So Your Credit Union Wants So Your Credit Union Wants to Participate in VITA to Participate in VITA Outreach: What Does that Outreach: What Does that Mean?Mean?

REAL SolutionsREAL SolutionsVolunteer Tax Assistance Volunteer Tax Assistance

Programs (VITA)Programs (VITA)Nancy Pierce Nancy Pierce –– Field CoachField Coach

June 22 – How can state leagues and foundations assist Cus with VITA Outreach – Archived at: http://www.realsolutions.coop/resources/webinars

Today – So your credit union wants to participate in VITA outreach: What does that mean?August 17 – Complementary products to a VITA operation

3 RS VITA Webinars

Today’s Participants:

Brian Zapf, Alternatives Federal Credit Union

Ellen Murtha, Santa Cruz Community Credit Union

Jennifer Sierecki, North Side Community Federal Credit Union

What is VITA?

Volunteer Income Tax Assistance

Is an IRS program that offers free tax help to those who qualify – generally $49,000 and belowIRS certified volunteers help with tax preparationHelp with special tax credits – Earned Income Tax Credit, Child Tax Credit, Credit for the Elderly or the Disabled

Brian Zapf

Alternatives Federal Credit Union

Ithaca, NY

www.alternatives.org

Linking VITA to Linking VITA to Asset Building Asset Building

& Financial & Financial Opportunity Opportunity

Community Tax Community Tax ProgramProgram

Profile of UnbankedProfile of UnbankedLow Household incomeLow Household incomeRentRentYounger ageYounger ageImmigrantImmigrantMinorityMinorityLow Income neighborhoodLow Income neighborhoodLess educatedLess educatedUnemployedUnemployedLarger familyLarger familyHigher cost services (lower Higher cost services (lower savings)savings)

WhatWhat’’s the Earned Income Tax Credit?s the Earned Income Tax Credit?

Intended to support working families, rewarding Intended to support working families, rewarding work especially for peoplework especially for peoplewith limited incomes with limited incomes and childrenand children

It first started in 1975, It first started in 1975, expanded since thenexpanded since then

ItIt’’s now the federal benefit that brings the most s now the federal benefit that brings the most US families out of poverty!US families out of poverty!

More about the EITC:More about the EITC:

EARNED INCOME TAX CREDIT = MONEY in EARNED INCOME TAX CREDIT = MONEY in the pockets of working people, but ONLY if the pockets of working people, but ONLY if they file a tax return!they file a tax return!

The EITC lifts more people out of poverty than The EITC lifts more people out of poverty than any other government program.any other government program.

Single parent of two children earning $12,500 Single parent of two children earning $12,500 ––$16,500 is eligible for the maximum refund of $16,500 is eligible for the maximum refund of $5,657 $5,657 a 34a 34--45% increase in the family45% increase in the family’’s s income!!!income!!!

Get extra credits: Federal & Empire Get extra credits: Federal & Empire State Child Tax CreditState Child Tax Credit

For parents raising children under age 17 For parents raising children under age 17 Federal credit worth up to $1,000 per Federal credit worth up to $1,000 per qualifying childqualifying child

State credit is also State credit is also available for qualifying available for qualifying children children (different criteria apply)(different criteria apply)

Get extra credits: Get extra credits: Child & Child & Dependent Care Tax CreditDependent Care Tax Credit

For parents who use child care for children For parents who use child care for children under age 13 while they work, look for under age 13 while they work, look for work, or go to schoolwork, or go to schoolFederal credit worth Federal credit worth up to 35% of child care up to 35% of child care expensesexpensesNY State credit worth up to NY State credit worth up to 100% of the federal amount is a 100% of the federal amount is a Refundable CreditRefundable Credit

The ProblemThe Problem-- You can only You can only get these credits if you file. And chain get these credits if you file. And chain

preparers target these returns for:preparers target these returns for:

RALs - Refund Anticipation Loans

$1.75 Billion Diverted Annually

Charged at Interest Ratesof 64% - 1000%

What a scam!

