Assets & Opportunity Profile of New Orleans, the first study of its kind for our region, goes beyond the usual measure of poverty—household income—to include a snapshot of household assets. This report paints a much more thorough picture of financial health and poverty in New Orleans than we have seen previously.
“Income is necessary, but alone it is insufficient for long-term stability and mobility,” said Kasey Weidrich, senior program manager at the Corporation for Enterprise Development (CFED), which conducted the study in partnership with the Greater New Orleans Community Data Center (GNOCDC). The study was funded by the Ford Foundation and the Greater New Orleans Foundation.
“Assets create a financial buffer which allows families to weather emergencies,” said Weidrich.
Asset poverty is a new measure which is defined as not having the financial means to support a household for three months at the federal poverty level[1] if the primary source of income were to be lost. The report finds that 37% of all New Orleans residents live in asset poverty, a rate significantly higher than the national average of 27%. Asset poverty is even more widespread than poverty, which affects New Orleans residents at a rate of 23%, or 1.5 times the national average of 15%.
Asset poverty affects New Orleanians of all income levels, races, and levels of education, although low-income families, families of color, and those with less education are more likely to be asset poor. Asset poverty affects 50% of black households, 40% of Latino households, 24% of Asian households, and 22% of white households in New Orleans. The study also found that 71% of New Orleans residents have subprime credit scores.
On the positive side, entrepreneurship has spiked in New Orleans post-Katrina. Currently 22% of residents own microenterprises—higher than the national average of 17%.
“We intend for this report to be a call to action,” said Albert Ruesga, president & CEO of the Greater New Orleans Foundation. “As a community we have to work together with a coordinated, multi-sector approach to help lift New Orleanians out of poverty.”
The report outlines many strategies that can be used by the public, private, and nonprofit sectors to build assets in New Orleans communities. For example:
Nonprofit organizations can use the information in this study to design new programs and expand on existing programs to improve financial literacy and help families build assets. They can use the data to advocate on behalf of low-income families in our region. They can also use the data in completing applications for funding from national foundations and city, state, and federal agencies.
The banking community can use the data to create and promote products that will help families build wealth. They can also educate low-income individuals on the range of financial products and services available to them and help them avoid high-cost and predatory lending and insurance practices.
The public sector can use this data to incorporate financial education into existing social service and workforce programs. Local government can use licensing and zoning powers, enforcement of local disclosure laws, and litigation to curb predatory consumer lending practices and to limit the proliferation of predatory lenders in low-income neighborhoods. Public agencies can also implement foreclosure prevention strategies, including foreclosure counseling, forgivable emergency loans, encouraging lender workouts, and assistance to tenants in foreclosed properties.
Foundations can use this data to attract new resources to our region. The Greater New Orleans Foundation will use the data to inform our own grantmaking, particularly to design our new economic opportunity initiative, the successor to our highly successful housing program. The Foundation plans to host several meetings over the next few months with leaders from various sectors across the community to discuss how a coordinated and integrated strategy can be achieved to address asset poverty in our city and region.
To download the Assets & Opportunity Profile, click here.
[1] The amount required to support a family of three for three months at the federal poverty level is $4,632.
This article was written by Rebecca Connor.