Asset Building: Opening the Door to the American Dream for People with Developmental Disabilities

Dennis Rizzo¹

Americans ability to rise out of poverty has traditionally been built on the acquisition and sustenance of personal assets. While income from employment is often essential to maintain a quality existence, only the ability to save for the future and build long-term assets provide the security to rise above mere survival. Access to resources and opportunities are often based on personal assets- try getting a mortgage if you have no collateral or credit history.

People with developmental disabilities have long been excluded from the acquisition of assets, even when work and earnings were open to them. A new effort in New Jersey seeks to establish effective, long-term asset-building and personal financial management skills for people with developmental disabilities. Based on the asset-building efforts within welfare reform, this project brings saving and personal financial options to people with developmental disabilities.

Disability is an Economic Problem

Labeling certain exceptional behavior or conditions as disabilities allow society to normalize incapacity and have lowered expectations of people with disabilities. The person accredited as having a disability is excused from typical role performance and offered alternative means for securing income, care, rehabilitation or other services available to other members of society through non-specialized resources. As can be seen in many studies, being excused from typical societal role performances has come to mean being excluded from many of the social benefits that come with those role performances². When society provides for care there is a tendency to presume incapacity at all levels. When a person finds his or her own supports, there is allowance for individual direction and growth³. For many people with disabilities that need some level of support in order to live in the community, government services and benefitsí rules and regulations become a trap that prevents them for working and building assets.

In almost every country in which research has been conducted, people with developmental disabilities score lower than the average citizen in terms of social status, employment, income, and self-direction. With scores of initiatives and programs in place to right this situation, the question remains why there is a three to five times difference in unemployment rate in the USA and Canada among people with severe and developmental disabilities than the population without disabilities. European Union countries show similar numbers. Developing nations and former Soviet Union countries have even greater discrepancies⁴. In a speech before the European Union Disability Rights Commission Gerry Zarb was blunt about the economics of disability:

Supporting disabled people's participation and inclusion is becoming increasingly out of synch with the modernising aspirations that characterise the current political agenda. It might well be that disabled people have moved from being 'undeserving' to 'deserving' paupers in the slightly more benign 21st century manifestation of the Poor Law, but they remain paupers all the same⁵.
-Gerry Zarb

Wherever people with developmental disabilities are encountered in modern, industrialized social planning, their status tends to be at or near the bottom of the ladder. They are well established as deserving paupers, even among themselves. The cry for more and more government supports and entitlements, while may be justified, is merely another link in the chain binding them to a life of poverty. Those who succeed, in the traditional sense of the word for their culture, remain the exceptions.

Individuals with developmental disabilities are sustained at a bare minimum level of supports, as are older, retired people and relocated indigenous populations. The common theme is that these groups are no longer perceived to have value to the society. In the traditional cost-benefit thinking used at budget time, these populations are only as valuable as their ability to generate a power base for those assembling the budget. Far greater power is exercised by associations of professionals (e.g., teachers, social workers, unions)- those that are charged with caring for the welfare of so-called 'vulnerable' populations, with little control ever being relinquished to the individuals whose lives are directly affected.

Poverty has become the accepted mode of life for the majority of people with developmental disabilities in the United States and elsewhere. For a person receiving only Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), annual earnings fall far below the poverty level. Poverty, and the unavailability of personal assets with which to build alternatives to poverty remain the primary cause of disparity between people with and without disabilities. A culture of dependency- created by that very system committed to creating independence, haunts people with developmental disabilities far out of their representative proportion in the society⁶.

Historically, communities provided direct support to individuals or families in need, including those with members with a disability. Government replaced the historic efforts of local, grass-roots groups with a growing variety of services and supports delivered through agencies and organizations. Throughout the more recent movement from congregate care to community living, government resources were allotted to provider groups and agencies rather than to individuals or families.

The problem is that people with developmental disabilities who are dependent on the entitlement programs offered by government, never build that cache of personal assets required by our society to join in the game. They are forever held to a limited and subservient role. They are effectively barred from acquiring those resources required for them to reach escape velocity and move off public supports.