Our SolutionOur Solution$ 0$ 0 = The cost of preparation with us= The cost of preparation with us

$ 0$ 0 = The cost for e= The cost for e--filingfiling

$20$20 = Refund Express Fee= Refund Express Fee

$10$10 = The average interest paid= The average interest paid

70+70+ = The number of volunteers= The number of volunteers

And a Growing Coalition: United Way, Day Care Council, Lifelong RSVP, Cooperative

Extension, Tompkins Cortland Community College, Department of Social Services, Ithaca College, Red Cross,

United Auto Workers, Towns of Dryden and Caroline

Thanks to our community partnersThanks to our community partnersHuman Services CoalitionHuman Services CoalitionThe WomenThe Women’’s s

Opportunity CenterOpportunity CenterTCATTCATEvenstartEvenstartBOCESBOCESCornell Translator Cornell Translator Interpreter ProgramInterpreter ProgramUnited AutoworkersUnited AutoworkersThe Corporation for The Corporation for National and Community National and Community ServiceServiceTompkins 211Tompkins 211IRS (SPEC)IRS (SPEC)Catholic CharitiesCatholic Charities

Ithaca College School of Ithaca College School of BusinessBusinessCornell Public Service Cornell Public Service CenterCenterTompkins Learning PartnersTompkins Learning PartnersThe New York Makes Work The New York Makes Work Pay CoalitionPay CoalitionLifelong RSVPLifelong RSVPOAR IthacaOAR IthacaLatin American Civic Latin American Civic AssociationAssociationTown of DrydenTown of DrydenBrooktondale Community Brooktondale Community CenterCenterIraqi Refugee Assistance Iraqi Refugee Assistance Connection of IthacaConnection of Ithaca

Thank You to Our Sponsors Thank You to Our Sponsors

United Way of Tompkins CountyUnited Way of Tompkins CountyTompkins Trust CompanyTompkins Trust CompanyHSBCHSBCUnited AutoworkersUnited AutoworkersCornell Sunshine Lady FoundationCornell Sunshine Lady FoundationThe Corporation for National and The Corporation for National and Community ServiceCommunity Service

Benefits All AroundBenefits All Around

8600+8600+ = Returns completed in 8 years= Returns completed in 8 years519519 = New credit union members in 8 years= New credit union members in 8 years

$150$150 = Average fee savings for filers= Average fee savings for filers$150$150 = Average additional savings for filers with = Average additional savings for filers with

Refund ExpressRefund Express$1.2 million+$1.2 million+ = Preparation and loan fees avoided= Preparation and loan fees avoided

$14.7 million+$14.7 million+ = Refunds claimed in 8 = Refunds claimed in 8 yearsyears

Our Clients TY 2009Our Clients TY 2009

1,5471,547 Number of clients servedNumber of clients served

$2,815,130 Amount of federal refunds$2,815,130 Amount of federal refunds

$3,533,179$3,533,179 Dollar amount of all refundsDollar amount of all refunds

$255,255 $255,255 Total cost to clients if they Total cost to clients if they had each paid $165 to have their had each paid $165 to have their taxes prepared. taxes prepared.

Not Just Free Tax Prep: Not Just Free Tax Prep: Opening That AccountOpening That Account

Free Direct Deposit into any accountFree Direct Deposit into any account

CU Membership CU Membership –– $10 One Time Fee$10 One Time Fee

$5 Initial Deposit ( all Fees are waived until the $5 Initial Deposit ( all Fees are waived until the refund arrives)refund arrives)

Fresh Start Checking AccountsFresh Start Checking Accounts

LowLow--Cost Refund Express LoanCost Refund Express Loan

31% of our new VITA members had been unbanked, 3 times as many as our general membership

Refund Express LoanRefund Express LoanDraws taxpayers to the program and away from predatory lenders; saves them hundreds in fees.Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed.Extremely safe loan if simple procedures are followed.An open door to the world of productive creditA great opportunity to repair or build a credit history.

