One persistent problem in breaking the cycle of poverty has always been the challenge of low income people accumulating wealth.  FreshMinistries in Jacksonville, Florida discovered two underutilized federal programs that can help people begin to build wealth.

One program encourages people to use the earned income tax credit (EITC) which provides a refund for people with low wage jobs.  A parent with more than one child can earn up to $34,000 a year and qualify for an EITC credit up to $4300.  FreshMinistries joined numerous other Jacksonville community organizations to create free tax preparation sites where residents can apply for the credit and have their tax return prepared at no cost by trained volunteers.  At the same time, people are given information about financial literacy training and encouraged to place a part of their refund into a matched savings program.  The federal government provides a federal matching dollar for every dollar saved in an individual development account (IDA) and FreshMinistries agreed to raise an additional dollar of local funds so the participants receive a two for one match of every dollar saved.

As a result, a person who saves $2000 over two years would receive an additional $4000 toward one of three major life goals, buying a home, postsecondary education or starting a business.  FreshMinistries has enlisted more than 20 community organizations as IDA partners to increase financial literacy training and expand the use of these matched savings accounts in Jacksonville.  Each person in the program has a counselor who helps them work toward their dream.

By combining the EITC with an IDA, a person of limited means can begin saving toward a major change in their circumstances with federal and local matching funds to help.  Community groups in other cities are encouraged to establish a similar program to help break the cycle of poverty.