"While many individuals with disabilities are able to maintain steady employment, they rely on Social Security and Medicaid benefits in order to afford expensive medications and adaptive equipment such as wheelchairs and braces to support life. In turn, recipients of Social Security benefits risk the loss of government aid if their net worth exceeds $2,000. For this reason the social service system that is charged to support these individuals has neglected their financial literacy and reinforced behavior that has left an entire generation insolvent."⁷

The solution is inherent with recent consumer and family demands for far more individual control of resources. Where personal choice has been introduced into the mix of services, individual self-determination has been possible. The individual and his or her family must now take a role in planning personal supports and strength from which to negotiate for the public supports and assistance he or she requires. The new social service approach is individual choice and control, and individual responsibility.

In this new arena the individual must develop an abiding capacity to self-advocate as well as to build and manage personal assets- human and capital.

"In this new climate states are increasingly adopting a consumer-direction or self- determination approach that puts citizens and families in the driver's seat instead of providers. Independence Plus waivers and the Cash and Counseling demonstrations have been the more popular of these models. The social service network providers are still available as a choice to users of services but these users have additional options of their own choosing; many choose to train family and friends as their personal assistants."⁸

The socially legitimized designation of 'developmentally disabled' is, in and of itself, transparent in the sense that any person can make the effort to go beyond those role expectations assigned by society or family. The degree of assistance provided by typical social programs in helping an individual's self-direction are as varied as are the philosophies and agendas of those programs. Yet, the current trend allows for the individual to decide whether the role allotted by society is adequate or acceptable. The deciding factors in most studies have been education and economics. In their work on expectations and people with severe disabilities, Reif, Gerber, and Ginsberg⁹ position success and failure as conditions emanating from the personal, familial and/or societal perspective about the individual:

"An individual's growth and development can be predicted by the degree of control she maintains over the factors affecting her life. Control is mitigated or enhanced by factors outside of the individual, but can be engineered by individual decisions and actions. An individual can be taught to manage and apply degrees of control ñ and affect his outcomes."

The new service delivery models open the door to increased individual control and application of resources. Thus enters the New Jersey Individual Development Account [IDA] Program for People with Developmental Disabilities.

So What Can Be Done?

Building personal assets requires practice and an understanding of financial habits not typically provided to most people with developmental disabilities. While there have been recent efforts to improve the individual and family's control over service delivery, the missing element has been increased authority and education on how to manage finances. Limitations in earnings and assets have seriously restricted the experience in personal finances of this population. However, by applying the asset-building strategies of Individual Development Account Programs it is not only possible to build strength and ability, but to realize personal choice.

The Center for Social Development (CSD) at Washington University in St. Louis initiated studies and research on individual asset-building in the 1990's. The federal IDA program is a direct result of their work and the work of others in the delivery of this model. Some key findings about IDAs are relevant to this discussion¹⁰.

• Low-income families can save: The American Dream Demonstration (ADD), a 14-site IDA program, has proven that low-income families, with proper incentives and support, can and do save for longer-term goals. Participants accumulated an average of $700 per year including matches. Importantly, deposits increased as the monthly target increased, indicating that low-income families' saving behavior, like that of wealthier individuals, is influenced by the incentives they receive.
  
• Financial literacy creates savers and savvy consumers: Key to the success of IDAs is the economic education that participants receive. Information about repairing credit, reducing expenditures, applying for the Earned Income Tax Credit, avoiding predatory lenders, and accessing financial services helps IDA participants to reach savings goals and to integrate themselves into the mainstream economic system.
• Assets change lives: More than income enhancement, asset accumulation affects individuals' confidence about the future, willingness to defer gratification, avoidance of risky behavior, and investment in community. In families where assets are owned, children do better in school, voting participation increases, and family stability improves. Reliance on public assistance decreases as families use their assets to access higher education and better jobs, reduce their housing costs through ownership, and create their own job opportunities through entrepreneurship.
• Communities benefit from homeownership, entrepreneurship, and educational attainment: Twenty-eight percent of ADD "graduates" bought a home, 23% started or expanded their own business, and 21 % pursued higher education. The rest used their savings for home repair, job training, or retirement. This represents a substantial investment in low-income communities and a significant stabilizing effect on the local economy.