Refund Express LoanRefund Express LoanDraws taxpayers to the program and away from predatory lenders; saves them hundreds in fees.Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed.Extremely safe loan if simple procedures are followed.An open door to the world of productive creditA great opportunity to repair or build a credit history.

Refund Express LoanRefund Express LoanDraws taxpayers to the program and away from predatory lenders; saves them hundreds in fees.Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed.Extremely safe loan if simple procedures are followed.An open door to the world of productive creditA great opportunity to repair or build a credit history.

Loan LossesLoan Losses

Program Inception to date: $0Program Inception to date: $0

Administrative ExpensesAdministrative Expenses

Covered by $20 fee paid by borrowersCovered by $20 fee paid by borrowers

Refund Express LoanRefund Express LoanDraws taxpayers to the program and away from predatory lenders; saves them hundreds in fees.Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed.Extremely safe loan if simple procedures are followed.An open door to the world of productive creditA great opportunity to repair or build a credit history.

Taxes are niceTaxes are nice……

……but but asset building asset building is the keyis the key

Refunds to AssetsRefunds to Assets

Like Getting Your Taxes Done for Free?

You’ll LOVE What Else We Can Do for You!

Additional Resources and Additional Resources and Contact InformationContact Information

Public information on our website, Public information on our website, www.alternatives.orgwww.alternatives.org/refundexpress.html/refundexpress.html

Brian Zapf, Community Tax Program Brian Zapf, Community Tax Program Director, Director, bzapf@alternatives.orgbzapf@alternatives.org

607607--216216--34593459

Santa Cruz Community CU Free Tax Return Preparation (Earned Income Tax Credit) Program

Tax refunds and credits that benefit your members, your potential members, and your credit union

Mission and Structure

Mission: Santa Cruz Community Credit Union is a nonprofit financial cooperative that promotes economic justice.Santa Cruz Community Ventures: a 501(c)3 public benefit corporation, an affiliate of the Credit Union

Who We Are

Founded in 1977Community Development Credit Union; CDFI with NCUA low income designation. Serve low- and moderate-income communities in Santa Cruz and north Monterey Counties in CA$82MM in assets, 10,000 members

Why SCCCU Offers Free Tax Assistance

EITC brings federal and state funds into the community Significantly increases income for low-income working familiesResidents spend many of these refund dollars at local businesses, which create more jobs

The Credit Union Connection

Provides an incentive to “unbanked”and a link to financial products, services, and asset building knowledgeEducates low-to-moderate members of ‘work supports’ like EITC, that can benefit themPromotes and establishes long-term relationships with the credit union

Earn it, Keep it, $ave it!

SCCCU began offering financial education at Volunteer Income Tax Assistance sites in 2004With partners, we had 19 sites this last tax season. We operate 3 bilingual tax sites ourselves – one at CU branch, in addition to other ad-hoc sitesPrivate and government grant funds support a PT program coordinator; who is certified to do taxes (certification is easy)

Outreach Message that All Appreciate

VITA and EITC are our government at its best. Elected representatives are pleased to promote thisEven the “compassion-fatigued” can appreciate that this service is for people who earned incomeThe cost effectiveness of volunteers is something the whole community can cheer on

Outreach Materials and Concepts are Already Available

Free ideas and reproducible P.R:The National Community Tax CoalitionThe IRS/SPECThe Center on Budget and Policy Priorities

The airwaves are public and assessableGet listed on 2-1-1 and 800 phone lines as well as service databases

Outreach continued

Only limit to outreach is your time and resources (and your partners!)The challenge of outreach is people have be bombarded by messages and advertisingReaching the low-to-moderate income, other language, or immigrant populations requires skill

Outreach – a final word

Word-of-mouth is what people say about how they heard of usMust have multiple methods for generating word-of-mouth (community agencies, radio, banners, newspapers, handouts…)When we serve people well, they tell their family, friends, co-workers

