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Financial Education is Fundamental!

A Personal Investment in North Charleston

by Elizabeth Duffrin

One spring morning in 2005, Dorothea Bernique, an accredited financial counselor in South Carolina, was seated across her desk from a well-dressed, middle-aged client, an African American woman who had just come into a sum of money. As Bernique gently questioned the client about her plans for the money, the woman suddenly leaned in and whispered, “Miss Dorothea, what is investing?” Bernique had long been troubled by the lack of financial knowledge among the working poor in the North Charleston area. But the vulnerability in that simple question overwhelmed her. “Someone could have really taken advantage of her,” Bernique says. “I thought, ‘This is it. I need to go all out and do what is in my heart.'”

Increasing HOPE

Within three months, she quit her well-paying job at an insurance company and launched a nonprofit offering free financial workshops to low-income residents. Ten years later, her nonprofit, Increasing HOPE (Helping Others Prosper Economically), offers a “one-stop shop” for financial services to low-income residents in three South Carolina counties. With the firm belief that quality financial education could improve lives, Bernique located her office in North Charleston, the area of greatest need. The City of North Charleston had always been primarily a working class community. When the 1,500 acre Naval Base and Shipyard closed in 1996 taking with it more than 22,000 jobs, the city fell on hard times. Today, almost a quarter of the 100,000 residents live in poverty. An elevated highway divides North Charleston from the more affluent City of Charleston.

For years on her own time, Bernique had offered free financial coaching to low-income workers through a national ministry. She knew the need for financial education was there, but in 2005, the money to support it was not. Bernique appealed to banks and foundations but could not get their attention. “I was told that financial education wasn’t a poverty issue and didn’t relate to it,” she recalls. To get started, she used the FDIC’s online Money Smart curriculum and borrowed space for workshops from nonprofits and churches. She launched a local radio show on personal finances, passed out flyers at community events and networked. “It was a lot of word-of-mouth,” she says, “a whole lot of pounding the pavement.” Within a year, Bernique settled into her own office, hired staff and expanded her financial curriculum. Her workshops drew maids, janitors, hotel clerks, cashiers and waiters as well as higher-income earners who bounced checks. She trained women moving out of transitional housing through the YWCA and new homeowners through Habitat for Humanity.

Changing people’s relationship with money

Attendees expressed “almost overwhelming appreciation for the information,” she found. In follow-up phone calls, nearly all agreed they had learned how to budget. But sticking to those budgets proved a bigger challenge — less than 30% reported doing so. It was only after reading a book by a couple of financial psychologists that she hit on a solution. Now, she helps clients uncover their beliefs about money and reflect on the experiences that shaped those ideas and led to financial trouble. Bernique recalls one woman in her early 20s who realized that her family was in debt because she expected her husband to provide for all her wants, just like her older siblings had when she was a child. A middle-aged man realized that because his own mother could “stretch a dollar until it screamed,” he was unreasonably expecting his own wife to take charge of the family’s money management when he was better suited to the job. Without such insights, “it didn’t matter what we taught them about a budget,” she insists. “We had to change the mindset before we could change the behavior.” The new approach doubled the success rate. More than half of clients reported sticking to their budgets. Budgeting workshops were only one piece of what Bernique envisioned in her one-stop-shop for financial information.

Countering predatory lending

Realizing that many were being swindled by commercial tax preparation centers offering “rapid tax refunds” that were actually loans with exorbitant interest rates, Bernique added free tax preparation. Since 2009, Increasing HOPE has helped 1,000 residents recoup a total of $3.4 million in overpaid taxes, including some from Earned Income Tax Credits. Clients often use refunds to pay off debt, fix a car, or put a down payment on a home. “That’s money that is reinvested in the community. It stimulates the local economy,” Bernique notes. Guidance for aspiring homeowners is another popular service. Recently, Bernique sat down with a steadily employed single mother whose credit score was 80 points too low to qualify for a mortgage. Together, they created an action plan that included attending the budgeting workshops, opening a secured credit card account, and taking out a small bank loan that she would quickly pay back. The plan worked. The young woman completed Increasing HOPE’s online home buying course, then set off wielding their list of preferred lenders and realtors. Today she’s the proud owner of a townhome. Having many financial services in one location is an advantage, Bernique observes. Just the other day an anxious single mother walked into Increasing HOPE with a lost job, a health problem and children to feed. She walked out, Bernique reports, with a completed mortgage assistance application, approval for $300 worth of food stamps, a game plan for her job search — and a lighter step. “Sometimes the things clients face are so overwhelming it paralyzes them,” she says. “It helps to have that place you can go where you’re not being judged and there are resources.”

Preventing foreclosures and stabilizing neighborhoods

That goes for residents struggling to keep their homes as well. To date, Increasing HOPE has guided 219 homeowners through the paperwork needed to qualify for a total of $3.5 million and avoid foreclosure through the states Hardest Hit mortgage assistance program. Keeping houses out of foreclosure helps stabilize whole neighborhoods, she notes. “Otherwise, when banks are not able to resell foreclosed properties, it causes other home values to decrease which then leads to boarded up homes and blighted neighborhoods.” In the wake of the foreclosure crisis, funders finally were interested in addressing the connection between financial literacy and the downward spiral of low-income neighborhoods. Increasing HOPE was able to offer services to more clients.

Bernique sees her organization continuing to mature and grow, making even more impactful neighborhood change by supporting a small business incubator, training business owners for success, and providing opportunity to ex-offenders and others who don’t fit the traditional workforce. And after completing their state CDC certification last year, Increasing Hope started receiving private tax credit investments. The future for Increasing HOPE is bright, as is Bernique’s outlook on the future of her community. And she plans to be there every step of the way. Asked what she told the woman a decade ago who wondered “What is investing?” Bernique recalled, “I explained investing is to make a deposit with the expectation that it will grow over a long period of time.” Bernique’s commitment to the financial well-being of the North Charleston community is her own investment, and if the last ten years are any indicator, it’s one that will grow and pay dividends for years to come.