IQ Magazine - Summer 2008

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SUMMER 2008

CONTENTS FEATURES 12

16

20

24

27

Hard Line

An Unbroken Circle

Buried

Speak No Evil

Stories of Hope

Federal Poverty Line Cloaks Prevalence, Hardships

Passing Down Poverty in Minnesota

The Slippery Slope from Working to Poor

The Truth Behind Poverty’s Popular Mythology

Five Who Found a Way

DEPARTMENTS 4

Beginnings My Worst Day

6

8

New Horizons

36 Saving Grace

Minnesota Communities Unite to End Poverty

Early to Rise Poverty Solution May Lie in Youngest Years

40 Keynotes

Anti-Poverty Agencies Teach Financial Literacy, Discipline

34 Energy Stars VISTAs Power Nonprofits against Poverty

48 Guest Editorial 38 The Golden Ticket?

Marissa Engisch, an Initiative Foundation VISTA at Bridges of Hope in Brainerd, depicts the economic and emotional fragility of Minnesotans in poverty—and the challenges of getting a life back together.

Photograph by Jim Altobell

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Initiative Quarterly • IQmag.org

The Best Handouts

Homeownership Programs Still Build Wealth

“Our mission is to unlock the power of central Minnesota people to build and sustain healthy communities.”

Cass

COVER

The Foundation Newsletter

Wadena Crow Wing

INITIATIVE FOUNDATION GOALS Pine

Todd

Mille Lacs

Morrison

Kanabec

Benton Stearns

Isanti Sherburne

Wright

Chisago

Strengthen Economic Opportunity Preserve Key Places and Natural Resources Support Children, Youth, and Families Build Organizational Effectiveness Encourage the Spirit of Giving

Summer 2008

3

A Visit With a Friend

BEGINNINGS

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215 Park Avenue South, Suite 100, St. Cloud

The Initiative Foundation’s birth-year, 1986, was a challenging time for my husband, Neal, and me. We had three demanding preschoolers. We both attended night classes. We said goodbye to our dream of owning a family farm.

From Sunday to Friday, Neal stayed in Hibbing for law enforcement skills training. I was alone with the kids.

One Monday morning, I had to be in Minneapolis to discuss a $6 million state investment in the Minnesota Initiative Foundations’ loan programs. My nightmare began when I overslept. Frantic, I rushed to get the kids out the door. That’s when I stepped in the water on our basement floor, 80 gallons that leaked from the water softener.

Beneath a nerve-fraying soundtrack of naked children screaming, I paced back and forth in disgust and disbelief. Then came a knock on the door. I opened it to find my neighbor, a truck driver, looking unusually somber. “Kathy, I don’t know how to tell you this, but I just hit Ginger. I don’t think she’s gonna make it.”

Ginger was our family dog. My chest tightened. I gave him Neal’s handgun and tried to keep the kids away from the windows. I pressed my hands over my ears. Nothing. Then, another knock. “I need some bullets,” he said.

Needless to say, I was shaken and late for my meeting. Mustering every ounce of professionalism and composure, I somehow survived the day. But my car didn’t. It was towed for illegal parking.

The drive home was long, lonely, and depressing. Hungry and broke, I was too late to attend my night class and missed a big exam. I picked up my kids from daycare and stopped at the mailbox. There, I found an overdraft notice from the bank.

As we were pulling into the garage, our daughter, Melanie, pushed the door-opener button a little too early. The garage door dragged on top of the car.

This is my true story, a terrible moment in time that represents my closest personal experience to the hidden oppression of poverty in Minnesota. The difference is that my story began and ended in a single day. For others, it’s a way of life. But it shouldn’t be.

In this special issue of IQ, you will find far more challenges than solutions. Sadly, we can offer no magical key that delivers a family from poverty. Every situation is as unique as the individual experiencing it. Solutions require multi-faceted efforts and engaged communities. It all begins with empathy and awareness.

And reading this magazine.

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Investment Representatives are registered representatives of Fintegra.

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Initiative Quarterly • IQmag.org

Kathy Gaalswyk, President Initiative Foundation

P.S. Our most sincere thanks go to the Northwest Area Foundation (nwaf.org) for their magazine sponsorship, editorial support, and national leadership on reducing poverty. See their ad on the inside back cover.

> VOLUME 6, SPRING 2008 INITIATIVE FOUNDATION Executive Editor & Director of Communications / MATT KILIAN Communications Associate / ANITA HOLLENHORST PUBLISHERS Evergreen Press / CHIP & JEAN BORKENHAGEN EDITORIAL Editorial Director / JODI SCHWEN Managing Editor / TENLEE LUND ART Art Director / ANDREA BAUMANN Senior Graphic Designer / BOB WALLENIUS Graphic Designer / BRAD RAYMOND Production Manager / BRYAN PETERSEN Lead Photographer / JIM ALTOBELL ADVERTISING / SUBSCRIPTIONS Business & Advertising Director / BRIAN LEHMAN Advertiser Services / MARY SAVAGE Subscriber Services / ANITA HOLLENHORST IQ EDITORIAL BOARD Initiative Foundation President / KATHY GAALSWYK Northwest Area Foundation / SYLVIA BURGOS TOFTNESS Sauk Rapids-Rice School District/ DEB CAMPBELL Hands Across the World / BRIANDA CEDIEL Tri-County Action Program / PAULA ERDMANN Initiative Foundation / CHRIS FASTNER Advocates Against Domestic Abuse / LISA HAMILTON Initiative Foundation / CATHY HARTLE Bridges of Hope / KASSIE HEISSERER Initiative Foundation / DON HICKMAN Region Five Development Commission / CHERYAL HILLS Rum River Health Services / BRENDA HOFFMAN Initiative Foundation / JOHN KALISZEWSKI Communities Investing in Families / STEFANIE LEIBEL Legislative Commission to End Poverty / ANDREA LINDGREN Otto Bremer Foundation / TONY LOOKINGELK Bank of the West / GARY NORDIN Crow Wing County Social Services / PAT SHARBONDA Initiative Foundation / JANA SHOGREN Catholic Charities / RENAE STRUCK East Central Regional Development Commission / JORDAN ZELLER

Poverty isn’t a choice. It’s an unbroken circle.

Through common-sense programs for businesses, nonprofits and communities, we’re working to create quality jobs and economic opportunities where they’re needed most. We help people help themselves, and we can help you change the status quo.

Initiative Foundation 405 First Street SE Little Falls, MN 56345 320.632.9255 | www.ifound.org Published in partnership with Evergreen Press, IQ Magazine unlocks the power of central Minnesota leaders to understand and take action on regional issues.

www.EvergreenPress.net

For advertising opportunities, contact: Lois Head 320.252.7348, lmhead@stcloudstate.edu Brian Lehman 218.828.6424 ext. 25, brian@evergreenpress.net Kristin Rothstein 320.251.5875, kristin@cpionline.com

Summer 2008

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more FIRST

FIVE YEARS

BY DAWN ZIMMERMAN

Early to Rise Poverty Solution May Lie in Youngest Years

T

here are people in Minnesota who believe that magic beans, spaceships, and talking animals are must-have tools in the fight against poverty. That’s as long as they appear in preschool literacy programs and other early childhood efforts aimed at the very foundation of human development.

According to a series of reports from 2003 through 2007 by the Minnesota Department of Education, less than 50 percent of the state’s preschool children entered kindergarten fully prepared for success, which can be a harbinger of future academic and life challenges.

Under the six Minnesota Initiative Foundations and The McKnight Foundation, 66 statewide early childhood coalitions are uniting communities around high-quality early care and education in a massive effort to break the cycle of poverty and crime.

Their efforts have generated more than 800 community-based programs, such as Dolly Parton’s Imagination Library, offered

by United Way agencies in 18 Minnesota communities. With local sponsors, the program aims to improve school readiness by mailing free books every month to thousands of Minnesota children under age five.

“Now more than ever, we are challenging coalitions to think not only about how they can serve children in low-income families, but also how they can engage the parents,” said Linda Kaufmann, senior program manager for children, youth and families at the Initiative Foundation. A survey found that 86 percent of the Imagination Library children became more interested in books, and three-fourths of parents read to their children more often.

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Initiative Quarterly • IQmag.org

Coalitions of education, business, and political leaders are also connecting early childhood programs with economic and workOUNCE OF PREVENTION: Landmark studies show the poverty-reduction force development. potential of early care and education programs like those at Melody A landmark study Peterson’s Playhouse childcare centers. at Michigan’s Perry Preschool followed two groups of lowthan just about any other economic develincome children to the age of 40. One group opment investment communities can received the benefits of a high-quality early make,” Kaufmann said. learning environment. The other group did A pilot program at Playhouse childcare not. The results were eye-opening.

