Individual Development Accounts

At a Mid-City novelty knitwear company, a group of immigrant workers gathers for an English lesson. Today, they interview for their dream careers. Edgar appeals for a loan to launch his business as a men's fashion designer; Jeanine applies to be a pharmacist. The exercise is make-believe. But the low-wage employees at Suss Design are creating their own reality. Suss is part of a novel program that's being watched across the country.

When Andre Soto heard about a new program that could turn $500 of college savings into $2,000 almost overnight, the Lincoln Heights father of two assumed it was a Ponzi scheme. "There are so many scams going on, and this was clearly too good to be true," he said. But the account he stumbled across, called Triple Boost, is no Ponzi scheme. It's part of an anti-poverty program offered by San Francisco nonprofit Earn. Launched in 2001, Earn is one of hundreds of purveyors of so-called Individual Development Accounts, which are matched savings accounts aimed at helping low-income Americans build economic stability through savings.

When Andre Soto heard about a new program that could turn $500 of college savings into $2,000 almost overnight, the Lincoln Heights father of two assumed it was a Ponzi scheme. "There are so many scams going on, and this was clearly too good to be true," he said. But the account he stumbled across, called Triple Boost, is no Ponzi scheme. It's part of an anti-poverty program offered by San Francisco nonprofit Earn. Launched in 2001, Earn is one of hundreds of purveyors of so-called Individual Development Accounts, which are matched savings accounts aimed at helping low-income Americans build economic stability through savings.

Lawrence Iriate ran out of financial aid a semester short of college graduation. But the Newark, Calif., artist had an ace in the hole--an Individual Development Account, which is a matched savings account for the working poor. Iriate had set aside $500 in that account. A nonprofit group matched his savings $2 for $1. The resulting $1,500 was just what Iriate needed to help him become the first member of his family to graduate from college.

Genell Dean is saving money for a house. That simple statement would have been unthinkable 18 months ago when, pregnant and with two young children in tow, Dean fled Atlanta and her husband, ending up in a Salvation Army shelter here. And it still is unthinkable for nearly everyone who spent most of the last year on welfare, as Dean did in order to feed her family. In most of the United States, anyone who has $1,000 in assets is no longer eligible for payments.

Lawrence Iriate ran out of financial aid a semester short of college graduation. But the Newark, Calif., artist had an ace in the hole--an Individual Development Account, which is a matched savings account for the working poor. Iriate had set aside $500 in that account. A nonprofit group matched his savings $2 for $1. The resulting $1,500 was just what Iriate needed to help him become the first member of his family to graduate from college.

President Clinton signed legislation Tuesday directing that a greater portion of federal Head Start money be used to improve quality in the popular preschool program rather than to expand its enrollment. The law also creates a five-year test program allowing about 50,000 low-income families to save for a first home, college, or business start-up, with each dollar they save matched by the federal government. The so-called individual development accounts come with a $125-million price tag.

A report that recommends ways to spark economic development in L.A.'s poor minority neighborhoods will serve as a launching point for a discussion today by the Los Angeles mayoral candidates, business executives and community leaders. The report, published by the nonprofit Operation Hope and UCLA's Anderson School, stemmed from Operation Hope's Inner-City Economic Summit held in South Los Angeles last year.

President-elect Bill Clinton's victory will mean a broad array of new policy initiatives that will affect the economy and business. Here briefly is how some major industry sectors are likely to be affected by a Clinton. Aerospace/Defense: Wants to cut defense outlays by $60 billion over five years, compared with current spending projections. Will create new federal research agency to employ defense industry scientists and engineers on civilian projects.

Geneva Thacker's wish sounds simple enough. She'd like city water hooked up to her trailer so she and her two young children don't have to carry it anymore. "I pack it in buckets from Mommy's," said the 29-year-old eastern Kentucky woman, who washes clothes by hand and uses a barrel to catch rainwater. "It's a big hill. That'd mean everything to me to get to put my bathroom in and my water. "I'd probably think I was rich."

At a Mid-City novelty knitwear company, a group of immigrant workers gathers for an English lesson. Today, they interview for their dream careers. Edgar appeals for a loan to launch his business as a men's fashion designer; Jeanine applies to be a pharmacist. The exercise is make-believe. But the low-wage employees at Suss Design are creating their own reality. Suss is part of a novel program that's being watched across the country.

Genell Dean is saving money for a house. That simple statement would have been unthinkable 18 months ago when, pregnant and with two young children in tow, Dean fled Atlanta and her husband, ending up in a Salvation Army shelter here. And it still is unthinkable for nearly everyone who spent most of the last year on welfare, as Dean did in order to feed her family. In most of the United States, anyone who has $1,000 in assets is no longer eligible for payments.

Responding to President Bush's call, House members unveiled a plan Wednesday to give faith-based groups a much larger role in the government's safety net of services for the needy. The Senate also entered the growing fray, though with a more narrowly tailored bill that would provide an array of new tax incentives to strengthen charitable groups and stimulate donations to them. "In our effort to wipe out poverty and hopelessness, we need all the soldiers we can muster," said Rep. J.C. Watts Jr.

Geneva Thacker's wish sounds simple enough: She'd like city water hooked up to her trailer so she and her two young children won't have to carry buckets anymore. "I pack it in buckets from Mommy's," said the 29-year-old eastern Kentucky woman, who washes clothes by hand and uses a barrel to catch rainwater. "It's a big hill. That'd mean everything to me to get to put my bathroom in and my water. "I'd probably think I was rich."