5) Description of initiative: The Center on Business and Poverty, Inc. (Center) is a non- profit spin-off from a UW-Madison campus-based organization that was founded by two UW professors in May, 2004. The campus-based group is affiliated with the Institute for Research on Poverty and the Center for Banking Education at the Business School. The non-profit Center exists to support companies efforts to improve the long-term economic stability and well-being of (target group)their low-income employees, many earning less than the government-defined family poverty level. The campus-based center has been so successful (increased its client base 8100% the second year) that in June, 2006, to help meet the service demand, our non-profit organization was formed. Both Centers remain under the direction of Dr. John Hoffmire. This grant proposal requests support for the work of the non-profit organization that manages conflict by removing the need for poor families to engage in unlawful acts to sustain their basic needs. When the system fails, citizens have a tendency to take issues into their own hands or may become exploited by others. The Center connects volunteer and paid tax preparers with employees at their worksites and sees that (products and services)their tax forms are correctly filled out - and that they may gain from the Earned Income Tax Credit law. In addition, we ensure that software is used with tax prep to distribute benefits like childcare, food stamps and health care. Last year, for the campus-based Center, the average employee gained approximately $670 in tax advantages over what was estimated they received the previous year. The Center has helped employees open bank and checking accounts at work, establish direct deposit of their pay, and assist them to use financial tools that help them avoid loans with high interest rates. Help is provided to enroll in company plans, e.g. 401 (k)and stock purchase.

6) Description of innovation: There appears to be a misunderstanding in parts of the asset-building community in thinking that corporations are not interested in helping their low-income employees increase their annual income. We have found that the vast majority of corporations to be very positive about participating in benefit bundling and asset-building programs for their low-income employees. Most tax prep programs for the poor are community based and stop with preparing taxes for free. Our innovation is that we use software, that is normally used in government or community settings, in the corporate setting to distribute benefits like childcare, food stamps, health care, etc., and this software is used in conjunction with people doing their taxes. Thus, we immediately know which benefits they are eligible for. We have the means to connect them to their benefits quickly. It cuts down on the red tape and paper work that poor people normally have to suffer in order to receive these benefits. The trigger is their proof of income, which we have in completing their income taxes. Tax preparers are trained to use the special software that will quickly and easily get the poor enrolled in the benefit programs they need. What is most exciting about our non-profit organization, the Center on Business and Poverty, Inc., is that the value we are creating is growing exponentially while our costs are decreasing. We have moved to an all-volunteer staff which is unique. We are paying healthcare for three of the volunteers, and are attracting people who are further along in their careers, some of whom have retired early and are looking to serve and run their own operations. We are confident that this method of running our organization will sustain us for many years to come.

7) Delivery model: The Center on Business and Poverty works in three central ways. We develop best practices regarding approaches that businesses can use to help alleviate poverty among their low-income employees without it directly costing money to the company. We disseminate these best practices. And we monitor and evaluate the efforts of businesses as they attempt to address poverty among their employees.

Identification of companies is based on the presence of significant numbers of low-income employees, geography, access to top leaders and a sectoral approach which prioritizes manufacturing, healthcare, financial, retail and service companies.

We use regional boards to contact companies which not only want to welcome volunteer tax form preparers, but which are willing to be monitored and evaluated. Through this feedback loop, we are able to improve upon the best practices. We work both directly with companies and low- income employees and/or have members of our advisory committees and affiliated organizations take these steps. Much of the work entails gathering employees for meals paid for through donations collected by the Center. At these meals, education and activity take place around the earned income tax credit, direct deposit, avoiding payday lending and check-cashing fees, training, taking advantage of matches, investing, saving and developing equity in homes.

Connections with the business community come mostly through the Director's 10,000 contact, personal database.

We market services through news articles, e.g. the one in Madison magazine, "Investing in People . ." by Robert Chappell, through the campus center website, www.cobap.org, through fundraising efforts, and by word of mouth. The Center has more opportunities for business than it can currently adequately handle. We will operate in 9 states in 2007 on a project for 500 employees at Staples.