Those who did not receive the supcenters in St. Cloud and Baxter seeks to port were more likely to drop out of high provide the research to build an even school, receive welfare benefits, and comstronger case for investing in high-quality mit crimes. In stark contrast, children who early childhood programs that target lowcompleted the program earned 40 percent income children. more and were more likely to own a home A state-funded study will follow nearthan the students not exposed to the ly 30 children at the two Playhouse sites learning environment. The researchers through June 2009. Parents receive a reimfound every dollar invested in the probursement that allows them to afford the gram during the 1960s provided a return more costly program. For providers like of $8 in public benefit.

Playhouse, this is an opportunity to reach Minneapolis Federal Reserve econoand care for low-income children, who mists Art Rolnick and Rob Grunewald have they know will particularly benefit from the since worked to shine a spotlight on the learning environment. financial returns of high-quality early child“Whatever we can do to help these hood programs. Their work has significantchildren be ready for kindergarten and give ly increased awareness among business them a base for lifelong learning, that’s leaders and legislators throughout the state, what it’s all about,” said Melody Peterson, and funneled additional resources to early co-founder of Playhouse. education programs.

And it’s the earliest interventions that “From an economic standpoint, coalitions hope will save kids from a lifeinvesting in quality care and education for time of poverty.

React at IQMAG.ORG young children provides a higher return

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Summer 2008

7

HOMETOWNS

BY DAWN ZIMMERMAN

New Horizons Minnesota Communities Unite to End Poverty

M

elinda Yarns-Goyne’s story winds down a well-traveled path of poverty in Minnesota. Her mother, divorced and destitute, raised Melinda and her siblings on public assistance. She passed along her financial struggles, leaving the adult Melinda underemployed and without a driver’s license, and her family strapped.

“I had to believe there was a better way,” Melinda said.

But unlike many Minnesotans facing poverty alone, Melinda lived in a community that decided that turning their backs was no longer an acceptable option. In 2004, the Western Community Action Program in Jackson, Minnesota, linked her to its community network called Circles of Support.

The initiative matches low-income residents with “allies” who help them gain skills and achieve personal goals.

When she joined Circles of Support, Melinda had recently received a license in massage therapy, and had dreams of opening her own business. With the guidance of three allies, she realized that the first step was getting her driver’s license and securing full-time employment elsewhere. They boosted her confidence and helped her prepare a résumé that eventually helped her land a good-paying job.

The community also responded when Melinda’s husband left to care for his terminally ill father in Virginia. When Melinda’s mother died of cancer and she had to move her family two weeks later, volunteers loaned trucks, moved boxes, cooked food, and cared for her children.

Circles of Support is among hundreds of community initiatives that have sprung

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Initiative Quarterly • IQmag.org

from the Northwest Area Foundation’s Horizons program, which aims to reduce poverty in rural and reservation communities.

NO SPIN: Thanks to Jackson residents pulling together, Melinda About 200 comYarns-Goyne finally found allies in her dizzying bout with poverty. munities in seven states have participated in the 18month process that those who can afford it. A work-buddy probegins with exploring perceptions and gram transports residents to higher-paying sources of poverty.

In 2003, the program guided the jobs in neighboring communities by conJackson-Windom area from organizing a necting them with current commuters. community rally to raising awareness about In Jackson, Circles of Support has poverty to creating a leadership structure helped four families purchase homes, 11 that inspires change. individuals enroll in college, 12 families “What drew me to Horizons is that it’s a obtain better jobs, and nine families become complete package,” says Monica Herrera, independent from state programs.

The changes in awareness and perHorizons state coordinator through the ception can be seen at monthly leadership University of Minnesota Extension Service. dialogues that address community obsta“It engages a community.” cles to ending poverty—and even in a In Eveleth, a small Iron Range town of speech Melinda’s 15-year-old daughter, fewer than 4,000, local Horizon volunteers Tessa, gave to Minnesota legislators in have taken the community engagement conApril. As a rising high school volleyball cept even further by launching a widespread star, she fears she won’t get a college scholgrassroots campaign. A massive door-knockarship because her family can’t pay for ing effort took the community’s poverty summer and traveling leagues, where issues and goals to every household. “What scouts are often in attendance. we found is a need to get people from every “If (social service agencies are) the only group involved,” said Heather Lindula, ones working on ending poverty, it’s not Eveleth coordinator. “If we focus on one going to happen,” says Greg Warner, group, not all the needs are going to be met.”

Horizons coordinator in Jackson and Low-income residents have joined leadWindom. “It’s much better to engage the ership programs and city boards. During community and give people the right tools.” snack time in the schools, community donaReact at IQMAG.ORG tions provide milk to all students, not just

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Summer 2008

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Initiative Quarterly • IQmag.org

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Initiative Quarterly • IQmag.org

$20,614 per year. If your underprivileged family of four is able to scrape together more than that, congratulations. You have now ascended from the depths of poverty. You are free from many shameful burdens of public assistance, because you have crossed the federal poverty line. But don’t celebrate for too long. In a system laden with Catch-22s and frayed safety nets for the working poor, you may be worse off than you were before.

Could your family make it on $20,614 a year?

Let’s do the math.

Summer 2008

13

According to the “Consumer Expenditures Survey,” by the U.S. Department of Labor, even the most modest roof over your head costs $5,756 per year for a family of four. Oh, you want electricity, heat, water, and public utilities? Add another $2,656. Your account balance: $12,202 Poor people should get a job, right? Well, you’ll need a way to get to work. There goes $5,300 needed to own, maintain, and fuel a vehicle. (Remember, many rural communities don’t have public transportation.) Your account balance: $6,902 You have to eat, but don’t expect to eat well. Even with food stamps or other public assistance, your family will spend $4,064 for food. Your account balance: $2,838 Now, for healthcare, let’s assume that you’re lucky enough to work for an employer that contributes to your family’s health insurance. Even for basic coverage, plan on $2,329. And it’ll be more next year. Remember, if you skip it (as people often do), you risk losing everything. Your account balance: $509

Catch-22 In 2008, the Northwest Area Foundation developed Living with a Hole in Your Pocket, a documentary on the mind-wrenching Catch-22s of the nation’s public assistance system and the difficulty for families to overcome poverty. Here are some reasons why people in poverty struggle to get ahead:

Refusing a Raise

“(The federal poverty line) gives us a wrong picture of what it takes to make ends meet in this country.”

But what about the $2,600 in average subsidized childcare expenses? What about phone service? What about school supplies, winter coats, and boots? What about education to help you get a better job?

“You don’t even get to clothing and you’re in the hole,” said Kathryn Stolpman, supervisor of Emergency Services at Catholic Charities in St. Cloud. “That means these people have not bought anything. They haven’t even bought a birthday present for their kids.”

A majority of Minnesotans believe that a family of four needs to earn twice the federal poverty level to make ends meet in their communities, according to a survey by the Northwest Area Foundation released in April. Only 5 percent thought the federal amount would suffice.

FALLING SHORT The Catholic Campaign for Human Development, the nation’s largest funder of self-help programs for the poor, developed a video outlining the costs of basic necessities to demonstrate why many poor families are forced to make hard choices every day—while living in an America that makes it nearly impossible to get ahead. “(The federal poverty level) gives us a wrong picture of what it takes to make ends meet in this country,” said Sylvia Burgos Toftness, communications lead at the Northwest Area Foundation.

“By not knowing what the poverty line is, it’s harder to find and identify solutions to end poverty.”

The federal poverty guidelines, first developed in 1963, are based on food expenditures and outdated assumptions about a fami-

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Initiative Quarterly • IQmag.org

Bob Benes, executive director of Lakes and Pines Community Action Council in Mora, said that some of his clients in poverty have actually refused raises in pay. That’s because the meager increases can disqualify them from receiving public assistance, a net loss that families in survival mode can’t afford. “That’s really counter-intuitive, but that’s the reality,” he said.

Feast and Famine Workers, who are often in seasonal or volatile manufacturing jobs, can receive less in food stamps when they need it most because eligibility is tied to how much they earned in a previous time period. “It doesn’t always account for the highs and lows,” said Sylvia Burgos Toftness, communications lead at the Northwest Area Foundation.

Why Try? Many who depend on the Minnesota Family Investment Program (MFIP), the state’s welfare reform program that lapses after five years, will lose assistance before they can complete a life-changing college degree. Knowing that they aren’t likely to graduate without help is a big deterrent, according to Benes.

Watch the documentary at www.mnchannel.org/video_archive.php or order a free DVD at www.nwafsolutionsdepot.org.

