverty by creating a habit of saving their income and use those savings to purchase an asset. With this money, organizations fund individual development accounts (IDAs) that may help eligible participants obtain the desired assets in the future. Money from these savings accounts can only be used for the three specific assets mentioned earlier, i.e. homeownership, business ownership, and post-secondary education. Besides awarding grants for IDAs, the program also manages a national resource center with the intent of helping AFI grantees better understand IDAs and other asset-building strategies.
AFI is currently administered through the Office of Community Services (OCS) and part of the U.S. Department of Health and Human Services (HSS). As stated in its mission, AFI works to help low-income families transition into economic self-sufficiency. In a special partnership between OCS and the Administration for Native Americans (ANA), AFI helps support the building of assets in native communities through the Native Asset Building Initiative (NABI).
Unfortunately, no funds were appropriated for AFI in 2017, so the last fiscal year it was able to disperse funds was 2016. It is currently inactive.
Stakeholders
In order to meet their goals and purposes, AFI collaborates with a large variety of organizations that range from government departments to local charities. Several groups are described below. Before noting specific groups AFI works with, it is important to take into account that each organization has specific goals, but they relate to AFI's overall goals and purposes. Although these are not all the organizations and programs that collaborate with AFI, a large variety of programs is apparent.
The groups we will mention in the following section are the Office of Refugee Resettlement, the IRS, the U.S. Department of Housing and Urban Development, and non-profit groups.
The Office of Refugee Resettlement, like AFI, is part of the Department of Health and Human Services. Refugee Resettlement focuses on policies, programs, and initiatives to aid refugees within the country. Consequently, AFI uses the Office of Refugee Resettlement as a resource for grantees.
The IRS acts as another resource for AFI. One of AFI's main goals is to help individuals and groups to effectively save, and one way AFI is able to accomplish this goal is with the help of an IRS program called the Earned Income Tax Credit (EITC) program. AFI uses this program, in collaboration with the IRS, to train organizations that receive grants.
The U.S. Department of Housing and Urban Development, like many of the AFI grantees, works on development projects. Consequently, the Department of Housing also acts as a useful resource and aid for AFI and their grantees. The specific projects that both AFI and the Department of Housing have in common deal with development in poorer areas in the country, and both AFI and the Department of Housing reach out to a common group of people, and in several situations they have had to collaborate on the same projects.