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Financial justice nonprofit gets boost to expand services

Wednesday, August 23, 2023 by Chad Swiatecki

A local financial justice nonprofit group will be able to expand its services in Austin and around the state dramatically with a $250,000 grant from the Wells Fargo Foundation.

The banking giant’s gift will let Financial Health Pathways more than triple the number of participants in its I Save Texas! savings enhancement program and expand its efforts to lessen the financial and legal effects of misdemeanor crimes for low-income and marginalized people.

The grant, which was announced Tuesday at City Hall, is the largest award for the organization, which has received contract and grant funding from the city, as well as help from J.P. Morgan, the Michael and Susan Dell Foundation and Experian.

The nonprofit’s recent Boosting Financial Health report found that the high cost of living in Austin is creating challenges for many residents, with 84 percent of those surveyed in Travis and Williamson counties classified as financially vulnerable or coping with financial issues.

The report also found 70 percent of respondents experienced financial hardships during the Covid-19 pandemic, with many borrowing from friends or family and running up credit card balances to cover gaps, while others turned to payday loans or other high-cost borrowing tools.

Lourdes Zuniga, founder and executive director of Financial Health Pathways, said the high cost of living needs to be solved from many directions to improve quality of life for those at risk of going into debt or facing a hardship.

“There are those stressors of our city, of being one of the most expensive cities in the country. … We need to make sure that we have systems in place to get people to build their savings, reduce their debt and hopefully increase their credit score so they can have access to capital in a sustainable way,” she said. “The value of what we do is that we’re not just looking to do things on our own, but we’re looking to collaborate and innovate with other people.”

The group’s Financial Justice program has earned accolades from across the state and beyond for its work to educate local judges on ways to adjust punishments for minor offenses or dismiss them altogether. People who go through the program receive financial literacy training, as well as education on the long-term consequences of minor offenses like traffic violations.

Thus far, that program has resulted in the dismissal of more than 2,500 cases, with more than $700,000 in fees waived. Those numbers will increase with the group’s plans to expand its judicial training work across the state.

“We want judges to understand that being punitive doesn’t really get us anywhere, and sometimes we have to give people the opportunity to learn why they have to comply with certain things,” Zuniga said. “We are training judges on the importance of not looking at cases all the same way, because they are all different, and we work on how to help them address the minor cases that they don’t really need to spend a lot of time on.”

Chris Rios, vice president of philanthropy and community impact for Wells Fargo, said Austin’s median family income of just over $100,000 makes it the most costly area to live in the state. He said the pressures put on low-income residents – and even full-time public sector workers who want to live in the city – make it important to assist groups finding new ways to address financial instability.

“A lot about what we look at from the Wells Fargo Foundation’s perspective is not only the importance on financial education, but also how we can help drive asset-building initiatives, like how to build up people’s savings accounts or help people pay down their debt so that they can be in better financial positions,” Rios said, noting that the nonprofit’s report drew the attention of bank leaders as they were participating in roundtable discussions.

“(Zuniga) was already doing these great programs, and when she took the initiative to get the study done, it all lined up for us to say there’s something we can do with them,” Rios said.

Photo made available through a Creative Commons license.

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