RS VITA Webinar Presentation_July 27 2010


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RS VITA Webinar Presentation_July 27 2010

  1. 1. REAL Solutions Volunteer Tax Assistance Programs (VITA) Nancy Pierce – Field Coach So Your Credit Union Wants to Participate in VITA Outreach: What Does that Mean?
  2. 2. 3 RS VITA Webinars June 22 – How can state leagues and foundations assist Cus with VITA Outreach – Archived at: Today – So your credit union wants to participate in VITA outreach: What does that mean? August 17 – Complementary products to a VITA operation
  3. 3. Today’s Participants: Brian Zapf, Alternatives Federal Credit Union Ellen Murtha, Santa Cruz Community Credit Union Jennifer Sierecki, North Side Community Federal Credit Union
  4. 4. What is VITA?
  5. 5. Volunteer Income Tax Assistance Is an IRS program that offers free tax help to those who qualify – generally $49,000 and below IRS certified volunteers help with tax preparation Help with special tax credits – Earned Income Tax Credit, Child Tax Credit, Credit for the Elderly or the Disabled
  6. 6. Linking VITA to Asset Building & Financial Opportunity Brian Zapf Alternatives Federal Credit Union Ithaca, NY
  7. 7. Community Tax Program
  8. 8. Profile of Unbanked Low Household income Rent Younger age Immigrant Minority Low Income neighborhood Less educated Unemployed Larger family Higher cost services (lower savings)
  9. 9. What’s the Earned Income Tax Credit? Intended to support working families, rewarding work especially for people with limited incomes and children It first started in 1975, expanded since then It’s now the federal benefit that brings the most US families out of poverty!
  10. 10. More about the EITC: EARNED INCOME TAX CREDIT = MONEY in the pockets of working people, but ONLY if they file a tax return! The EITC lifts more people out of poverty than any other government program. Single parent of two children earning $12,500 – $16,500 is eligible for the maximum refund of $5,657 a 34-45% increase in the family’s income!!!
  11. 11. Get extra credits: Federal & Empire State Child Tax Credit For parents raising children under age 17 Federal credit worth up to $1,000 per qualifying child State credit is also available for qualifying children (different criteria apply)
  12. 12. Get extra credits: Child & Dependent Care Tax Credit For parents who use child care for children under age 13 while they work, look for work, or go to school Federal credit worth up to 35% of child care expenses NY State credit worth up to 100% of the federal amount is a Refundable Credit
  13. 13. The Problem- You can only get these credits if you file. And chain preparers target these returns for: RALs - Refund Anticipation Loans $1.75 Billion Diverted Annually What a scam! Charged at Interest Rates of 64% - 1000%
  14. 14. Our Solution $ 0 = The cost of preparation with us $ 0 = The cost for e-filing $20 = Refund Express Fee $10 = The average interest paid 70+ = The number of volunteers And a Growing Coalition: United Way, Day Care Council, Lifelong RSVP, Cooperative Extension, Tompkins Cortland Community College, Department of Social Services, Ithaca College, Red Cross, United Auto Workers, Towns of Dryden and Caroline
  15. 15. Thanks to our community partners Human Services Coalition Ithaca College School of The Women’s Business Opportunity Center Cornell Public Service TCAT Center Evenstart Tompkins Learning Partners BOCES The New York Makes Work Pay Coalition Cornell Translator Lifelong RSVP Interpreter Program United Autoworkers OAR Ithaca The Corporation for Latin American Civic National and Community Association Service Town of Dryden Tompkins 211 Brooktondale Community IRS (SPEC) Center Catholic Charities Iraqi Refugee Assistance Connection of Ithaca
  16. 16. Thank You to Our Sponsors United Way of Tompkins County Tompkins Trust Company HSBC United Autoworkers Cornell Sunshine Lady Foundation The Corporation for National and Community Service
  17. 17. Benefits All Around 8600+ = Returns completed in 8 years 519 = New credit union members in 8 years $150 = Average fee savings for filers $150 = Average additional savings for filers with Refund Express $1.2 million+ = Preparation and loan fees avoided $14.7 million+ = Refunds claimed in 8 years
  18. 18. Our Clients TY 2009 1,547 Number of clients served $2,815,130 Amount of federal refunds $3,533,179 Dollar amount of all refunds $255,255 Total cost to clients if they had each paid $165 to have their taxes prepared.