VITA Sites reach people who can benefit from assistance

Partner agencies offer other ‘work supports’ such as Food Stamp applications and children’s health insuranceWe partner with family resource centers, the county public assistance, early childhood education organizations, the United Way and other service providers Utilize university student interns + community for trained volunteers

Earn it, Keep it, $ave it, continued

Offer bilingual/bicultural onsite financial education, account opening, tax refund splitting, and direct depositLink with asset building opportunities (savings, IDAs)Partners leverage county-wide impact of program, allow expansion of service

How to get involved

Develop free tax preparation program, or,Partner with local organizations offering free tax assistance by:

VolunteeringOpening accounts, financial educationPromote EITC info and local tax site information to your members

Either way, find partners first

Why Credit Unions?

People helping people philosophyBenefits members financiallyCredit unions offer a critical link to financial products and servicesEffective public relations and marketing opportunity

Need More Reasons?

Builds trust and positions the CU as a place to go for information, education and financial servicesSCCCU has received local recognition from the elected representatives, the Volunteer Center and the United Way. SCCCU has received funding that recognizes we our asset building

The Numbers

SCCCU filed 509 returns, with partners 1,765Refunds of $730,634 for 2009 tax year, with partners $1,844,655 Average EITC return = $1,839Estimate program saved over $101,800 in tax return preparation fees, with partners $321,600

The Numbers, continued

Refunds = 13% annual income increase 11% ‘unbanked’ opened accounts56% used direct deposit – which is a tool to defeat Refund Anticipation LoansFinancial education offered in concurrent classes, handouts and referralsBetween 1/3 – ½ intended to save some of the refund (depending on site)

Resources

REAL Solutions (www.realsolutions.coop)National Community Tax Coalition (www.tax-coalition.org)IRS SPEC(http://www.irs.gov/individuals/article/0,,id=119374,00.html) or (www.irs.gov) The Aspen Institute – Economic Opportunity Program (www.aspeninstitute.org)

QUESTIONS?

Contact Information:Ellen F. MurthaCommunity Development and

Outreach Program ManagerSanta Cruz Community Credit Union(831) 460-2345ellen.murtha@scruzccu.org

NORTH SIDE COMMUNITY FEDERAL CREDIT UNION

So Your Credit Union Wants to Participate in VITA Outreach: What Does that Mean?

July 27, 2010

Jennifer Sierecki

Manager

773-769-5800 x.227

j.sierecki@northsidecommunityfcu.org

• 36 year-old community development credit union• Low-income designated by NCUA• Certified as a Community Development Financial Institution (CDFI) by the

U.S. Treasury– $9 million in total assets and over 3,000 members– Partners with 42 employers with over 7,000 employees

• History of serving people who are not using mainstream financial institutions• History of innovative products – Payday Alternative Loan, VITA, New

Americans Loan Program, Housing Counseling

North Side Serves Chicago Communities

History of VITA Services• Partnership with Center for Economic Progress (CEP)

– In 2004, North Side began its partnership with CEP, one of the largest VITA organizations in the country.

– CEP provides marketing materials, equipment, supplies, a small food budget, volunteers, and site managers. North Side rents additional space in the building for intake, provides additional food for the volunteers, and has staff oversee the site.

– For year one, North Side hosted a site for one evening a week, scheduling appointments for members and SEG employees.

– Year three of the VITA site, North Side opened the site for two evenings, one evening still reserved for members and SEG employees, the other evening open to the community.

– In 2009, North Side’s VITA site expanded to three evenings.

History of VITA Services (continued)

• North Side Staff and Marketing Responsibilities– Initially, one North Side VISTA intern and one staff member

were certified by CEP to prepare taxes and in site management procedures.

– Currently, one North Side staff person is certified each season, schedules appointments, and oversees the site.

– North Side harnesses its relationships with SEGs and other partners to promote VITA services via payroll stuffers, newsletter blasts, event postings.