Sources: Lakes and Pines Community Action Council, Northwest Area Foundation, Catholic Charities of St. Cloud, Twin Cities Public Television

Redrawing the Line True Poverty in Central Minnesota Social service agencies point to 200 percent of the federal poverty line, or $41,228 per year, as a more accurate indicator of the number of families struggling to make ends meet. In central Minnesota, it’s a tale of two worlds, with some of the poorest and wealthiest counties in the state.

Below 200% of Poverty Line

State Rank (1-87)

Median Household Income

Annual Living Wage*

Wadena

39.3%

3

$34,615

$42,240

Todd

37.8%

4

$35,369

$44,604

15.1-25.0%

Cass

35.9%

7

$38,906

$43,944

25.1-35.0%

Morrison

32.1%

18

$41,016

$44,592

Pine

30.6%

33

$39,663

$51,624

Crow Wing

29.4%

39

$41,983

$46,068

Mille Lacs

29.0%

43

$41,527

$49,104

Kanabec

28.5%

45

$42,586

$51,204

Stearns

25.1%

61

$47,032

$44,328

Benton

25.0%

63

$46,035

$45,876

Isanti

19.3%

75

$55,435

$55,824

COUNTY

Chisago

17.2%

80

$61,376

$56,364

Wright

15.8%

81

$63,448

$54,996

Sherburne

15.1%

82

$64,650

$55,176

Below 200% Below 200 % of Line of Poverty Poverty Line

Cass

35.1-45.0%

Wadena Crow Wing

Todd

Pine

Mille Lacs

Morrison

Kanabec Benton Stearns

*Calculated for family of four with two adults working. Covers basic expenses of food, housing, healthcare, transportation, childcare, clothing, and taxes.

Isanti Sherburne

Chisago

Wright

Sources: U.S. Census Bureau, Northwest Area Foundation, Jobs Now Coalition

ly’s budget. Mollie Orschansky, of the Social Security Administration, calculated the poverty guidelines by multiplying a family’s average food cost by three. The guidelines, based on the assumption that families spent one-third of their income on food, were used to determine eligibility for the USDA’s economy food plan.

Since then, the government has updated the value for inflation. But that’s it.

“They have only grown older and less applicable to people’s lives,” said Bob Benes, executive director of Lakes and Pines Community Action Council. The Mora-based council provides services to low-income residents based on the federal guidelines.

About 8.1 percent of Minnesotans fall

below the poverty line, according to the U.S. Census Bureau. If you multiply the federal poverty line by two—which many service agencies believe is a more accurate assessment—the number soars to 26.1 percent of the state’s population living in poverty, according to the Northwest Area Foundation.

IMPACT OF INACCURACY This underestimation has led social service agencies like Lakes and Pines to widen eligibility standards. Central Minnesota agencies now commonly use 150 percent, and sometimes up to 200 percent, of the federal poverty line. At 200 percent, a family of four would earn about $40,000 annually and an individ-

ual would earn $19,600 a year.

“There is not a week that goes by that people are just over a guideline and are turned away,” Benes said. “It definitely falls short, but it’s hard to judge how short.”

The lack of accessibility has led even individuals who do qualify for assistance to not bother applying, Benes said. He estimates that about one-third of eligible aging residents in the council’s service area do not apply for assistance.

Limited funding also tightens the number of people served within the guidelines. Head Start, seen as among the most effective programs to lift people out of poverty, faces funding shortages that prevent it from meeting the critical need in CONTINUED ON PAGE 47 Summer 2008

15

ENCIRCLED: Grandmother Rita Miller, Mother Jennifer Perez, and Ahnicka.

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Initiative Quarterly • IQmag.org

passing down poverty in minnesota

By Sarah Colburn • Photography by Jim Altobell

It was the longest seven minutes of her seventeen years.

Jennifer Perez paced nervously in the bathroom of her boyfriend’s mother. She imagined what life would be like if the test was positive. She wondered if she’d be capable of raising a child, if she’d be good enough. Her grandmother was poor. Her mother was poor. And now—she stared at the pregnancy test—would her child be poor, too?

She wanted more. She wanted family vacations. She wanted to stop the constant grind. She wanted to end the chaos of drug and alcohol addiction. And most of all, she wanted out of poverty. But as her abdomen swelled, so did the barriers to having a better life. Still, Jennifer threw out any lingering shred of trepidation and wholeheartedly welcomed the birth of her daughter.

Today, inspired by her daughter, Ahnicka, Jennifer continues to fight against an unwanted inheritance called generational poverty. She is among the thousands of Minnesotans raised in poverty who are now poor themselves. According to a Minnesota Family Investment Program (MFIP) study, about 32 percent of those who use public benefits remember their family receiving cash assistance when they were children.

During her toddler years, Jennifer grew up in what her mother, Rita Miller, remembers as a loving home. Though there wasn’t an extra penny and the food may not have been great, there was always something in the cupboard. For a while, they even ate meals together.

By the time Jennifer, the youngest of three girls, turned six, Rita was Summer 2008

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“There are really only two ways to get out of poverty— EDUCATION and RELATIONSHIPS.” —Dr. Ruby Payne National expert, researcher, and author on poverty issues

full-swing into drug and alcohol addiction. What began as occasional nights away became an everyday absence, leaving the eldest to care for her sisters. Following her mother’s example, Jennifer began drinking and doing drugs in junior high school, and then moved out with her boyfriend at 15 or 16.

“For a 17-year-old to be thrilled they’re pregnant proves how dysfunctional my life was,” Jennifer said. “It proves how much I wanted to love someone unconditionally.”

Rita waited to see how her daughter would react to the pregnancy. When Jennifer appeared happy, she offered her lifelong knowledge of social services to her daughter. Before Jennifer’s twelve-week medical appointment, Rita helped her apply for cash and food assistance. The

cycle of generational poverty was passed on.

Dr. Ruby Payne, a national expert, researcher, and author on poverty issues, said that learned behaviors, addiction, early pregnancy, biochemical imbalance, and disabilities perpetuate the poverty cycle. Instead of spending time on hobbies, vacationing, and other middleclass social activities, Payne said, poverty is about surviving day to day.

That means trips to agencies for help with food, utilities, and rent. If those appointments come during work, they often take priority. “You spend a lot of time at survival—the tyranny of the moment,” Payne said. “If you’re (living) crisis to crisis, you’re not going to do much planning.”

Jennifer rented an apartment in the same low-income building where her mother once lived. And she accessed social services to make ends meet.

In June of 2002, in what Your chances of being born into poverty depend would have been her senior largely on race, not just your parents’ choices. Here year, Jennifer gave birth to are the ratios of Minnesota’s underprivileged chilAhnicka. She relied on dren, who are at greater risk of future substance friends to babysit while she abuse, mental health issues, and incarceration. finished high school.

Ahnicka’s father lived with ALL CHILDREN ......................1 of every 9 in poverty them for a few months before Black Children ....................................................3 in 7 moving out.

American Indian Children ..............................1 in 3 Jennifer’s last moment Latino Children ..................................................1 in 4 as a typical teenager was Asian Children ....................................................2 in 9 during her high school White Children ................................................1 in 14

Source: Children’s Defense Fund

colors of poverty

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Initiative Quarterly • IQmag.org

prom. She wore a red dress and danced all night. Although she was the same age as everyone else, she didn’t feel like it. “It was the last time I was going to have that,” she said, “the night out, just a high-schooler without any real problems or responsibilities.”

Soon after, reality hit hard. The natural gas at her home was shut off a few times, after several late payment notices. She pulled Ahnicka’s playpen into the living room and turned on the oven and space heaters. They slept at her sister’s house. “It was scary,” Jennifer said.

Jennifer developed co-dependent friendships that Payne said are typical of generational poverty. Those friendships can mean the difference between food on the table, a ride to work, or a safe place for your child when benefits don’t last the whole month. The favors are part of the culture, Payne said. Friends often help without question, knowing that their last $20 will come back in their time of need.

Payne also offered an explanation of why some people in poverty seem to squander money on luxuries rather than paying bills. Simply put, they don’t see a way out. When people are in survival mode, there is little hope for change.

Jennifer followed suit. After winning $1,000 in a singing competition, she spent $300 at the bar and the rest on summer clothes.

“At the time, I didn’t think about it,” Jennifer said. “(The clothes were) something you could

hold and touch and see, and those other things seemed unattainable.”

Some of her friends fell into what Jennifer calls “the poor man’s trap.” They filled carts at the dollar store with deals like $1 bars of soap, when they could buy four bars for $2.26 at the grocery store. In line with what Payne reported in her studies, the friends who were the worst off usually spent the most impulsively.

