An elderly gentleman gripped my hand, struggling to speak. He spoke almost no English, and I don't speak Spanish, but he wanted to thank me. I had just changed his life and he could not tell me how grateful he was. Tears formed in both our eyes as we both smiled and shook hands. The gentleman left with over $9,000 coming into his bank account, and I turned to my next client.
I want to tell you about an organization that I'm proud to be part of that is bringing real money into the city where I live - Chicago. Not that Chicago is unique in this matter; this is something we can all do. But this organization embodies the best of grassroots organizing to make people's lives better.
Follow me below the fold to learn more.
The group is called Ladder Up, and their primary purpose is to promote financial literacy among the working poor. Since its founding in 1984, Ladder Up has returned $247 million to 124,000 families in Chicago. Drawing from the introduction on their website (http://www.goladderup.org), Ladder Up helps people with tax preparation, financial aid form preparation, or enhancing the financial literacy of the working poor by connecting them with banks who help them set up free checking accounts.
Last year I helped a teacher obtain a refund of over $7,000. That was money she needed to live on during the summer when she doesn't get paid.
Every week from January through April, hundreds of volunteers fan out across the city and suburbs, preparing tax returns for free. A grant from the city and a generous donation from Intuit has allowed us to prepare the returns on a computer, significantly increasing the accuracy of the return and decreasing the amount of time to help each client, which allows us to serve more clients every day. Through the IRS VITA (Volunteer Income Tax Assistance) program, the returns we prepare are e-filed for free, and for everyone who has a bank account, the refunds are directly deposited for free.
A few years ago I helped a grandmother obtain over $2,000 in federal tax refunds. She was also receiving about $200 in state tax refunds. While I was completing her final paperwork, I asked her if she had plans for the money. She was using most of it to pay bills, but she was going to use part of the $200 to buy a pair of basketball shoes for her grandson.
Representatives from several area banks work with us, offering free checking accounts for our clients. Regardless of what many might think of Big Brother Bank, I can't help but be grateful that the banks that work with us are serving their community by offering an opportunity to build financial stability for the people who need it the most. Currency exchanges, the only option for many of our clients, charge as much as 10% of the face value of the checks cashed. Free checking accounts open up the possibility of direct deposit for paychecks, Social Security checks, welfare payments, other forms of financial aid as well as electronic bill-paying.
Two years ago I assisted a young man who had a wife and young child and was recently laid off from his job as a tool maker. He got over $5,600 in federal refunds. He took the news calmly, and I gently teased him that if I was getting that much of a refund, I would be jumping up and down. He responded shyly that inside he was jumping up and down, but he was going to wait until he got to his car to celebrate.
The State of Illinois gives out over $400 million in scholarship aid each year, but in order to apply for the aid, the students and their families must prepare long, complicated financial aid forms. The forms become even more complicated for families who do not speak English as their primary language. Ladder Up's volunteers, many who speak Spanish, are trained in the preparation of the financial aid applications, and help families fulfill the dream of college.
Ladder Up held a fundraiser last fall, and one of the featured speakers was a pre-med student at Northwestern. He was a first-generation US citizen and the first from his family to attend college. His parents never dreamed one of their children would go to college, since they were poor and the public school in their neighborhood wasn't very good. The young man worked with a Ladder Up volunteer to prepare the financial aid forms and he received a full scholarship and hopes to become a doctor. His parents beamed with pride while he told his story.
Free tax assistance is available in every city, especially cities with a business school at the local college or university. You don't have to be an accountant or a student to participate. Most of the programs accept all volunteers and most of the returns we prepare are straightforward, with tools to help you figure out the various credits and refunds available to our clients. It's hard to describe the joy of helping people so directly just by investing a little bit of time.
There are hundreds of VITA sites in the US and they all need volunteers. It's a great way to help your community and meet some wonderful people.
UPDATE: I forgot to include how we are able to bring so much money back to the community. Ladder Up's biggest program is the Tax Assistance Program, where volunteers prepare tax returns. There are many programs available to people who qualify, but the rules can be complicated. Most of our clients qualify for the Making Work Pay credit and the Earned Income Credit, and those with children are able to qualify for child care credits. Nearly all of these credits are refundable, which means that the credit gives money back in excess of the taxes paid.
The rules can be complicated, but using computers helps enormously. All we have to learn is what to look for and enter it properly - the computers do all the calculations and applies any limitations.