CHAMPION Network Financial Literacy Incentivized Savings Program

CHAMPION Network provides practical and meaningful pathways for impoverished young people to enter the workforce and retain employment.

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Eligibility

  • I am not an employee of BNY Mellon, or an immediate family member of a BNY Mellon employee
  • I am over 18 years of age
  • My organization is incorporated as a non-profit, for-profit, or hybrid organization, or I have a partner that is incorporated and could accept funds on my behalf
  • I have already piloted my initiative and have some initial evidence of impact
  • My organization is headquartered and creating impact in the United States

Gender

  • Not specified

Where are you making a difference?

New York: Brooklyn (11207)
Our services are provided at our Employment Solutions office located at 2930 Fulton Street, Brooklyn, NY 11207.

Focus Areas (required)

  • Development & Prosperity

Date Started

01/05/2015

Organization Type

  • nonprofit/NGO/citizen sector

Project Stage: Select the description below that best applies to your approach.

  • Established (successfully passed early phases, have a plan for the future)

Budget

  • $250k - $500k

Website or social media URL(s) (optional)

http://www.cypresshills.org

Twitter URL

http://twitter.com/chldc

Facebook URL

http://www.facebook.com/CHLDC/

1.Founding Story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed.

In the spring of 2014, Lowell Herschberger of CHLDC received a phone call from Todd Farber, Director of Operations at Maggie’s Paratransit. Todd needed 50 new drivers due to a systemic problem; 3 out of 4 new drivers at Maggie’s ended up leaving before the 3-month mark. Nearly every other paratransit company in the area had a similar vacancy gap of 30-70 drivers and high turnover was a consistent challenge. Lowell’s first “Aha” moment came when he learned that Paratransit companies generally hire people with both Class C and Class B CDL’s though only a Class C is needed. New drivers were taking a paratransit job until they were able to access a much better paying job using their Class B. The drivers needed a tiered career pathway.

2. The Problem: What problem are you helping to solve?

Drivers were not aligned with the needs of the employers, resulting in an inefficient employment cycle for both. Training for a Class B license is costly, and low-income folks need support to reach the next level. Our tiered career pathway gets them a job with a Class C license and a Class B after a year of driving experience--with support all along the way. Participants would see a raise of 20%, with a trajectory to annual incomes of $60,000.

3. Your Solution: How are you planning to solve this problem? Share your specific approach.

Members of our program attend monthly social events and workshops after they earn a Class C license and begin working. At these events, they will meet with their peers, who are also paratransit drivers, and a financial counselor who will explain long-term benefits of getting a Class B license and the steps needed to reach that next level in their career. At this point, members will be invited to opt into the Class B savings plan. Our financial partner, TD Bank, has agreed to open fee-free accounts for our students and to even incentivize their usage of the accounts by adding an initial $25 to each one. The financial literacy counselor will then work with them to set up a budget and savings plan. When they have saved up to $900, we will match their savings with the final $300 needed. The total account value of $1,200 will be enough to pay for the lessons and fees to earn a Class B license. This fee is substantially lower than the $2,000 to $4,000 they would otherwise pay because we are able to negotiate a lower rate based on the volume of students we will be sending. We will also negotiate training hours that match the schedules of our students.

4. Example: Please walk us through a specific example of how your solution is working to solve the problem.

Through our training, Stephon Issacs attained his CDL Class C license and was hired as a driver by a local Access-A-Ride company, earning $15 per hour. This was a life-changing opportunity, but his dream was to drive a large bus--requiring training we do not provide.

Stephon found a bus company in NJ whose 3-week driver training program was unpaid and required the trainee to pay for their DMV road testing and licensure fees. It also required the applicant to sign an employment agreement to remain employed with the company for 6 months. We were able to offer him career guidance and classroom training during this period. He was able to become a driver for a 45-foot Coach Bus with a Class B license and Air Brake endorsement. With the assistance of CHAMPION, he later found better employment closer to home. Today, he drives for a charter bus company and makes $52K year with full benefits.

5a. Too many people in the U.S. have unmet needs for financial products and services. How is your work reaching a population(s) that is currently underserved? If it is not reaching an underserved population yet, how might it in the near future?

A majority of our community members are either immigrants or first generation Americans. Many speak a language other than English at home. Less than 20% hold Bachelor’s degrees. Many are vulnerable to predatory practices, non-traditional banking, and check cashing services with large fees. Our organization has advocated for better lending options and expanded financial services in our community. Despite progress, many people, particularly young people and new arrivals, are vulnerable.

5b. Please specify if the population you are reaching is underserved due to any of the following characteristics:

  • geography
  • work status
  • language
  • race/ethnicity
  • age - youth
  • socio-economic class

6. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?

In our survey of non-profit and proprietary driving schools, we have not found any others who are implementing Class C CDL training specifically for the paratransit sub-sector. Others are running Class B training for a general population but not for this specific population.

There certainly are other savings programs and financial literacy initiatives, but our effort is unique in the way that it ties the financial counseling with an immediate, high-yield, vocational goal and creates a tiered career pathway.

7. Impact: How has your project made a difference so far?

CHAMPION Network has supported 196 individuals into paratransit jobs. Their new median hourly earnings are $14.75hr. and most positions include health benefits and FT hours with overtime. They retained those jobs at a rate of 81% per year, exceeding the industry target of 65%. Of those 196 individuals placed, 35 went on to advance in their career with an average wage increase of $3.02hr.

Devon Gardner, unemployed with three young children to care for, began working for an Access-A-Ride company after completing our program. He was mentored by Jerome Paul, a CHAMPION Network alumni and dispatcher at the company. We helped Devon obtained a Class B CDL-- an upgrade on his original CDL. His family living situation improved dramatically and Devon often stops in to speak with trainees in CDL classes to offer encouragement and support.

8a. Spread Strategies: Moving forward, what are the main strategies for scaling your impact?

There are many paratransit companies who have need for Class B drivers in their school-bus or charter divisions. Such companies may eventually be willing to incorporate a savings plan similar to what we are proposing as part of their employee benefits package. Employees could take a payroll deduction that would go directly into a special bank account. The employer would match the savings at some level in exchange for a commitment to stay with the company for a given length of time. We think this would be a cost-effective retention strategy that would retain ambitious employees.

8b. If applicable, which of the following scaling strategies have you launched?

  • Trainings, Consultation

9. Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

In 2017, we began receiving payments from some of our key employers for the services. This is key to our sustainability plan as employers continue to see the long-term benefit to their business. With participants contributing the larger share of the savings, the model is particularly cost-effective. It is conceivable that fees taken from the employers could fund the entire program.

10. Team: What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.), and how do you plan to evolve the team’s composition as the project grows?

The program director, Martin Newell, has decades of experience in the transportation sector. The other key leadership staff member, Lowell Herschberger, has decades of experience in youth and workforce development and a professional background in Social Work. This leadership team is a critical mix of sectoral and programming knowledge. There are also line staff with youth development and Social Work skills, and one alumna from the program who serves as an Outreach Aide to engage her peers.

Help Us Support Diversity! Part 2 - Do you identify as part of any of the following underrepresented communities? (optional)

  • Low-income community

How did you hear about this challenge?

  • Recommended by others
  • Email

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Photo of Sarah Dewees

I love this project! It is very specific, has immediate positive financial impact on people's lives, and recognizes an opportunity in the employment market and responds to it. Their effort is innovative and unique in that it "ties financial counseling with an immediate vocational goal and creates a tiered career pathway." This is a very promising model, and they already have outcome data. The only thing I would like to learn more about is their financial education and financial coaching approach and how this can be used to empower the clients.

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