  19. 19. Not Just Free Tax Prep: Opening That Account Free Direct Deposit into any account CU Membership – $10 One Time Fee $5 Initial Deposit ( all Fees are waived until the refund arrives) Fresh Start Checking Accounts Low-Cost Refund Express Loan 31% of our new VITA members had been unbanked, 3 times as many as our general membership
  20. 20. Refund Express Loan Draws taxpayers to the program and away from predatory lenders; saves them hundreds in fees. Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed. Extremely safe loan if simple procedures are followed. An open door to the world of productive credit A great opportunity to repair or build a credit history.
  21. 21. Refund Express Loan Draws taxpayers to the program and away from predatory lenders; saves them hundreds in fees. Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed. Extremely safe loan if simple procedures are followed. An open door to the world of productive credit A great opportunity to repair or build a credit history.
  22. 22. Refund Express Loan Draws taxpayers to the program and away from predatory lenders; saves them hundreds in fees. Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed. Extremely safe loan if simple procedures are followed. An open door to the world of productive credit A great opportunity to repair or build a credit history.
  23. 23. Loan Losses Program Inception to date: $0 Administrative Expenses Covered by $20 fee paid by borrowers
  24. 24. Refund Express Loan Draws taxpayers to the program and away from predatory lenders; saves them hundreds in fees. Uses our Line of Credit (L.O.C.), an existing service: no new forms, paperwork, or policies needed. Extremely safe loan if simple procedures are followed. An open door to the world of productive credit A great opportunity to repair or build a credit history.
  25. 25. Taxes are nice… …but asset building is the key
  26. 26. Refunds to Assets Like Getting Your Taxes Done for Free? You’ll LOVE What Else We Can Do for You!
  27. 27. Additional Resources and Contact Information Public information on our website, Brian Zapf, Community Tax Program Director, 607-216-3459
  28. 28. Santa Cruz Community CU Free Tax Return Preparation (Earned Income Tax Credit) Program Tax refunds and credits that benefit your members, your potential members, and your credit union
  29. 29. Mission and Structure Mission: Santa Cruz Community Credit Union is a nonprofit financial cooperative that promotes economic justice. Santa Cruz Community Ventures: a 501(c)3 public benefit corporation, an affiliate of the Credit Union
  30. 30. Who We Are Founded in 1977 Community Development Credit Union; CDFI with NCUA low income designation. Serve low- and moderate-income communities in Santa Cruz and north Monterey Counties in CA $82MM in assets, 10,000 members
  31. 31. Why SCCCU Offers Free Tax Assistance EITC brings federal and state funds into the community Significantly increases income for low-income working families Residents spend many of these refund dollars at local businesses, which create more jobs
  32. 32. The Credit Union Connection Provides an incentive to “unbanked” and a link to financial products, services, and asset building knowledge Educates low-to-moderate members of ‘work supports’ like EITC, that can benefit them Promotes and establishes long-term relationships with the credit union
  33. 33. Earn it, Keep it, $ave it! SCCCU began offering financial education at Volunteer Income Tax Assistance sites in 2004 With partners, we had 19 sites this last tax season. We operate 3 bilingual tax sites ourselves – one at CU branch, in addition to other ad-hoc sites Private and government grant funds support a PT program coordinator; who is certified to do taxes (certification is easy)
  34. 34. Outreach Message that All Appreciate VITA and EITC are our government at its best. Elected representatives are pleased to promote this Even the “compassion-fatigued” can appreciate that this service is for people who earned income The cost effectiveness of volunteers is something the whole community can cheer on
  35. 35. Outreach Materials and Concepts are Already Available Free ideas and reproducible P.R: The National Community Tax Coalition The IRS/SPEC The Center on Budget and Policy Priorities The airwaves are public and assessable Get listed on 2-1-1 and 800 phone lines as well as service databases
  36. 36. Outreach continued Only limit to outreach is your time and resources (and your partners!) The challenge of outreach is people have be bombarded by messages and advertising Reaching the low-to-moderate income, other language, or immigrant populations requires skill
