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Opportunity Passport™ Savings Program Helps Young People Achieve Their Dreams
Eugene Harvey, 21, of Atlanta has been cutting lawns since he was 13. By using borrowed or handed-down mowers and catching rides to his job sites, he earned his own pocket money during high school and now supports himself while attending college.
In March, Eugene took his business to the next level by purchasing brand-new tools: a riding mower, a push mower, an edger, a chainsaw, assorted hand tools, and a trailer on which to cart his equipment around. The bill for the equipment came to $4,020, an amount he could never have afforded on his own. But because Eugene holds an Opportunity Passport™, a promising new financial tool developed by the Jim Casey Youth Opportunities Initiative, he received a grant of $3,000 to match the $1,000 he had saved himself.
"Without the Opportunity Passport™, I couldn't have done any of this," Eugene says. "I am so thankful."
Eugene, a junior majoring in education at Georgia State, is one of about 800 young people who have qualified for an Opportunity Passport™. The Passport is a personal empowerment and asset-building tool that is being tested by young people in a dozen places around the country. The Jim Casey Initiative has provided seed money to the local community organizations that are administering the Passports.
The Opportunity Passport™ is available to young people ages 14 through 23 who were in foster care at age 14 or older. It is designed to aid their transition to independence. Each year, about 20,000 young people "age out" of the foster care system, usually when they turn 18. Overnight, most lose their housing, medical insurance, and any semblance of a family. The Jim Casey Initiative believes that the Opportunity Passport™ will help these young people become financially literate, save money, and gain access to opportunities that will improve their circumstances.
The Opportunity Passport™ has three components:
- A debit account, which the passport holder can use to pay immediate expenses. Many former foster youth can't afford the fees attached to conventional bank accounts, and the debit account provides them with a relationship with a mainstream financial institution.
- An Individual Development Account (IDA), a matched savings account in which each $1 the Passport holder deposits is matched by a ratio of 1 to 1 or 1 to 4, depending upon the site and the purpose for which the savings are to be used. Each Passport holder must complete a financial literacy class, after which he or she receives a $100 grant to open the account.
- Door Openers, a set of special opportunities negotiated locally and designed to expedite access to resources and services like employment training, housing subsidies, low-cost health insurance, and mentoring relationships.
The Opportunity Passport™ is currently available to young people in Atlanta, Denver, Des Moines, Detroit, a ten-county area of Northern Michigan, Hartford, Jacksonville, Kansas City, Nashville, and Portland, Maine. Passports will soon be available in San Diego, San Antonio, Providence, Indianapolis, Tampa, and Oakland. By the end of 2006, the Initiative expects 2,000 young people to hold Opportunity Passports™.
The first Opportunity Passport™ was issued just under two years ago, so most Passport holders are still in the saving phase. However, several dozen have withdrawn their savings and claimed their first (and in a few cases, second) matches. In most sites, passport holders are entitled to a match of $1,000 a year, although the Atlanta site provides a 3-to-1 match (capped at $3,000 a year) for business-related purchases and a 4-to-1 match (capped at $4,000 a year) for the purchase of a home.
The match money may only be used for specific purposes. Here are some examples of how young people are using their matched savings:
- Business Development. With only an old electric push mower, Eugene Harvey could only cut about six lawns a week, which limited his ability to support himself. With the new equipment he purchased with his savings and match, he hopes to begin to add new customers. Metropolitan Atlanta Youth Opportunities Initiative (MAYOI), the Jim Casey Initiative's partner in Atlanta, also provided him with small business management training that helped him plan his business' growth. "I've made some business cards, and I drew up a business plan," Eugene says. "I'm planning to put up some flyers at my church because there are a lot of older people who probably need someone to keep their yards up."
- Education. Young people in several sites have used their savings and matches to pay for textbooks, school fees, and tuition. After her computer gave out, Teraseta Sherrod, a nursing student at Western Kentucky University, used her savings and match to buy a new one. In Des Moines, a 20-year-old used $500 in savings and his $500 match to pay the first installment of tuition at a truck-driving school. In Detroit, Mona Perdue, a student at University of Detroit-Mercy used her savings and match to buy textbooks.
- Housing. Quite a few passport holders have used their savings and matches for security deposits for housing. Just a few days before he and his pregnant fiancé were to lose their housing, Salazar Sanchez, 21, of Traverse City, Michigan, used $300 in savings and a $300 match to pay the required deposit for a cabin. "Without the match, we would have been short," he said.
Sidney Bynum, 22, a certified nurse technician and college student in Nashville, is using her IDA to save for a down payment on a house for herself and her brothers. "I've already got almost $1,000 saved, and my goal is $3,000," she says. With the $1,000-a-year match, she could have $6,000 in three years. In Atlanta, MAYOI has negotiated a 4-to-1 match for savings for home purchases and arranged for several Opportunity Passport™ participants to take a home ownership training course offered by the Urban League, which will qualify them for a locally negotiated 4-to-1 match.
- Transportation. Many former foster youth live in areas that are poorly served by public transportation, so a car is a necessity rather than a luxury. Kimberly Plam of Detroit used her $1,000 in savings and $1,000 match as a down payment on a 2001 Chevy Malibu. Without a car, Kimberly said, it would have been impossible to travel between Wayne State, where she's a full-time student, and the Detroit suburb where she has a full-time job at a bank.
In Atlanta, Eugene Harvey used the first $1,000 he saved to qualify for a $1,000 match to buy a '94 Ford Ranger pickup to get between lawn jobs. And in Kansas City, an 18-year-old used his savings and match to pay for insurance on a car that enables him to get to work and school. Without a car, he would have had to change high schools just months before graduating.
- Health Care. Many young people lose their health insurance when they age out of foster care, except in the handful of states that provide Medicaid coverage until they turn 21. In Des Moines, a 17-year-old passport holder has used her savings and match to pay for braces for her teeth, which Medicaid wouldn't cover. In Atlanta, Passport holders have the option of using their accounts to purchase low-cost health insurance from Kaiser Permanente.
- Investments. In Nashville and Detroit, several young people are working with financial advisers to choose the best long-term investment for their matched savings.
Although still in its infancy, the Opportunity Passport™ is already changing the lives of many young people, noted Gary Stangler, executive director of the Jim Casey Youth Opportunities Initiative. "The community partners have really stepped forward," he said. "By supporting the Opportunity Passport™, they are improving the chances that the youth aging out of care in their communities will become productive adults."