Though the relationships were necessary for Jennifer to survive, Payne said they have to be broken to leave poverty. Often, it takes another person truly investing time to show someone in poverty that there’s another way. “There are really only two ways to get out of poverty—education and relationships,” Payne said. “How can we expect people to manage money when they never had a nickel and don’t know anyone who does?”

In 2003, as Ahnicka turned a year old, Jennifer had one of her most self-defining moments—she put her past behind her and

graduated from Aitkin High School. “It was the biggest accomplishment I could ever imagine,” Jennifer said.

Her voice quivers when she talks about past friends. “I want the world for them, but carrying them along with me was bringing me down,” she said. Her realization of another lifestyle and culture came when she started taking classes at Central Lakes College in 2004. “I knew I needed to have a career, not just a job.”

She went to the Aitkin Workforce Center to create an employment plan to continue receiving benefits. That’s where she met Kari Paulsen, an employment counselor who took the time to help her create a plan that allowed for college and volunteering. In 2005, Jennifer volunteered at Advocates Against Domestic Abuse (AADA), a support agency for battered women and children. Four months later, she was hired full-time as a transitional housing advocate.

For the first time in her life, Jennifer opened

up to her fellow colleagues. “I felt like I could tell them about these things that I was so ashamed of in my life,” Jennifer said. “I had no job skills. I had a terrible history. I just had nothing to offer them. They saw something inside of me that I didn’t even know was there. They celebrated me.

They just made me feel like I was so important.”

Though Jennifer, now 24, is still at AADA, she wants more. In May, she graduated from Central Lakes College and plans to start a bachelor’s degree program in social work in the fall.

Ahnicka will begin the first grade.

Jennifer is working to get off of public assistance and plans to stay at AADA. She’s mending her relationship with her mother, who has now been sober two years. “These last few months, I’ve felt this internal shift happen,” she said.

According to Payne, it’s a shift that can only be made with new relationships, education, and hard work.

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worlds of truth To contrast the life perspectives of social classes in America, Dr. Ruby Payne, in her book, A Framework for Understanding Poverty, suggests how we might see the world through different lenses.

How do your views differ from people in generational poverty?

Poverty

Middle Class

Wealth

To be used, spent.

To be managed.

To be conserved, invested.

Time

Present is most important. Decisions made for the moment based on feelings or survival.

Future is most important.

Decisions made against future ramifications.

Traditions and history are most important. Decisions made partially on basis of tradition and decorum.

Education

Valued and revered as abstract, but not as reality.

Crucial for climbing success ladder and making money.

Necessary tradition for making and maintaining connections.

Survival, relationships important.

Work, achievement.

Financial, political, social connections.

Believes in fate.

Cannot do much to mitigate chance.

Believes in choice.

Can change the future with good choices now.

Noblesse oblige.

(With power & wealth come responsibility.)

Money

Driving Force

Destiny

Summer 2008

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With a little help, the Rothbauers of Cambridge rescued themselves from a downward spiral of debt, late payments, and collection notices. It’s a place they never imagined they would be.

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Summer 2008

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Karry Rothbauer took a deep breath before walking through the doors of the Cambridge Food Shelf. Once a donor, she was about to become a recipient. There was just one problem—she wasn’t poor, at least not yet. She knew her husband, Michael, would have gone hungry before asking for help. “This is just a moment in time,” she whispered to herself. “It’s just one time.”

When Michael Rothbauer was laid off from his construction job for five months, the food shelf was a last resort. It allowed the family to save on groceries and pay other bills, stopping their downward spiral of debt. The Rothbauers are among the thousands of unsuspecting Minnesota families who have at least one adult working but are just a paycheck or crisis away from situational poverty.

The situations are as unique as the people experiencing them—job loss, divorce, health diagnosis, childcare letdowns, vehicle repairs, home foreclosure. The common threads are suddenness, disbelief, and lack of preparation.

“We’re a hard-working family,” Karry Rothbauer said. “This kind of took us by surprise.”

2007 was a busy year for social service agencies like Bridges of Hope in Brainerd. According to Executive Director Tami Lueck, 57 percent of their 1,040 requests for financial assistance were from people working full- or part-time. Working families sought assistance for the following: • 53 percent for housing and mortgages • 26 percent for utility services • 10 percent for transportation, gas money, or vehicle repairs • 6.5 percent for food and clothing Without those resources, Lueck said, families can quickly fall into poverty.

Though asking for help is difficult, waiting can mean deciding between putting food on the table and providing healthcare for your kids. “Some of those things shouldn’t be choices parents have to make,” she added.

The Rothbauers knew they would face difficult choices if they didn’t get more help. Karry had just graduated from college and started working for Isanti County when her husband lost his job.

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They had one unreliable car and a credit rating damaged by medical bills that went to collection while the Rothbauers waited for the insurance company to pay them. Their top priorities were paying the mortgage and the utilities.

The Rothbauers lived in a rural area with no public transportation, so Karry needed a car to drive herself to work and their son to school—although their vehicle always seemed to need costly repairs. Karry often took it to a mechanic and hoped that the people under the hood were honest. After several service appointments and hundreds of dollars, the car would break down time and again.

Although they were able to postpone credit card payments, everything else piled up.

They were in jeopardy of falling behind on the house payment and were ready to apply for energy assistance when they heard about the

calls, or you know you’re going to have to limit the amount of groceries you get. You wonder where you’re going to get the money to pay the bills. It snowballs.”

A lack of transportation is one of the main barriers to families getting ahead. With poor credit, interest rates become exorbitant. Even if families can afford a car payment, Leibel said, many times they can’t cover the insurance.

“One of the primary challenges of rural poverty is transportation,” said Chris Fastner, VISTA program manager at the Initiative Foundation. “You have to travel more miles between home, work, school, and social service agencies, and there’s usually no public transit system to help you get around.”

At the Tri-County Action Program in St. Cloud, executive director Paula Erdmann sees more working families trying to help them-

Ways to Work program through Communities Investing in Families, a nonprofit organization.

Stefanie Leibel, executive director, said the program allows people who make less than the federal poverty guideline to receive a $4,000 low-interest car loan or $750 for repairs. Recipients have to be working or have great potential to be working with the help of a vehicle. “We want to keep families working,” Leibel said. “We don’t want them to go on assistance and (then have to) pull them back up.”

For the Rothbauers, it was a turning point.

Karry no longer needed to cut other corners to cover unexpected and expensive car repairs.

She borrowed $4,000 to purchase a better vehicle, a loan she would never have received from a bank. As she made $100 on-time payments each month, her credit score inched up.

“Just one setback,” she said. “It can affect so many areas of someone’s financial life and emotional life. You get (collection) phone

selves. They want information on budgeting, financial literacy, and advice on which bills to pay when they’re short, she said.

Her colleague, Caroleen Boeder, a housing counselor for Tri-CAP, was accustomed to receiving three or four calls a week from people in foreclosure. Now, she receives at least that many every day.

“If you don’t budget your money or save just a little bit of money, you can lose your job and lose your livelihood,” she said. “Just a few months down the road, you could be in the same situation. We get a little too comfortable.”

With the downturn in the housing market, Michael Rothbauer was recently laid off again, but planned to be back at work this summer. The couple has been able to re-establish their credit and get a standard vehicle loan.

“My financial situation is better and my credit is better,” Karry said. “It definitely makes a person’s self-esteem better.”

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A YEAR TO FORGET: Powered by foreclosures, fuel prices, and a foreboding economy, 2007 proved oppressive for working families, according to Tami Lueck (right) and Bridges of Hope in Brainerd. The Rothbauers (below) weathered the storm.

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24

Be honest. You’ve heard them, thought them,

thought you’d want to know if what you’ve heard is,

or passed them along—those rampant, often ugly

indeed, true. To that end, we placed the raw rumors at

generalizations about people in poverty. Whether you

the doorsteps of central Minnesota’s hands-on profes-

reside on the right or the left, whether you believe in

sionals who work directly with issues of poverty.

unending charity or unswerving responsibility, we

Here is what they had to say . . .

Initiative Quarterly • IQmag.org

“Get a JOB and stop leeching off the system.”

“We have a tendency to make judgments, and many times those judgments are not based on facts,” said Kathryn Stolpman, emergency services program supervisor for Catholic Charities of St. Cloud. “There are a number of people that we serve who work, but they don’t make enough money to feed their families.”

According to Stolpman, the vast majority of individuals and families in poverty do work and only use government and social services to help them through particularly rough patches. Catholic Charities Emergency Services, one of the largest social assistance agencies in central Minnesota, served 11,000 households in 2007, but only an average of three times each for the entire year.

