UW Launches Emergency Savings Match Pilot

Emergency savings provide a critical buffer that allows families to weather financial emergencies that could otherwise be life-altering.

Far too many individuals and families are living paycheck-to-paycheck and just one emergency or unexpected life event away from financial distress.

According to the Federal Reserve, nearly 40% of American adults cannot pay an unexpected expense of $400, leading them to borrow money, sell possessions, or neglect the expense entirely.

For people already struggling or living in poverty, a flat tire or medical expense can spiral into loss of housing or employment, result in negative health impacts, and create long-term insecurity.

Even before the pandemic upended the economic and public health of our region, 23% of Philadelphians lived in poverty. For a city like Philadelphia, where poverty and deep poverty rates have not decreased in 25+ years, many families are only one rent payment or high electricity bill away from a potentially devasting financial crisis.

No one should experience the stress of a short-term financial crisis derailing their family’s stability, whether temporarily or permanently. To address this need, United Way of Greater Philadelphia and Southern New Jersey, in partnership with three place-based organizations, will support nearly 600 low-income families over the course of three years with the Emergency Savings Match Pilot Program.

Participants of the program will be given the opportunity to open a non-custodial savings account, with a savings goal of $200.00. Upon completing the goal, United Way will provide a 4:1 match. Participants save $200, and United Way deposits $800, for a total of $1,000 in savings! Throughout the process, participants will have complete autonomy over the funds saved.

Programs like this help people overcome financial emergencies without losing assets they’ve already worked for and earned. Lack of liquid assets (defined as an asset that can be easily converted into cash in a short amount of time) is more pervasive for communities of color due to structural inequities and historical disinvestment in communities. In Pennsylvania, the liquid asset poverty rate is 31.7%, and in New Jersey, it’s 26.8%. Liquid assets can ensure that families who hit a financial emergency do not lose key wealth-building vehicles, such as a home or a business, during a financial setback.

We spoke to some community members as we were designing this program, and there was much excitement.

One woman reflected on how this would have helped her recently with an emergency. “My car broke down and the repair cost me $300,” she said. I need a car to get around. A program like this would have supported me at that moment.”

“Most programs come with harsh rules and restrictions, but a program like this helps people when they are in most need of it,” said another member of the community

Over the next year, we are partnering with a third-party evaluator who will lead the evaluation of this pilot. Our learning questions include:

  • Does access to emergency savings improve financial well-being for families?
  • Will emergency savings reduce the likelihood that participants turn to high-interest lenders, including predatory loans and high-interest credit cards? 
  • Will emergency savings increase the likelihood of participants contributing to mid- and long-term savings goals, such as education, retirement, and homeownership?  

Because of your support, the pilot Emergency Savings Match Program will provide discretionary funds to individuals and families when they decide they need it most. These funds will not only help during a financial crisis but also help families progress toward their long-term goals in life.

To learn more about Financial Empowerment at United Way, click here.

To make a gift that creates scalable solutions to address our region’s poverty crisis, go here.