8) Key operational partnerships: Partnering is absolutely central to the success of our efforts. It keeps our costs lower and allows the experts in specific areas to provide badly needed services to our clients. The exact partners depend upon the project. Examples are listed below: a. Staples 500 Person Project - Our partners are the Staples Corporation and sites in nine states, H&R Block, and Nets to Ladders for data collection and analysis b. Allied Drive Volunteer Income Tax Assistance (VITA) low-income district in Madison - Association of Community Organization for Reform Now (ACORN), Nets to Ladders software in combination with TaxWise to deliver electronic sign-up for credit union accounts, Food Stamps, and State Medical Care, U.W. for grad student volunteers for the tax prep, City of Madison, Department of Revenue, and the IRS. c. We are facilitating the use of the M&I Bank financial literacy program at a company called Insinkerator. M&I and Food Fight use WI Department of Revenue and the AARP volunteers in Madison to complete tax forms and sign up for bank accounts. M&I will expand their offering by going into a number of companies to do financial literacy work next year. And they may use some of their employees to volunteer to do other firms'low-income employees' tax forms. d. Other: Social Development Commission (SDC)in Milwaukee and the Financial Education Center (FEC) in Dane County The FEC helps coordinate a very large VITA site.

9) Financial model: Access to services by beneficiaries is easy because the services are either located at H&R Block offices which are conveniently located in multiple areas in cities or the service comes to the office in which the beneficiaries work. Because we use volunteers to prepare taxes and obtain donations for meals for the volunteers, we are able to offer tax preparation free of charge to most of our beneficiaries.

          • Costs as percentage of income: o%

          • Financing: Below is our expected income for 2007. Expected Sources Expected Amount Fundraising Event 24000 Community Foundation 25000 Individual Donations 15000 National Foundation 40000 Sub-total 104000 Staples Foundation for Learning 25000 Total 129000

The Centers experience since 2004 is that once we develop partners, we do not lose them. Part of this is that we treat people well and measure our work accurately and efficiently. We also have on board committed fundraisers who actively seek donations, write grants, and are organizing a Golf Tournament. Last year our campus organization accumulated at least a 5 times multiple of value created over the cost of providing the service.

10) Effectiveness

          • Project outcomes: We have grown to the point where we will have a regular presence in 4 cities: Detroit, Madison, Milwaukee and Washington, DC. We also have opportunities to start offices in Chicago, Dayton and Sacramento. In the past year we helped employees to create $483,000 in value for themselves. We compare what people received with better tax help in the year we helped them to the previous year when at least half of our clients had less assistance. We also expanded our programs to a successful urban entrepreneurship program in 2006. Last year the average employee gained approximately $670 in tax advantage over what was estimated they received the previous year. A total of 830 people have benefited from our program since its inception.

          • Number of clients in past year: 808 people have benefited from our program over the last year. The Center on Business and Poverty was organized in 2004. A pilot research study was conducted in 2005-06 in which 21 clients were served, and then we expanded to serve 808 clients in 2006. We project that we will serve 1,800 clients in 2007.

11) Scaling up strategy

          • Stage of the initiative: Scaling Up stage.

          • Expansion plan: Our expansion plan for the next three years include: An increase in the number served to 2,500 per year. Continue to perfect software that increases the ease of connecting the poor who receive free tax prep to also receive other benefits like food stamps, health care, child care, etc. Expand the press coverage of the Center and the ideas we work on from 7 articles to 14. Broaden the reach of press coverage from Madison-Milwaukee to International coverage. Increase the wealth of employees through tax, banking and retirement plan work by $700,000 per year Help another firm become a member of the "Best 100 Companies To Work For" Club Expand our services to California and Texas Expand our programs to others like the Entrepreneurship Program in 2006.

12) Origin of the initiative: Karl Scholz, Co-founder of our Center, is the premier researcher in the U.S. on the Earned Income Tax Credit (EITC), the largest anti-poverty program in the nation. John Hoffmire, Director of COBAP, worked in a tax advantaged retirement plan field for over 20 years. The two had studied at Stanford University and decided to look for a solution to the following problem: How can low- income people who receive significant benefits through the EITC, find ways to save more in retirement by using software, tax preparation, bank accounts and 401 (k)s? Part of what inspired this innovation was insight that if one wants to find low-income people at a time they have money to save, one needs to work with people at their tax time,when refunds are available. Also the best place to look for these people is at work because so many were having to hold two jobs to live.

Contact Information:
Mary Lou  Black
Fundraising Coordinator and Member of the Board of Directors
Center on Business and Poverty, Inc.
(Individual Non-profit)
510 Charmany Drive - Box 178, Innovation Center - University Research Park, Madison, WI 53719-1235
United States
Tel: 608-345-5111
Fax: 608-265-3119
Email: mlblack@chorus.net
Website: www.cobap.org