“It used to be poor people (using the food shelf), but it’s now the middle class. It’s people with jobs,” said Bonnie Sahf, family services director for the Salvation Army in Brainerd. The agency provides about 14,000 pounds of food to an average 600 households each month. “You get a 3 percent raise and that’s not enough to cover the cost of gas now, let alone food.”

More than half of food shelf visitors in Minnesota are employed, but about two-thirds of food shelf users earn less than $1,000 per month and are struggling to put food on their tables, according to Minnesota FoodShare, an interfaith collaboration that raises money and food annually for more than 260 food shelves statewide.

“You’re talking about a handful of people (that abuse the system),” Sahf said. “With the cost of food, gas, and heat going up, middle-class people are struggling. They’re trying to survive. They’re trying to get better jobs. They’re trying to get into schooling.”

“Poverty is a

“It’s not the white people.

It’s all the MINORITIES.” Please forgive us, but this sentiment is definitely out there. Poverty comes in all colors, but in central Minnesota, the predominant hue is white. At Catholic Charities in St. Cloud, about 74 percent of the households served at the food shelf are Caucasian. That holds true nationwide, with whites representing 47 percent of the American poor.

And while it’s true that mothers may receive additional financial assistance for each child they have, the widespread notion of childbearing as a work-avoidance strategy is false. In 2005, a family received an average of $60 a month per child nationwide. Some states provided no additional aid for another child, while others increased a family’s assistance by only $25.

“It’s just an old myth,” Sahf said.

choice. It will never happen to me.”

“Get divorced,” said Stefanie Leibel, executive director of Communities Investing in Families. “Get employment where they don’t have health insurance, and then get sick. Become unemployed.

Have gas prices double in two years. A lot of people find themselves in situations out of their control.”

More than 20 percent of Minnesota households earn less than $25,000 a year, placing them at greater risk for crisis-induced poverty,

according to a 2008 Northwest Area Foundation survey. Two-thirds of Minnesotans worry at least some of the time that their total income will not cover their family’s expenses.

“We are seeing more and more people in crisis,” Sahf said. “I’m seeing a lot of people who are $1,000, $2,000, or $3,000 behind on their heating and electricity. A few years ago, it was usually $300 to $500.”

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“There’s more than enough ‘WELFARE’ to help.”

In 2005, the average amount of public assistance for an adult with two children was $478 a month. That’s only $70 more than what the same-sized family received 20 years ago.

“There is not a week that goes by that people aren’t just over the guideline and turned away,” Benes added.

His agency’s funding only allows it to serve about 65 percent of people eligible for its programs.

“Try eating on $21 a week,” Stolpman added.

“That’s the equivalent an individual receives on food stamps.” The federal poverty level of about $20,000 per year, which is the baseline for public assistance eligibility, often places families at an immediate disadvantage and prevents them from rising out of poverty.

Sadly, only 29 percent of poor Americans see their incomes increase enough to rise out of poverty, putting the United States behind other advanced nations like Sweden, Germany, Canada, and the Netherlands, according to research by the Paris-based Organization for Economic Cooperation and Development.

“Go to SCHOOL and get ahead like the rest of us.”

In May 2008, the Minnesota State Colleges and Universities Board of Trustees approved a budget that will hold tuition increases to 2 percent for students attending community and technical college, and 3 percent for state university students, for the next academic year—but that comes after a decade of hikes. From 2000–2004 alone, students had to cope with double-digit tuition increases, driving the price of higher education up nearly 60 percent in four years.

“I think (education is) definitely out of reach for a lot of people,” Sahf said.

According to Bob Benes, executive director of Lakes and Pines Community Action Council in Mora, those living in rural poverty face additional challenges. Education is less accessible because of a lack of nearby educational institutions or training programs.

When returning to school, individuals often lose the public assistance they need to support themselves and their families. “It doesn’t make any fiscal sense to do it,” he said. “There’s a wrinkle in the system that moves people backwards instead of moving them forward.”

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26

Initiative Quarterly • IQmag.org

BY TENLEE LUND • PHOTOGRAPHY BY JIM ALTOBELL

A pregnant teenager embraces her abdomen and weeps.

A farmer worries that he will squander everything his father left him.

A young woman loses her marriage, and then her home.

A mother tightens her fist as others predict failure for her kids.

A refugee wonders if he will ever have what America demands.

Each devastating story of poverty is as unique as the person experiencing it.

Sadly, there is no magical solution.

But for all of them, there is hope.

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Lisa’s Story After graduating from Crosby High School in 1983, Lisa worked part-time at a local convenience store, lived with her mother, and partied with her friends. Like many teenagers, she made one life-changing mistake.

“I got pregnant young because I had no future goals. I had a child and had no resources or insurance. I had no concept of what it took to pay bills and support a family.”

Lisa enrolled at Brainerd Community College and then transferred to Bemidji State University. After another failed relationship, she gave birth to her second son.

Broke Lisa balanced life as a student and parent for twelve years, often drained from the never-ending demands of motherhood, professors, and poverty. Progress in one area was usually tempered by setbacks in others. “I learned to type papers with a child on my knee. I was never confident, because I was never able to save

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money for all those challenges that pop up, like car repairs.”

In Bemidji, she couldn’t find an affordable place to live, so she made a 90-mile commute for a year and a half. “I found a home daycare where my younger son stayed for a few months.

Then, the week of finals, the lady called and said she was moving—that night. Of course, all you can do is cry.”

Power Within “I got my discipline from anger,” she said. “I had so many people tell me that I couldn’t do it and that my kids would be delinquents. I was bound and determined that wouldn’t happen.

“But I was also fortunate to have people in my life who were supportive. One of them was my mother. There were also the professionals in the system, like my case manager at the WorkForce Center, who were mentors to me, helping me see there was a different future out there. Otherwise, I would have never thought I could get a bachelor’s degree.”

Final Escape In 1995, Lisa graduated from Bemidji State University with a degree in social work. Today, she is the executive director of Advocates Against Domestic Abuse in Aitkin, where she offers aid to women who are struggling to conquer some familiar barriers.

Owning a home is just one of her proudest accomplishments, a symbol of self-made success and an everyday reminder of her rise from poverty, complete with a welcoming front porch. It’s modest, but it’s hers.

“For us, buying this house was monumental. When you rent, you’re always worried about neighbors, landlords. The kids have to be quiet, and you hope they don’t write on the walls. Now we can do whatever we want. We even have a dog.”

Her older son is a senior in college and her younger son, a high-school junior, recently brought home a straight-A report card. “I had to do it because I had two kids to support. It was not an option to fail.”

Ivan’s Story Ivan Cholopray, Sr., is a quiet, polite man. In his native Liberia, he was a homebuilder and pastor. “Before the war, my country was the most peaceful country on this earth. Now our country is war-torn. That is why we fled.”

Ivan, his wife, and nine children escaped to Ghana on New Year’s Day in 2000. “We had nothing, absolutely nothing.” They spent the next six-and-a-half years in a camp that housed 45,000 refugees. They barely managed to survive.

Ivan learned that his oldest daughter had fled to America and was living in Minnesota. That news started the long relocation process. When their travel date finally arrived, one daughter was ill and could not emigrate. Ivan’s wife stayed behind.

Broke Minnesota offered boundless opportunities and immediate culture shock. Ivan struggled to navigate American systems and find employment. Most of his skills and experi-

ence seemed insignificant, and he constantly worried about his wife and daughter.

“It’s difficult when you don’t know the system, if you don’t know what to do and how to do it and when to do it,” Ivan said.

“Everything in America takes money.”

Transportation was an unforeseen barrier. With no public transit in Zimmerman, it was nearly impossible to coordinate the transportation needs of Ivan and his children, providing rides to job interviews, clinics, and schools.

Ivan also faced the constant pressure of getting a driver’s license and finding a job. “If you can’t drive, you can’t get a job,” he said.

Power Within Through the efforts of Great River Faith in Action and Tri-CAP, volunteers pitched in.

The job of case management fell to David Schlough. He coordinated volunteers who helped Ivan navigate American roads as well as American systems.

Volunteers also helped to enroll Ivan’s

children in public schools, a complicated process, since their past academic and medical records were still in Liberia.

“Americans are very, very friendly people,” Ivan said. “The men and women made a schedule to teach me how to drive. David would come from St. Cloud and help me to drive.”

Final Escape It took almost two years, but Ivan reunited with his wife and daughter. Three of their children are now attending college. Ivan found a job at the Cargill plant in Big Lake.

Schlough, who is hosting two of Ivan’s sons while they attend St. Cloud State University, said that he still takes friendly calls from Ivan’s family. “Over time, my support function has morphed into more of a friendship.”

“I’m a simple man. I’m not an important person,” said Ivan, who is now a pastor with St. John’s Lutheran Church in Zimmerman. “I love to sing and I love to pray. I feel very much at home.”