VITA Site Returns

196 269 286572 573 813 660

3369

0500

1000150020002500300035004000

03 TaxYear

04 TaxYear

05 TaxYear

06 TaxYear

07 TaxYear

08 TaxYear

09 TaxYear

GrandTotal

Num

ber o

f Ret

urns

VITA Site Refunds

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

Total $179,205 $317,813 $408,365 $729,978 $791,658 $1,182,486 $1,093,915 $4,703,420

03 Tax Year

04 Tax Year

05 Tax Year

06 Tax Year

07 Tax Year

08 Tax Year

09 Tax Year

Grand Total

• During its VITA history, North Side has been able to return over $4 million dollars to the community and save over 3,000 individuals and families a minimum of $387,435 in tax preparation fees.

• This savings does not include what clients would have paid for a RAL or refund check cashing fees. In 2002, over one-third of residents receiving EITC funds in three of North Side community areas (Rogers Park, Uptown, and Edgewater) used RALs, and paid a total of $1,108,808 in fees.

Helping the Community Save

Why VITA?Up to 5% of the wages employers paid to some workers was spent at Currency Exchanges, Payday Loan stores, and other fringe financial service providers*

•$660 annually ($110 for tax preparation, $150 RAL, $400 for Currency Exchanges, Payday Loans and other financial service providers) for an individual earning $7.50 per hour

• Low income individuals and families save with free tax preparation

– Paid preparers charge $110+ for a service that a trained volunteer can provide in one hour

– Refund Anticipation Loans (RALs) cost $150+ to advance a refund that could be directly deposited to a credit union account in two weeks through the VITA site.

– Many working families might not file otherwise – forfeiting money they have earned.

• Members, SEGs, and partners value the service– Members return year after year and continue to save their refunds

with the credit union.• Excellent Outreach to Potential New Members

– Come in for the free service and take advantage of other products and services.

Lessons Learned• A VITA site is no small undertaking

– Keep in mind that staff time dedicated to the VITA site takes away from other credit union objectives, but is a great way to serve your membership and recruit new members.

– You will have individuals come into the credit union throughout the day and sometimes throughout the year with tax questions, even if your site is not open.

– Our site operates during the evening hours, so staff at the time work unconventional hours and may not be able to assist members during credit union hours.

• Determine if a VITA site is right for your credit union– Does a percentage of your membership fall within the VITA

income guidelines?– Do your current SEGs and partners have employees or clients that

fall within the VITA income guidelines? – While clients that open account during VITA services will have

their refunds direct deposited into the credit union, there is a high probability that many will end up as low balance accounts.

Lessons Learned (continued)• Start outreach early

– Coordinate payroll stuffers and poster displays at SEGs and other partners in December to get people before they get their W-2s.

– If you decide to make appointments, start making scheduling appointment in early January for services in late January.

• You are only as good as your partner(s)– Be aware that there are only some things out of your control, such

as volunteers, still represent the credit union. – Make sure to keep open lines of communication.

• Foster an environment to retain good volunteers– Keep the volunteers happy, so they come back every week and

hopefully next year! • Keep the VITA clients happy

– So they come back next year and not to a paid preparer. • Develop complementary products

– To keep members active with the credit union, we created two products to help them grow their savings at tax time, a refund reward CD and a match refund account.

• If you are interested hosting a site for a partner, contact your local VITA organization early to begin conversations and to determine their process for adding on new sites and partners. After April 15th is ideal.

• If you want to start a site on your own, get to know your local IRS SPEC representative ASAP.

• Explore grant support available through the IRS and other channels, this will help to determine when to start your plans.

Timeline for Implementation

Summary Themes

Importance of PartnershipsHelping the CommunityOutreach to Lower Income FamiliesKeeping More Money in Consumers’ Pockets

Ways to Participate

Provide information about EITC and local VITA siteVolunteer at a siteHost a siteBecome a certified tax volunteerOpen accounts, offer financial educationOffer Refund Express Loan

Save the Date

August 17, 3 pm EDT – Complelmentary Products to a VITA OperationNancy Pierce, REAL Solutions Field Coach: piercen@kcnet.comQuestions?