As an asset-building and economic self-sufficiency program for underserved populations without access to conventional financial resources, Ways to Work helps families move off and/or stay off of welfare and other public assistance programs. Instead of handouts, it provides families a helping hand-up toward a more stable financial future.
Program Background
The concept for what is now Ways to Work came out of a series of discussion forums in the greater Twin Cities area of Minnesota with several women who were leaving welfare and striving to become self-sufficient. Conducted in the early 1980’s by the McKnight Foundation, the theme for these discussions was to identify the types of support needed by these families to help move them beyond their cycle of poverty and public dependence. The overwhelming message was a call for temporary financial resources (loans) to help with unexpected expenses that might cause them to drop out of the workforce. These mothers were not looking for another handout; they wanted the dignity of paying back these temporary infusions of cash.
As a result of this investigation, the McKnight Foundation established loan funds at a number of human service agencies around the Twin Cities metropolitan area. The Single Parent Loan Program marked the beginning of the development of the Ways to Work model. The original loan program’s successes and challenges provided the experience necessary to refine and improve the program over the years.
In 1996, the program was entrusted to the Alliance for Children and Families to replicate nationally. Known as the Family Loan Program, the first loan offices were established outside of Minnesota, hosted by the human service agencies that comprise the membership of the Alliance.
In 1998, due to the early success and continuing promise of the program, the Family Loan Program was separately incorporated as Ways to Work and given the charter of a ten-year demonstration program. The operating model was further refined and Ways to Work continued the process of replicating the program across the United States.
At the end of a comprehensive strategic planning process and internal program evaluation, the Board of Directors voted in the spring of 2004 to consider the demonstration program at an end and began the process of converting Ways to Work to a more sustainable business model.
The Work of Ways to Work
The overarching aim of Ways to Work is to reconnect our clients and their families with the hope and growth embodied in “The American Dream”. For too many people, economic challenges and financial realities have dashed any hope of significantly improving their lot in life or that of their children. Ways to Work is designed and operated to restore that hope.
This work is not accomplished overnight. There are several intermediate steps. Our program criteria help us to identify people who have demonstrated the will and preparedness to move ahead. Ways to Work does everything possible to avoid making loans to individuals that are not yet ready for the responsibilities that come with a loan. We hope to prevent these individuals (and families) from being set up for failure and further credit damage.
Everyone participating in the application process is provided an opportunity to realistically assess where they are today, in straight-forward financial terms, and where they could be in just a couple of years. The cornerstone of this phase is the development of a monthly family budget.
About 95% of all Ways to Work loans are made for the purchase of used vehicles. While many of us view our cars as depreciating assets, Ways to Work clients have a different view. Their car is an earning asset, a critical piece of their family’s operating equipment. They know that with it, their earning power and personal freedom goes up and their living expenses go down.
Understanding that expenses go down may be counterintuitive until you live without access to a vehicle. Without a car: you shop for food and other household needs at nearby convenience stores rather than supermarkets; you pay per-minute late fees at childcare providers when your bus runs late, and any number of other expenses we normally wouldn’t consider. All of this is captured during the budgeting process.
Our clients are provided with financial literacy training to help them to better understand the world we live in and the economic impact of their decisions. Because nearly all of our clients have severely damaged credit, much focus is given to credit repair strategies and techniques.
The real work of Ways to Work, however, begins with origination of the loan. For two years our clients are held accountable for their loan commitments. They are expected to make all of their payments, in full and on time. If they run into difficulties, they are expected to work proactively and honestly with their loan officer. If they don’t, their loan will be called and their car repossessed. This is a very rare occurrence since Ways to Work borrowers understand the value of the vehicle associated with their loans.
Ways to Work provides significant assistance to make our clients successful, but all within the context of the financial real world. The primary goal of the program is that our borrowers function successfully on their own after their experience with Ways to Work comes to an end.
Program Model
As the national headquarters and program replicator, Ways to Work, Inc. is located in Milwaukee, Wisconsin. Its role is much like that of a concept franchisor except that Ways to Work is able to also provide loan capital in addition to business plans and materials, custom business software, and program implementation counsel and oversight. Plus, Ways to Work performs this role without charging any kind of franchise fee!
The model calls for a member agency of the Alliance for Children and Families to host each loan office. This means that a local human service agency is providing the staff, office space, supervision, as well as operational and loss reserve funding. Even though each office is a part of a national network, they are local programs in every important sense.
The loans are marketed and applications processed by the local Ways to Work staff. Once an applicant has met all program criteria and supplied the necessary information, the credit decision is made by a local, volunteer loan committee. Each decision is based on the applicant’s character as revealed during the application process and presented by the loan officer. In short, it boils down to whether the loan officer, and consequently the loan committee, believes that the applicant will pay back the loan as required.
Once approved, the loan is actually originated at the loan office with state compliant documents provided by the national headquarters. This process maintains a single point of contact, in that the person who helped the applicant through the application process is the same person who helps them through closing and repayment. Local offices are supported and loans are serviced by the national office staff that is intimately familiar with the program and borrower needs/issues, and is vested in their success.
Learn More!
We invite you to learn more about how Ways to Work can make a meaningful difference in your community and for your organization. Please contact the WtW Business Development Group toll free at (866) 252-7171 or by email at bizdevelopment@waystowork.org.
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