  37. 37. Outreach – a final word Word-of-mouth is what people say about how they heard of us Must have multiple methods for generating word-of-mouth (community agencies, radio, banners, newspapers, handouts…) When we serve people well, they tell their family, friends, co-workers
  38. 38. VITA Sites reach people who can benefit from assistance Partner agencies offer other ‘work supports’ such as Food Stamp applications and children’s health insurance We partner with family resource centers, the county public assistance, early childhood education organizations, the United Way and other service providers Utilize university student interns + community for trained volunteers
  39. 39. Earn it, Keep it, $ave it, continued Offer bilingual/bicultural onsite financial education, account opening, tax refund splitting, and direct deposit Link with asset building opportunities (savings, IDAs) Partners leverage county-wide impact of program, allow expansion of service
  40. 40. How to get involved Develop free tax preparation program, or, Partner with local organizations offering free tax assistance by: Volunteering Opening accounts, financial education Promote EITC info and local tax site information to your members Either way, find partners first
  41. 41. Why Credit Unions? People helping people philosophy Benefits members financially Credit unions offer a critical link to financial products and services Effective public relations and marketing opportunity
  42. 42. Need More Reasons? Builds trust and positions the CU as a place to go for information, education and financial services SCCCU has received local recognition from the elected representatives, the Volunteer Center and the United Way. SCCCU has received funding that recognizes we our asset building
  43. 43. The Numbers SCCCU filed 509 returns, with partners 1,765 Refunds of $730,634 for 2009 tax year, with partners $1,844,655 Average EITC return = $1,839 Estimate program saved over $101,800 in tax return preparation fees, with partners $321,600
  44. 44. The Numbers, continued Refunds = 13% annual income increase 11% ‘unbanked’ opened accounts 56% used direct deposit – which is a tool to defeat Refund Anticipation Loans Financial education offered in concurrent classes, handouts and referrals Between 1/3 – ½ intended to save some of the refund (depending on site)
  45. 45. Resources REAL Solutions ( National Community Tax Coalition ( IRS SPEC (,, id=119374,00.html) or ( The Aspen Institute – Economic Opportunity Program (
  46. 46. QUESTIONS? Contact Information: Ellen F. Murtha Community Development and Outreach Program Manager Santa Cruz Community Credit Union (831) 460-2345
  47. 47. NORTH SIDE COMMUNITY FEDERAL CREDIT UNION So Your Credit Union Wants to Participate in VITA Outreach: What Does that Mean? July 27, 2010 Jennifer Sierecki Manager 773-769-5800 x.227
  48. 48. North Side Serves Chicago Communities • 36 year-old community development credit union • Low-income designated by NCUA • Certified as a Community Development Financial Institution (CDFI) by the U.S. Treasury – $9 million in total assets and over 3,000 members – Partners with 42 employers with over 7,000 employees • History of serving people who are not using mainstream financial institutions • History of innovative products – Payday Alternative Loan, VITA, New Americans Loan Program, Housing Counseling
  49. 49. History of VITA Services • Partnership with Center for Economic Progress (CEP) – In 2004, North Side began its partnership with CEP, one of the largest VITA organizations in the country. – CEP provides marketing materials, equipment, supplies, a small food budget, volunteers, and site managers. North Side rents additional space in the building for intake, provides additional food for the volunteers, and has staff oversee the site. – For year one, North Side hosted a site for one evening a week, scheduling appointments for members and SEG employees. – Year three of the VITA site, North Side opened the site for two evenings, one evening still reserved for members and SEG employees, the other evening open to the community. – In 2009, North Side’s VITA site expanded to three evenings.
  50. 50. History of VITA Services (continued) • North Side Staff and Marketing Responsibilities – Initially, one North Side VISTA intern and one staff member were certified by CEP to prepare taxes and in site management procedures. – Currently, one North Side staff person is certified each season, schedules appointments, and oversees the site. – North Side harnesses its relationships with SEGs and other partners to promote VITA services via payroll stuffers, newsletter blasts, event postings.
