Compass Working Capital

Compass Working Capital works to end asset poverty for families with low incomes and narrow the racial and gender wealth divides. By integrating asset-building opportunities into the provision of housing or welfare assistance, Compass has served 6,000 people who will collectively save over $20 million.

The Problem
Assets are a stronger predictor of financial well-being and economic mobility than income. Asset poverty, rather than income poverty, is the true measure of inequality in the U.S. Assets provide a cushion in times of economic distress and the capital people need to invest in opportunities that move families forward, such as education, homeownership, and small businesses. One in four U.S. households is considered asset-poor, which is nearly twice as high as the federal income poverty rate of 13%.

Despite the critical role assets play in supporting families to move forward, the opportunity to build assets is out of reach for many families with low incomes, particularly those led by Black and/or Hispanic/Latina women. Structural and systemic barriers deeply rooted in our nation’s history have stripped wealth from communities of color over time, contributing to a persistent racial wealth gap. Moreover, our nation’s anti-poverty programs have historically done little to support families with low incomes to build assets. Limitations in our housing and public welfare systems discourage and penalize savings, making it difficult for families to get ahead.

The Solution
Compass Working Capital operates client-centered savings and financial coaching programs, delivers training and technical assistance to other practitioners, and shapes policy solutions that dismantle barriers to asset building. In 2010, Compass launched a new asset-building model for HUD’s Family Self-Sufficiency (FSS) program — a promising but underutilized employment and savings program for families in HUD-assisted housing. There is no other anti-poverty program like FSS in the country. It is a “shovel-ready” and highly scalable program that integrates an asset-building opportunity into the provision of housing or welfare assistance. An estimated 2.2 million households could take advantage of the FSS program and Compass’ new model. The majority of these households are headed by women who are working or seeking employment while raising children, and a disproportionate share are Black and/or Hispanic/Latino. The program currently reaches only 3% of all eligible households.

Compass partners with public housing authorities and other affordable housing providers to deliver FSS. Their model combines the program’s powerful savings account with high-quality financial coaching and other asset-building strategies to drive stronger outcomes for participants. Compass is working to expand the scope and impact of FSS by operating high-impact programs directly with housing partners, field-building, training, and technical assistance for other FSS practitioners, and policy change. Compass is also assessing a transformative new “opt-out” approach to FSS which would allow eligible households to participate in FSS by default, with the choice to opt out of the program – effectively removing barriers that keep households from accessing the program.

Compass’ long-term vision for impact at scale is to integrate asset-building strategies into our nation’s social safety net and public welfare systems, beginning with families living in HUD-assisted public housing. Compass envisions a future where the opportunity to build assets is the norm and not the exception in our nation’s anti-poverty work.