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Kari’s Story Kari Sholing had it all: a nice home, two great children, part-time jobs that allowed her to keep homemaking a priority, and a solid middle-class future—until her divorce.

Kari and her children—son, Levi, now eleven, and daughter, Brenna, now nine— were able to stay in their family home until it sold. Unfortunately, the divorce devoured all of the equity, leaving no proceeds from the sale.

Broke Kari worked with a realtor for nearly two years, searching for a house she could afford.

The landscape was bleak.

“I did not qualify for anything. I made too much money for Section 8 and I didn’t make enough for a conventional loan.

Because I was a previous homeowner in my marriage, I didn’t qualify for first-time homebuyer programs. It was dead end after dead end trying to find affordable housing.

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Initiative Quarterly • IQmag.org

“At one point, I thought, ‘What are my options when I lose my home? Do we go to a homeless shelter?’

“The kids were wondering, too. I kind of joked, ‘Well, maybe we’ll live in a cardboard box.’ They knew we weren’t really going to do that, but they also were completely unable to foresee what was coming next. I couldn’t, either.”

Power Within When their family home sold, Kari found a house to rent—until it, too, sold out from under them. Then she saw a flyer for Central Minnesota Habitat for Humanity.

She attended the initial meeting with a friend.

“There were hundreds of people there, and Habitat was announcing they were building seven homes.”

Although she was hesitant, Kari’s friend encouraged her to apply. Initially, she didn’t make the income guidelines but,

with the inclusion of regular child support payments and consideration of her clean credit history, she qualified.

“So many people kept telling me I didn’t qualify for this, I didn’t qualify for that, but somewhere in that whole circle of things, I knew something should work out somewhere—and eventually it did.

“Had I given up, I don’t know where I’d be.”

Final Escape Today, Kari and her children have a new Habitat for Humanity home.

“When we had our welcome ceremony, Levi and Brenna had written a note to Habitat saying they were so thankful they didn’t have to live in a cardboard box.

“It gives me a sense of ownership, that this is where I belong. This home has given us the permanency to know we’re not moving again. After all, your home is what you build the center of your life around.”

Sarah’s Story Sarah Resch is an independent, determined mother—who recently turned 18. At age 15, in the ninth grade, she gave birth to a son. “I lived with my mom while I was pregnant, and until Jacob was about a yearand-a-half old.”

Her relationship with her mother deteriorated, as did an ill-fated attempt to rent a room from her father. By age 17, Sarah and her son were homeless.

Broke “I lost my job and my car broke down. I thought I could get caught up, but it never happened. I just kept getting farther and farther behind.

“I was facing eviction because I was so far behind on my rent. I think I owed $1,400 and had seven days to pay,” she said. “I went to every agency that could possibly help and found out you have to be 18 for every single program.

“I thought, ‘I’m going to get evicted and me and my son have nowhere to go.’ It was the most terrible time I’ve had in my whole life. It’s the only time when I thought, ‘I can’t do this.’”

Power Within Sarah received $100 each from Lutheran Social Service and Bridges of Hope to help ease her financial crisis. LSS also intervened with the landlord, promising that the rent would be paid in full.

An LSS counselor drew up a budget and relayed the importance of money-management skills. “They split my income into four weekly columns, and every cent went to pay what I owed,” Sarah said. “They told me, ‘You’re making enough money to get by. This is where it has to go.’”

Now she’s tremendously frugal. “I buy what I need. Some months are tighter than others, and if I call in sick, there goes any extra.”

Final Escape Today, armed with a tight budget, secure apartment, and a high school diploma from the Adult Education Center, Sarah works as a Certified Nursing Assistant in Brainerd.

She was able to take CNA classes along with her high school coursework, but her future plans include a college degree in elementary education.

Now that she’s old enough to access social programs, the only one she uses is health insurance.

“I obviously have to work hard, a lot harder than people that aren’t in my situation,” she said, “but I believe that you should not use (social services) unless you absolutely need them, because somebody needs them more than I do.

“If I hadn’t had my son, I would probably be just another juvenile delinquent going the wrong direction. That’s the way I was headed.

He saved my life, I’m pretty sure. When you’ve got someone else to live for, it changes things.”

Summer 2008

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Bill’s Story It’s rare but certainly not impossible—with hard work and a little luck, people can pull themselves out of poverty by their own bootstraps. Bill Kern is a strong-willed farmer. He always has been. At age 79, he still farms his family’s acreage and raises beef cattle north of Verndale. A grandson of German immigrants, he never married and lives in his childhood home with his sister, Mary.

“My dad bought this land in 1918,” he said. “He originally had 360 acres, and I bought 480 more. I mortgaged everything and I owed the bank $60,000.” When interest rates shot up to 18 percent, Bill faced financial ruin.

Broke While his father was still alive, he had some stern words for Bill. “He told me, ‘You’re going to lose everything that I paid for during the Depression years.’ That gave me the incentive to dig in.”

To make the payments, Bill sold his feeder cattle, worked two jobs in the Twin Cities, and drove back to Bluegrass to farm on the weekends. Like many farmers, he dreaded April 15th.

“The (property) taxes are eating me up,” he said. “They’ve been going up $700 a year every year and it’s catching up. People are losing their homes, some farms that they’ve had for 100 years, because they can no longer afford to live there.”

Power Within Working the farm made the difference.

When cattle prices came back up, Bill finally got out from under the bank loan. Last year, he was fortunate to put in a bumper crop of hay. “That’s what’s saving me. I’ve got more than I need so I’m selling hay for extra income.”

Today, he and his sister live on $419 a month in Social Security, “because back when I should have been paying money in,

I was paying off that debt. There was no profit those years when I owed the bank all that money.” Veteran’s Administration and Medicare benefits cover a fraction of their prescription medicine costs.

Recently he sold 120 acres of land to make ends meet. “This is what’s happening to a lot of people. They have to sell part of their land to survive on what’s left.”

Final Escape For now, Bill and his sister are able to make ends meet. Regardless of what the future may hold, Bill said that he will always fall back upon his inherited assets of fertile land and a strong work ethic.

“I’m not one to think the government should step in and pick up the burden. My grandfather always said, ‘Boys, remember one thing: the best security on earth is the earth. The land will feed you if you work it.’

And it’s true.”

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Initiative Quarterly • IQmag.org

Summer 2008

33

AMERICAN SERVICE

BY SARAH COLBURN

Energy Stars VISTAs Power Nonprofits against Poverty

I

n early 2006, Jason Edens had a great big idea and some great big problems. He and his nonprofit team at the Backus-based Rural Renewable Energy Alliance (RREAL) were installing solar-air heating systems that could help families in poverty heat their homes using less energy, public assistance, and carbon emissions.

The solar thermal collectors were shipped from across the country, but the price tag was high. When they finally arrived in Minnesota, some had to be refurbished and others were unsightly or incompatible with home HVAC systems. The manufacturing process wasn’t consistent enough for mass production.

Edens’ team spent more than six months designing a way to build a completely new system from scratch, but they needed help with the engineering details.

Enter Graham Wright, a ten-year Kodak engineer with a case of renewable energy wanderlust. Wright is one the latest success symbols of Volunteers in Service to America (VISTA), a national anti-poverty partnership administered by the Initiative Foundation in central Minnesota.

“It connected in my mind that part of the problem with war and terrorism is related to our oil dependence,” Wright said. “I addressed that by working on renewable energy.”

Wright, who has Midwestern roots, filled out the VISTA application and, like an online dating system, he was matched with RREAL in the fall of 2006. He put his fourbedroom New York house on the market and packed his bags.

VISTA volunteers like Wright serve

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Initiative Quarterly • IQmag.org

for one year, working behind the scenes, bringing in resources, and organizing volunteers for organizations that SUN OF A GUN: Jason Edens (left) and nonprofits like the Rural wish to increase Renewable Energy Alliance have bolstered their anti-poverty efforts their innovation with the help of VISTAs like Tim Olhoff (right). and effectiveness in fighting poverty.

Minnesota has into a home. When it’s rolled out later in about 200 full-time VISTAs working with 2008, the collector could save budget-chalfive sponsoring organizations, including 15 lenged families up to 25 percent in heating to 20 coordinated by the Initiative costs, while reducing carbon emissions.

Foundation. The majority of Minnesota Bob Jones can attest to that. He and his VISTAs are 22 to 25 years old, but central wife, Kelly, live in Sebeka with their four chilMinnesota also attracts retirees and middren. A few years ago, times were so tight career shifters like Wright. that they were forced to apply for public “There’s no cookie-cutter approach to heating assistance. They heard about RREAL’s addressing issues of poverty,” said Chris system and were intrigued enough to sign Fastner, Initiative Foundation VISTA proon. The 25 percent savings on their heat was gram manager. “(The program) allows us to enough to prevent them from falling behind see who’s doing what in our region to fight on their bills. poverty, and support them.”