There is evidence from IDA initiatives that poor people, with proper incentives and supports, will save regularly and acquire productive assets. For example, 2,364 low-income families participating in the American Dream Demonstration had accumulated $36,481,498 (including matching funds) as of December 2001. Monthly deposits typically ranged from $30-$75 per month. Also, research summarized by the Center for Social Development (CSD) demonstrates many beneficial aspects of having assets:

• They promote economic household stability and educational attainment
• Decrease the risk of intergenerational poverty transmission
• Increase health and satisfaction among adults
• Increase local civic involvement

The New Jersey Council on Developmental Disabilities saw the potential for IDA methods in bringing more choice and participation into the lives of people with developmental disabilities. The Council initiated an effort in 2004, in collaboration with the NJ Department of Community Affairs, to build on the TANF model and open personal asset-building opportunities for people with DD. Allies-NJ, Inc., a provider of many community-based services, including small business and social enterprises, was selected through a bid process to develop the pilot. Allies established a small group savings effort initially to complement personal financial education and provide practical experience to people with cognitive and other learning disabilities. As Krystal O'Dell, Executive Director of Allies notes,

"Success of Saving (SOS) acts as a structured savings vehicle for program participants that encourages monetary literacy through mandatory Financial Literacy Education coursework. The program offers matched savings accounts similar to Individual Development Accounts (IDAs) to provide an incentive for attending and completing Financial Literacy Education coursework. The savings accounts for the SOS program are held jointly between Allies, Inc. and the enrollee. Because Allies, Inc. acts as the corporate fiduciary of these accounts, funds deposited into these joint accounts are ineligible for consideration of Social Security benefits."¹¹

Success of Savings (SOS) is based on providing financial literacy education and personalized supports as a prerequisite of joining a formal savings club. Each member must attend financial education classes, which are taught by representatives of several local and regional banks. Members also must work with a counselor to establish a personal savings goal. In the SOS level, the goals are often personal, such as a television or a vacation- things most of us save for and take for granted. For many of the members the idea of saving for the future is foreign- the protocol has been 'spend as soon as you get before you lose it' for so long.

When you complete the SOS effort, you have the option of joining the Individual Development Account Program for People with Developmental Disabilities. The personal goals here are dictated by federal law and must include education, employment or home ownership. Employment can be for tools and training or for self-employment.

"Unlike other subsidized savings accounts such as Individual Retirement Accounts (IRAs) or 401(k) plans, IDAs promote the value of saving by providing matching funds rather than tax breaks for its beneficiaries."¹²

Savings are limited to $2,000 as with SSI, but the 1-1 or even 2-1 match means you have that much more to work with toward your personal goal. The savings club allows you to receive matching funds for money you set aside from earnings; current Federal guidelines only allow 'earned income'- not SSI or SSDI to count as an individualís contribution. The match funds are not your assets until you use them but ARE reserved for your exclusive use. You may withdraw at any time, losing only those match dollars.

The attractiveness of this approach is that it has been accepted as a legitimate process by the Social Security Administration and buys into the federal Assets For Independence Act (AFIA) Legislation creating the IDA program for low-income individuals. It acknowledges that disability is often an economic issue more than a social issue, and building personal assets is an essential process to removing yourself from systemic dependence.

AND? -- WHAT NEXT?

Individual states have programs designed around the AFIA regulations. Usually these are located within the agency that deals with TANF or other low-income populations. Building an IDA effort for people with developmental disabilities requires:

1. Locating or developing a community-based organization which has the ability to interact with the banking community and consumers of services on equal footing;
2. Building a working relationship with the existing financial literacy programs- they already have the wheel, you donít need to reinvent it;
3. Building a working relationship with financial institutions, which usually are the providers of the financial literacy training, and assist them in adapting the curricula for your target population;d. link with and involve housing, small business, and employment resources, including the Social Security Administration's benefits planning specialists in your area;
4. Do your homework- know the regulations in your state, who the players are, and what already exists that you can link to;
5. Work with your state DD agency or DD Council to seek matching funds for a start-up effort (a savings program), then build your resources from the banking community as you build your experience and reputation;

And, be creative and remember that you're not just thinking outside of the 'box', the 'box' is no where in sight. Getting people to realize that they CAN get off the system is the hardest part of this. Working gradually, building personal confidence and short-term results, provides incentive for people to strive for greater independence.


1 About the Author:
Dennis Rizzo has been working in the field of disabilities since graduation from Rutgers College in 1973, with a few years here and there spent running a nonprofit, developing a disability-focused business loan fund and working in the marketing field. His interest over the past twenty years has been in employment and self-employment and the factors that determine whether a person with developmental disabilities becomes truly independent. He works as planner and manager of grants for the NJ Council on Developmental Disabilities and has presented at many conferences and workshops.

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