Long-term success for low-income entrepreneurs: An independent evaluation of the Washington Community Alliance for Self Help (C.A.S.H.) Individual Development Account (IDA) program

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Long-term success for low-income entrepreneurs: An independent evaluation of the Washington Community Alliance for Self Help (C.A.S.H.) Individual Development Account (IDA) program

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Title: Long-term success for low-income entrepreneurs: An independent evaluation of the Washington Community Alliance for Self Help (C.A.S.H.) Individual Development Account (IDA) program
Author: Anderson, Maia
Abstract: The Individual Development Account (IDA) program at Washington Community Alliance for Self Help (C.A.S.H.) encourages low-income entrepreneurship through microenterprise development in King County, Washington. Like many other microenterprise development organizations in the nation, Washington C.A.S.H. is concerned with issues of poverty. The organization has over ten years of experience providing low-income entrepreneurs with assistance through IDAs but has newly taken a more active role and in 2011 began administering its own IDA program. Given the high cost of administration, the range of potential alternative interventions and the variety of IDA programs being delivered across the nation, an evaluation that assesses the organizations’ past performance in the form of a longitudinal, quasi-experimental research design was sought to inform future program activities. The evaluation found that the IDA program was successful at assisting clients in asset-building through microenterprise. Based on economic outcomes, the IDA graduates stood out in a number of ways. Of the Washington C.A.S.H. clients who wanted to start a small business, former IDA participants were 55.7% more likely than nonparticipants to start a small business after completing the program. For clients who wanted to expand their small business, although IDA graduates were only slightly more likely to have achieved that goal they were 21.2% more likely to still be in business at the time of the evaluation. In addition 80% of the total IDA entrepreneurs were still in business at the time of the evaluation compared to 33.3% of non-IDA entrepreneurs. Interestingly, self-reported “ability to pay” levels were extremely similar among both groups yet questions designed to assess the general psychological impact of these conditions were starkly in contrast; 60% of the IDA group reported feeling “Somewhat Satisfied” with their current financial situation while only 23% of the nonparticipants did, and conversely 50% of nonparticipants reported feeling “Somewhat Dissatisfied” with their current economic situation while only 20% of the IDA graduates did. In addition, many IDA program graduates reported the program as being “the best thing they could have done for their business”. However both groups were found to have real business ownership challenges including the difficulty of paying for healthcare needs as well as the challenge of managing growth in their business. The program has only reached approximately fewer than 200 participants in its entire history and has some limitations for increasing scale and impact. Recommendations and considerations to the organization include clarifying the mission behind the IDA program, ways to leverage the impact of the IDA program and suggestions to institutionalize asset-building and microenterprise development that will help provide a steady stream of funding for the future.
URI: http://hdl.handle.net/1773/16632

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