For their efforts, VISTAs receive an From 2006–2007, central Minnesota education award, health coverage, and a VISTAs have coordinated more than 14,000 monthly living allowance above the federal volunteer hours, recruited 913 volunteers, poverty guideline. They also get a chance to and raised $350,000 in cash, grants, and make a difference. other resources.

Without Wright’s skills and penchant Fastner said the numbers only show a for community service, Edens said that slice of the impact VISTAs have on their RREAL may still be working on a prototype organizations and communities. In Backus, instead of waiting on final regulatory that success is driving RREAL leaders to approval for mass production. make plans to replicate their program across Its new solar-powered furnace is a simthe Midwest and northern states. ple sidekick to a home heating system. The “The idea is to provide a long-term side-mounted box with a solar-absorbent answer to fuel-poverty,” Edens said.

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Summer 2008

35

CLASSROOM

BY TENLEE LUND

Saving Grace Anti-Poverty Agencies Teach Financial Literacy, Discipline

M

att Mathiasen is a deadbeat, and he’s proud of it. “‘Deadbeats’ used to be people who didn’t pay their bills,” he said.

“Now the credit card companies call me a ‘deadbeat’ because I pay my bill every month and they don’t make any interest. I do it out of spite.”

In the past, Mathiasen succumbed to the temptations of instant purchasing power.

He’s been forced into bankruptcy twice.

Now he’s fighting back, helping to teach others the lessons he learned the hard way.

Mathiasen, director of development for Communities Investing in Families in east central Minnesota, developed a curriculum that teaches people how to budget their money, handle financial obligations, and understand credit reports and debt collection practices.

He joined CIF last September, just as mortgage foreclosures, car repossessions, and payment delinquencies skyrocketed throughout their five-county service area. With Initiative Foundation funding and a full-time VISTA volunteer, he helped launch More Money—More $ense, a cooperative program with local financial institutions.

“No matter what (their age or) income level, people struggle with the basics of spending more than they have, not sticking to a budget, and using credit to bail themselves out,” said Geoff Bullock, financial educator with Lutheran Social Service of Minnesota.

Financial illiteracy has seemingly become a national epidemic. According to statistics gathered by the U.S. Department

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of Commerce, revolving personal debt exceeds $1.6 trillion and, in January 2008, savings as a percentage AVOIDANCE COURSE: Armed with life lessons from two bankruptcies, of disposable perMatt Mathiasen has revealed the hidden rules of credit, lending, and sonal income was financial planning to 255 at-risk adults in east central Minnesota. at -0.1 percent, Should financial literacy be taught in high school? indicating that Americans spent more than they seeking loans. “If they can’t afford it, I have saved. Yet the National Foundation for to say no. It’s a hard lesson,” he said.

Consumer Credit reports that nearly half of “Working poor isn’t necessarily defined by all Americans—four out of ten—do not pay how much money you make. It’s about how their credit cards in full each month.

According to Mathiasen, financial litlong you can survive if something happens.” eracy programs are springing up all over Nordin is among a growing number of Minnesota, a preemptive strike against financial professionals who insist that finanworking-class poverty. “The quickest way cial literacy and saving skills should be we can address this is to get a piece of edutaught and reinforced throughout the cation out there,” he said. “Knowledge is school years. Mathiasen and VISTA financial the key.” literacy coordinator, Julie Barstad, are workMore Money—More $ense sessions are ing with a bank in Mora to develop a high taught by volunteers who are also employschool program designed to educate ees of local financial institutions. Through teenagers before they dig themselves into a April, CIF facilitated twenty-five sessions for financial black hole.

255 participants.

“You can get trapped,” said Mathiasen.

“People are amazed that banks and “You borrow on your future, and after a credit unions will help them,” said while, even the minimum payments go up Mathiasen. “In almost every class, one or to where you can’t meet them monthly. I’m two people will make appointments with still in financial recovery but I like to think the presenter for the next day.”

I’ve learned my lesson.”

Gary Nordin, branch manager of Bank And it’s this hard lesson, relayed of the West in Little Falls, frequently sees through his own financial nightmare, which families with high earnings that are living is now grabbing attention and thwarting paycheck-to-paycheck—one misstep from poverty in central Minnesota.

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DOORSTEPS

BY MATT KILIAN & TENLEE LUND

Lingering Crisis

Cass 90

The Golden Ticket?

Homeownership Programs Still Build Wealth

Projected Home Foreclosures in 2008 Wadena 16

Total Foreclosures

Crow Wing 359 Pine 190

0–50

H

ard-working homebuyers could find a silver lining in the dark clouds of the central Minnesota housing market, as homeownership remains a promising path out of poverty.

Economic recession and the subprime mortgage crisis have contributed to nonmetro home sales prices decreasing about 5–7 percent since 2006, according to the Minnesota Association of Realtors.

Meanwhile, a 2008 Greater Minnesota Housing Fund study reported that 38,077 Minnesota mortgages were foreclosed between 2005 and 2007. That’s one for every 54 households. Another 28,000 foreclosures are expected in 2008.

“It’s a double-edged sword,” said John Kaliszewski, Initiative Foundation vice president for economic development. “This housing crisis can cast people into poverty just as easily as the ensuing price-cuts can help people get out of it.”

Plummeting price-tags may be bringing homeownership within reach for a whole new group of buyers, offering those with limited means an opportunity to build equity, family stability and community connections.

“This is a pretty good time to buy a house, especially if you’re a first-time homebuyer,” said Julie Gugin, executive director of Minnesota Home Ownership Center (HOC). “It’s a buyers’ market, which means there’s a lot of inventory, prices are down, and there are still first-time homebuyer programs available.”

One program, Family Assets for Independence in Minnesota (FAIM), has proven itself over the past ten years.

Through the use of “individual develop-

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Initiative Quarterly • IQmag.org

51–150

Todd 70

Morrison 90

Mille Lacs Kanabec 275 101

151–250 251–500 501–1,000

Stearns 463

1,001–2,500

Benton 176 Sherburne 559 Wright 1190

ment accounts,” FAIM matches up to $40 in monthly savings by a ratio of 3-to-1.

After two years of socking dollars away, participants accrue $3,840, enough to put a down-payment on a home, get an education, or finance a small business.

The two-year program also requires participants to attend a 12-hour financial literacy course. If participants choose to use their savings to buy a house, they must also attend eight hours of Home Stretch classes offered by HOC. For people in poverty, learning about homeownership can be an important first step. “Many lenders now require pre-purchase counseling,” said Bill Reinke, executive director of the Central Minnesota Housing Partnership. “Statistics prove the delinquency rates and foreclosure rates are lower if you’ve had that kind of education.”

“The FAIM program truly makes a difference in people’s lives,” said Paula Erdmann, executive director of Tri-CAP, one of the 28 community action agencies that administer it.

Between 2000-2007, FAIM families deposited $1.7 million and purchased 305 homes, which generated annual property tax proceeds of $549,000. Since 2003, FAIM has helped 24 central Minnesota fam-

Isanti 404

Chisago 249

Source: Greater Minnesota Housing Fund

ilies purchase homes. The program is funded by the State of Minnesota and several foundations. Bremer hosts the accounts.

“For many people, finding a way to afford a home can be their golden ticket out of poverty,” said Kaliszewki. “It finally gives them a real asset, something to work for and something to lose. It also provides a financial cushion in times of need.”

Some sweat-equity programs like Central Minnesota Habitat for Humanity are also benefiting from lower property values. In 2004, the agency set a goal of building 10 homes by 2010. With motivated families, donors, and volunteers, it has already built 22.

The American Dream may be making a comeback, according to Gugin.

“Homeownership is still one of the best ways for lower- and middle-income households to generate wealth, but it must be done thoughtfully and intentionally,” she said. “I think we’re going to come back to an environment where homeownership is looked at as something people enter into for the long-term stability of their families— with an understanding that, as a homeowner, they also play a role in the overall stability of their community.”

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> AWA R D S

Rock Solid Investment in Granite Equity Pays Off

I

t took creativity. It took courage. It took careful deliberation, weighing the potential returns against the risk. But in the end, the Initiative Foundation decided that becoming the first charitable organization to invest in Granite Equity Partners was a promising strategy for strengthening the regional economy.

On May 13th at its annual stakeholder meeting, Granite Equity honored the foundation with its first-ever Cornerstone Award for exceptional contributions and partnership.

