Asset Building: A Means to Ameliorate Intergenerational Poverty in the Mississippi Delta
The Mississippi Delta (the Delta) is a region of persistent income inequality and pervasive intergenerational poverty. Several counties have sustained a poverty rate of 20 percent or higher for more than five decades. Current data show that more than one-quarter of families and over half of children under the age of 18 live in poverty. (See Table 1 below.) The Center for Community and Economic Development (CCED) at Delta State University (DSU) engages in development, teaching, outreach and research programs that improve and enhance the quality of life in this region, and advances strategies to use university resources to address poverty in the Delta.
In the Winter 2011 edition of Bridges, Ray Boshara, senior advisor and policy officer at the Federal Reserve Bank of St. Louis, presented several surprising findings about the financial and wealth habits of the poor. (See box below and www.stlouisfed.org/publications/br/articles/?id=2058.) Inspired by Boshara’s work, leaders at the CCED decided to incorporate asset building into the incisive poverty-reduction strategies employed by the Center. Building assets among the poor is a promising avenue for breaking the cycle of intergenerational poverty and for creating economic advantages for low-income families. In recognition of this, Asset Building Among Low-Income Families has become the signature undertaking for the CCED for the next three years. Boshara’s findings provide the foundational principles for this work. The CCED embraces the asset-building model, particularly strategies that enable low-income families to build personal financial wealth through savings and investments.
Poverty Measures in Eleven Alluvial Mississippi Delta Counties—2010
|Mississippi Delta Counties||Median Household Income |
(in 2010 Inflation-adjusted $)
|Percent of Families Below Poverty Level||Percent of Children (<18 years) Below Poverty Level|
|Average for 11 Counties||$25,444||28.4||50.6|
The broader vision of the Center addresses wealth disparity in the Delta by mobilizing community, regional and state organizations to engage aggressively in asset-building activities that stabilize low-income families and improve residents’ quality of life.
Current programs at the CCED are geared toward inspiring asset building among children and providing financial education and individual development accounts (IDA) for adults. The Children’s Savings Account (CSA) program at the CCED promotes, educates and expands opportunities for students from families who are unbanked or underbanked by allowing them to start educational savings accounts in local banks or credit unions. Program director Lakisha Butler recently noted, “We hope to raise funds to continue the program beyond the preliminary phase and establish more CSA sites statewide.” Hope Credit Union and Southern Bancorp Bank currently house children’s accounts for this project.
Community leaders and participants celebrate the kick-off of the Center for Community and Economic Development’s Children’s Savings Account (CSA) program.
Another asset-building activity at the CCED is the Developing Personal Wealth program, which provides financial education to underserved adults. Low-income individuals are recruited and assisted in completing the Federal Deposit Insurance Corporation’s Money Smart for Adults financial curriculum. Graduates are guided to a path of practical money management and are assisted with matching IDA funds for purposes of homeownership, education or business capitalization.
The Center’s approach to asset accumulation in the Delta is encompassing and cooperative, seeking support and building reciprocal partnerships with the Southern Regional Asset-Building Coalition, the Memphis Branch of the Federal Reserve Bank of St. Louis, the Center for Economic Education and Research at DSU, the Institute for Community-Based Research, the Center for Population Studies at the University of Mississippi and other key strategic partners.
To launch CCED’s new development focus, the Memphis Branch of the Federal Reserve Bank of St. Louis recently hosted an asset-building symposium at DSU. The conference informed a diverse group of CCED stakeholders, policymakers and community development practitioners on sound antipoverty measures for low-income communities, including ownership and household asset-building strategies for the poor. The overall emphasis of the symposium was strengthening the balance sheets of Mississippi families for economic growth. A special session allowed community development practitioners, bankers and researchers to discuss regional innovative asset-building strategies. This session provided the CCED and its partners with facts, ideas and possible approaches for effectively implementing asset-building programs in Delta communities, with consideration for contextual social and cultural factors. Regional impediments were isolated and a practical and progressive policy framework to overcome them was offered.
Ray Boshara was a keynote speaker at the symposium. In his concluding remarks, Boshara argued that even in an era of financial austerity, asset building and saving are still the right ideas. For economic mobility, people need to save more. The CCED can help Delta families by designing and implementing effective projects that use creative ways to build assets.