  51. 51. VITA Site Returns 4000 3369 3500 N u m b er o f R etu rn s 3000 2500 2000 1500 813 660 1000 572 573 500 196 269 286 0 03 Tax 04 Tax 05 Tax 06 Tax 07 Tax 08 Tax 09 Tax Grand Year Year Year Year Year Year Year Total
  52. 52. VITA Site Refunds $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 03 Tax 04 Tax 05 Tax 06 Tax 07 Tax 08 Tax 09 Tax Grand Year Year Year Year Year Year Year Total Total $179,205 $317,813 $408,365 $729,978 $791,658 $1,182,486 $1,093,915 $4,703,420
  53. 53. Helping the Community Save • During its VITA history, North Side has been able to return over $4 million dollars to the community and save over 3,000 individuals and families a minimum of $387,435 in tax preparation fees. • This savings does not include what clients would have paid for a RAL or refund check cashing fees. In 2002, over one-third of residents receiving EITC funds in three of North Side community areas (Rogers Park, Uptown, and Edgewater) used RALs, and paid a total of $1,108,808 in fees.
  54. 54. Why VITA? Up to 5% of the wages employers paid to some workers was spent at Currency Exchanges, Payday Loan stores, and other fringe financial service providers* • Low income individuals and families save with free tax preparation – Paid preparers charge $110+ for a service that a trained volunteer can provide in one hour – Refund Anticipation Loans (RALs) cost $150+ to advance a refund that could be directly deposited to a credit union account in two weeks through the VITA site. – Many working families might not file otherwise – forfeiting money they have earned. • Members, SEGs, and partners value the service – Members return year after year and continue to save their refunds with the credit union. • Excellent Outreach to Potential New Members – Come in for the free service and take advantage of other products and services. •$660 annually ($110 for tax preparation, $150 RAL, $400 for Currency Exchanges, Payday Loans and other financial service providers) for an individual earning $7.50 per hour
  55. 55. Lessons Learned • A VITA site is no small undertaking – Keep in mind that staff time dedicated to the VITA site takes away from other credit union objectives, but is a great way to serve your membership and recruit new members. – You will have individuals come into the credit union throughout the day and sometimes throughout the year with tax questions, even if your site is not open. – Our site operates during the evening hours, so staff at the time work unconventional hours and may not be able to assist members during credit union hours. • Determine if a VITA site is right for your credit union – Does a percentage of your membership fall within the VITA income guidelines? – Do your current SEGs and partners have employees or clients that fall within the VITA income guidelines? – While clients that open account during VITA services will have their refunds direct deposited into the credit union, there is a high probability that many will end up as low balance accounts.
  56. 56. Lessons Learned (continued) • Start outreach early – Coordinate payroll stuffers and poster displays at SEGs and other partners in December to get people before they get their W-2s. – If you decide to make appointments, start making scheduling appointment in early January for services in late January. • You are only as good as your partner(s) – Be aware that there are only some things out of your control, such as volunteers, still represent the credit union. – Make sure to keep open lines of communication. • Foster an environment to retain good volunteers – Keep the volunteers happy, so they come back every week and hopefully next year! • Keep the VITA clients happy – So they come back next year and not to a paid preparer. • Develop complementary products – To keep members active with the credit union, we created two products to help them grow their savings at tax time, a refund reward CD and a match refund account.
  57. 57. Timeline for Implementation • If you are interested hosting a site for a partner, contact your local VITA organization early to begin conversations and to determine their process for adding on new sites and partners. After April 15th is ideal. • If you want to start a site on your own, get to know your local IRS SPEC representative ASAP. • Explore grant support available through the IRS and other channels, this will help to determine when to start your plans.
  58. 58. Summary Themes Importance of Partnerships Helping the Community Outreach to Lower Income Families Keeping More Money in Consumers’ Pockets
  59. 59. Ways to Participate Provide information about EITC and local VITA site Volunteer at a site Host a site Become a certified tax volunteer Open accounts, offer financial education Offer Refund Express Loan
  60. 60. Save the Date August 17, 3 pm EDT – Complelmentary Products to a VITA Operation Nancy Pierce, REAL Solutions Field Coach: Questions?