“Being partners means we’ll get to know each other even better over the coming years, and find more ways to work together,” said Rick Bauerly, Granite Equity managing partner. “We appreciate the catalyst role that the Initiative

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Initiative Quarterly • IQmag.org

Foundation plays in our region, and the investment in Granite Equity is another example of it.”

Granite Equity is a private investment firm based in St. Cloud, investing financial and human resources in established Minnesota businesses in order to maximize their profitability.

Central Minnesota successes include DeZurik Water Controls in Sartell, MicroBioLogics in St. Cloud, and Atomic Learning in Little Falls. All have preserved hundreds of quality jobs and local business ownership, key factors in rebuilding a strong economy.

“We made this investment so that local businesses can reach their full potential,” said John Kaliszewski, vice president for economic development at the foundation. “Granite Equity

President Kathy Gaalswyk shows off the Cornerstone Award at Granite Equity Partners’ annual meeting.

is in the business of helping business, and that’s why we want to support them.”

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> ECONOMIC DEVELOPMENT

Back in Business Foundation Loan Saves 75 Jobs

I

n 2007, Homecrest’s production floor fell silent after 50 years of manufacturing highend outdoor furniture in Wadena. More than 140 workers were issued extended layoffs in the town of 4,300, a devastating blow to local families and the economy.

“We needed to put those people back to work,” said Dean Uselman, executive director of the Wadena Development Authority. “It was a $6 million project and WDA alone could not support the gap financing that was needed. It really took three organizations to make it happen.”

A partnership and loan package between the Wadena Development Authority, Region Five Development Commission, and the Initiative Foundation ensured Homecrest’s

reopening in 2008.

“It wasn’t an option for us to turn our backs on a company that has this kind of history and economic impact in one of the rural communities we serve,” said Tim DeJong, Homecrest; Dean Uselman, WDA; and Wadena Mayor Kathy Gaalswyk, Initiative Wayne Wolden Foundation president. “They strengthen their brand and market share. have a new vision and a solid business plan that “The company has gone through a couple positions them well for future success.”

Creative ownership and management of recent ownership changes, and our thrust practices through Homecrest’s parent comnow is to bring Homecrest back to its original pany, HC Holdings in Fargo, have also guarstate,” said Tim DeJong, Homecrest’s chief operanteed that the local business stays competating officer. “We plan to add another 50 jobs in itive in global markets. Leaders are confident the next few years.”

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Summer 2008

41

> PLANNING

Give and Get Charitable, Retirement Goals Converge for Voelkers

F

ran and Mil Voelker first heard Mark Lease’s presentation in 2003. They were intrigued by what he said and never forgot it.

“With some of our donors, there is an initial feeling of disbelief,” said Lease, the Initiative Foundation’s donor services officer.

“People wonder, ‘Can we really give money and make money? Is that legal?’ The answer is, yes, and that’s your reward for getting charities involved in your financial plan.”

In 2007, the Voelkers finally took the plunge, inspired by the foundation’s work in preserving water quality at Big Birch Lake near their former cabin.

They created a charitable gift annuity (CGA), a tax-deductible gift that pays a

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Initiative Quarterly • IQmag.org

guaranteed lifetime income based on age and market factors. The foundation invests the gift and receives the remainder upon the donors’ passing.

“The beauty of a CGA is that you can plan on it as a source of retirement income at a higher interest rate than a CD,” Lease Fran and Mil Voelker added. “A portion of the annual income is tax-free, and you’re supporting a cause you believe in. It’s a wintant to pay it forward, to do something for win for everyone.” people who aren’t as fortunate.”

“In giving to the Initiative Foundation, Test-drive a Charitable Gift Annuity at I think we’re helping to save the environifound.org. Click on Donor Resource Center. ment,” Mil said. “We just think it’s impor-

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Initiative Quarterly • IQmag.org

, CONTINUED FROM PAGE 15 “Poverty is a combination of factors that creates a lack of being able to thrive.

It’s not just about income. It’s a lot about access.

IT’S ABOUT A LACK OF ACCESS TO IMPROVE YOUR LIFE.”

the region. Benes estimates that Head Start, a federally funded program, serves about 60 percent of the children who are eligible for preschool programs, leaving many on waiting lists.

BETTER GAUGE

Statue, Chicago Botanic Gardens, 2007—John Erickson

The National Center for Children in Poverty and other organizations nationwide say 200 percent of the federal poverty level begins to capture the true face of poverty, but it still fails to show the complexity of poverty and how expenses vary by region. The center developed basic-needs budgets for 70 communities in 13 states to provide a more accu-

rate national representation of the varying costs of living.

The center puts the average cost of basic necessities nationwide at $40,000 a year for a family of four, but shows how it can soar to $50,000 in high-cost metro areas like New York City, and drop as low as $30,000 in some rural areas.

Today, Minnesota communities look to the “living wage” calculations of the Jobs Now Coalition for a more accurate picture of what a family needs to earn to cover the basic expenses of food, housing, healthcare, transportation, childcare, clothing, and taxes. The

Jobs Now data shows how living wages vary by region. The state average falls in line with the center’s budget.

But even with a change to the federal poverty income level, social services leaders say people looking to rise above poverty face a system that is all too often unfair and discouraging. Reforming the nation’s public assistance system requires looking beyond income level to truly define poverty and understand its impact on communities.

“Poverty is a combination of factors that creates a lack of being able to thrive,” Burgos Toftness said. “It’s not just about income. It’s a lot about access. It’s about a lack of access to improve your life.”

Benes has been working with a coalition of other leaders in the state to develop a definition for poverty. But they have learned that finding a solution can be as complex as the system itself. “It’s not an easy job to define poverty, where you draw the line and what you take into consideration,” Benes said.

“There’s no easy solution.”

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GUEST EDITORIAL

BY RUBY PAYNE

The Best Handouts

W

hile I was on a business trip in San Francisco, I appreciated having a driver to escort me around town. Of course, we got to talking. He told me that he was a Russian immigrant and a former teacher. His wife was once a medical doctor. I was impressed, until I learned that neither of them was able to practice in the U.S. due to licensure issues.

Curious, I asked him if he was still glad that he came to America. He thought for a moment. “In Russia, you work all day for a loaf of bread,” he replied. “In America, you work one day and you have bread for a week.”

It was a profound perspective, and this reality is perhaps our greatest asset. If you have to work all day just for food, then survival defines your life. But, if you can make enough in one day to keep two or more people alive, then your partners can do something besides work. They can link and learn.

In American social policy, we often focus narrowly on the economics—providing barely enough money to get past survival. But money alone does not change thinking.

We also focus on the systemic and financial barriers, which are very real. But such strategies alone do not explain why some people make it out of poverty and others never do.

In fact, people decide to leave poverty for one of four reasons: 1. They find it is simply too painful to stay.

2. They possess a unique talent or skill.

3. They create a future story, vision, or plan.

4. They develop a key relationship.

Once motivated, there are really only

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Initiative Quarterly • IQmag.org

two ways to get out of poverty—education and relationships. According to child psychiatrist and Yale researcher, James Comer, “No significant learning occurs without a significant relationship of mutual respect.”

Still, our current interventions in social policy mostly involve money.

More money allows a person to get past survival, but it does not change his or her way of thinking. In other words, how can we expect people to manage money when they never had a nickel and don’t know anyone who does?

How can we expect people to manage money when they never had a nickel and don’t know anyone who does?

One of the hidden benefits of social privilege is the intergenerational transfer of knowledge, which always occurs through personal relationships. It’s like a treasured heirloom that is enriched and bequeathed from one generation to the next.

Unfortunately, people in poverty are left out of the will.

“Growing up in poverty is like growing up in a foreign country,” says a friend of mine, who made it from extreme poverty to the COO of a major company in San Antonio. “No one tells you the rules of the larger society.”

That encapsulates the importance of such basic education that most of us consid-

CHRIS McALLISTER

Education, Relationships are Keys to Poverty Escape

er as “common sense.” When we work to transition adults out of poverty, we start with the premise that they are savvy problemsolvers who simply do not have the same information as others do. And so we work hard to give them that information base.

In contrast, many direct-service agencies structure operations around telling individuals in poverty exactly what to do. For change to be owned, the individual making the changes must be involved in the decisions. Otherwise, they are doomed to be represented by someone who may or may not have their best interests at heart.

Without education and relationships, transition becomes virtually impossible.

Ruby Payne is an author, publisher, educator, and business owner, and has a doctorate from Loyola University in Chicago. She is an international speaker on the issues of class and the mindsets of poverty, middle class, and wealth. Her book, A Framework for Understanding Poverty, has sold over a million copies. She makes her home in Corpus Christi, Texas.