Ways to Work Articles

Franklin, Robert. "U.S. funds will help the poor buy cars to get to work." StarTribune.com
     20 Jan. 2005. . <www.startribune.com>.

StarTribune.com
U.S. funds will help the poor buy cars to get to work
Robert Franklin, Star Tribune
January 20, 2005

An appropriation from the $388 billion, 2,900-page spending bill passed by Congress in November should help hundreds of Twin Cities-area poor people get to work.

The $1.9 million appropriation, to be announced in the Twin Cities today, will be used by area nonprofit groups to finance low-interest car loans of up to $4,000 for families that otherwise couldn't get them.

The loans-for-cars idea has helped 26,000 families nationwide with loans totaling more than $31 million in the 20 years since it was started as a Minnesota-only program by the McKnight Foundation.

The lack of dependable transportation "is the single biggest barrier to low-income people staying or moving upward in the job market," said Jeff Faulkner, president of Ways to Work Inc., a Milwaukee nonprofit that will administer the money.

Earmarked for metro-area counties, the new money won't be available until late fall, and it is expected to be funneled through eight nonprofits. "It takes awhile for this money to work its way through the system" and for training for nonprofits making the loans, said Byron Laher, director of public policy for the Greater Twin Cities United Way, which worked with Minnesota members of Congress to get the money.

The federal appropriation must be matched by local cash or in-kind contributions, and the United Way will pay up to $900,000 in administrative costs over two years as part of that match.

The foundation, based in Minneapolis, started the Family Loan Program to help families in various emergencies, "generally helping families through difficult times," said Carol Berde, executive vice president of McKnight, which is Minnesota's largest foundation.

Over the years, she added, most of those emergencies have involved transportation.

Public transportation often doesn't work for many poor people, especially single parents juggling jobs and child care arrangements. In fact, the appropriation was made under the U.S. Transportation Department's program to help reverse commuters, those who typically need to get from homes in the core cities to jobs located in places where public transportation isn't much of a factor.

McKnight and the Alliance for Children & Families took the program nationally in 1998, and it includes 55 loan sites in 23 states.

"It has evolved a great deal, largely because Congress has become more interested in providing funds to help low-income families buy cars," said Berde, who also is chairwoman of the board of Ways to Work, a sister organization to the alliance.

The program, started with the help of nonprofit organizations, banks and local governments, overcame a reluctance by banks to make the small loans and gave borrowers helpful social service contacts, she said.

Faulkner said Congress has appropriated more than $15 million over the past six years. Most borrowers "have already emerged from public assistance, and this prevents them from cycling back into public assistance," he said.

In recent years, nearly 90 percent of the money has been repaid, so "we've gotten a pretty good bang for the buck."

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Robert Franklin is at rfranklin@startribune.com.

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CAR LOAN PROGRAM

Loan details: Up to $4,000, which may be increased, at no more than 8 percent interest, for up to two years.

When and how to apply: The new federal money won't be available until fall, and the names of agencies taking applications will be announced then.

Who will be eligible?: Families with at least one child where one parent has been working for at least three months, has the ability to repay the loan, has income of 80 percent or less of the area median and cannot get a standard loan.

More information: Greater Twin Cities United Way at http://www.unitedwaytwincities.org and Ways to Work at http://www.alliance1.org (and click on Ways to Work).

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- Source: Greater Twin Cities United Way, Ways to Work