During a volunteer stint in Ghana two years ago, Dylan Higgins got a close-up look at microlending. His job as a Kiva Fellow was to interview rural entrepreneurs who are improving their lives with the help of small loans. He heard plenty of success stories but was surprised by a recurring theme. Many borrowers told Higgins that, much as they appreciated the loans, “they were seldom introduced to savings products.”
At the same time, says Higgins, “I was looking back to the United States. Our economy was on the precipice of collapse because of an overreliance on debt. That was the lightbulb moment for me. I decided to do something to expand the conversation from lending to savings.”
Back home in Seattle, Higgins cofounded a nonprofit called SaveTogether. The organization aims to foster the savings habit among low-income Americans. Like Kiva, SaveTogether uses social media tools, an online platform, and the power of storytelling to solicit small donations from “everyday philanthropists.” Instead of funding microloans, however, donations to SaveTogether are funneled into matched savings programs through a network of nonprofit partners committed to fighting poverty.
One successful saver, Adriana, is a mother of two from San Francisco. She wanted to buy a personal computer to help her 13-year-old son with his homework. She opened a matched savings account with the Earned Assets Resources Network (EARN), began making small monthly deposits, and agreed to share her story on the SaveTogether site. Her personal savings of $500 grew to a $1,500 nest egg, thanks to matching funds from Save- Together and EARN. She updated her story to describe how the experience had turned her sons into regular savers, too.
In its first four months, despite a tough economy, Save- Together raised $10,000 from 120 donors. Higgins expects to scale rapidly as partners join the network, bringing Save- Together into more communities. “We piggyback off the work of our partners,” he explains. Partners do the legwork to screen individual savers and often provide them with financial literacy education.
Donors will respond to savers’ personal stories, Higgins predicts, “because these are people who are putting their own skin in the game. Often, they are fighting day to day to make ends meet. Through this program, we get to see their transformation. They begin to recognize, ‘I have a future, and I want to take steps to prepare for it.’ That’s what saving is all about.”
Read more stories by Suzie Boss.