Breakout Round 1:
Scale, Impact, Efficiency & Sustainability

CONTEXT
Assume that we as an industry want to reach more people (have more people receive the tax credit) and provide more services (have more people who receive the tax credit receive additional services moving them towards asset building).

This activity is gives you an opportunity to articulate a vision of how to increase impact, and achieve scale, efficiency and sustainability.

PROCESS
You have 20 minutes for this activity. As a trio, using the markers provided and working on a flip chart page (20x30 sheet of paper), please prepare a stand alone description in words and pictures of your vision for the EITC movement/industry.

Use the following to stimulate your thinking:
What are the 3 to 5 key actions the EITC industry needs to take to:
o achieve scale,
o increase impact,
o improve efficiency
o and become sustainable?

Use words and images to articulate these actions.

Assignment 1b

CONTEXT
This activity is designed to synthesize the work accomplished by two trios in the previous round into a single list of actions.

PROCESS
You have about 50 minutes for this activity (including lunch). We'll invite each small team to get some food and come back to your breakout area and continue working.

As a small team, using the markers and white walls provided in your break out area, please prepare a description, or 'model' that can be shared with the other teams. Your model should articulate your team's synthesis for what the EITC Industry should do to increase impact, and achieve scale, efficiency and sustainability.

Use the the same question to drive your synthesis:
What are the 3 to 5 key actions the EITC industry needs to take to
o achieve scale,
o increase impact,
o improve efficiency
o and become sustainable?

In addition, as a group, define what we mean by the following terms: scale, impact, efficiency and sustainability.

Use words and images to develop your model.

Assignment 1c

Building upon the work you have just completed, please answer the question: What is the overarching problem that we are working to solve as a coalition? You have about 10 minutes for this activity.

Add your definition to your white walls and be prepared to make a presentation of your definition and your synthesis of actions to the entire group.

Use words and images to develop your definition.

How do you know when you win? We will have a sustainable national effort to provide affordable access to tax preparation and financial services for low income families. There are public and private ways to get to our goal. In the public-sector approach, building on existing infrastructure at a national level, we hope that our efforts will filter down to the state level. We will identify existing infrastructure in each state - universities, community colleges, employers, utilities, industry sectors, etc.

We explored the idea of developing an income-generating model very different than what exists today.

We developed a picture because we felt inadequate compared to the other teams' work. Our customer is in the middle, and they are surrounded by the services that they will receive. These benefits will emerge from a partnership of public, private, government, universities and employers.

We looked at a model of resource sharing. We looked at challenges of sustainability. We need to define our roles. We need to drive down our costs. What are the points of impact? We want to help low and moderate-income people to participate in the economy more through financial services, credit and capital, EITC, etc. We are all working on some of these things. Our goal is to help people get more money in their pockets and keep it there.

If we look at any particular segment, how can we achieve the biggest impact with limited resources? We need to define our priorities in order to maximize our impact.

We will start with our diagram. We put all of the players on the board, and then talked about how they interact. There is a central organization (maybe the NCTC?) that plays a coordinating role. Around this organization are local programs, local partners, paid preparers, Federal Government (IRS) and Financial institutions and national partners. The Central "It" would manage standardized, modular curriculum, procedures and marketing. After we discussed all of the relationships, we discovered that we were only talking about the tax preparation side of things.

What is "It"? We tend to think that taxes and asset-building are interchangeable, but they are actually very distinct things. If we separate asset-building and taxes, then we would need two different models like ours and see how they overlapped. We are pretty far along developing the Central It for taxes, but we are out of our depth when we focus on asset-building. We need to keep these two things distinct.

We had nothing to say, but we have very nice pictures. We believe that "going to scale" means standardization. We need to standardize operational things like IT, staff management, quality control, data, etc.

We need to focus more on our consumers. We need to listen to what our customers want. Our industry is growing through the roof. If we want to standardize, then we should focus on our core competency of tax preparation. We don't want to turn people away when our lines are too long. Let's provide more timely tax preparation for more people. Once we do a better job on tax prep, then we can open the door to asset-building.

We struggled with all of these questions. We developed three different interpretations of our core challenge. First, people eligible for EITC are not applying for and receiving it. Second, we are trying to alleviate poverty. Third, we provide effective asset-building strategies and tools for low-income people. We're kind of doing all of these things.

We need some kind of infrastructure in order to pursue these goals. Perhaps we should develop a customized software package for this population. Someone else said that we should just use Taxwise because it is the industry standard. We need to standardize and we need a facilitator to help create a national model for effectiveness. We need a national brand. We need both national and local advocacy. We need to be engaged in fair tax policy.

What does scale mean? Everyone eligible for EITC gets it for low cost or for free, and that they have access to asset-building opportunities. We talked about creating a social enterprise for tax preparation. There may be franchise opportunities for local communities. We may be able to achieve some economies of scale, but better service will actually be more expensive. We may spin out new products (like the prepaid debit cards) and we will create a market for these products. We will change the landscape for the rest of the commercial industry by becoming a national presence.

The biggest problem is poverty. People spend everything they earn and have nothing left. One of our challenges is that the people who tend to be drawn to nonprofit work tend not to have the skills for building a social enterprise.

People have developed a model for this -- the check-cashing model. They serve their market. Their only problem is that they charge too much.

We believe that we must start with market research and build from there. We need to coordinate our research so that we are all operating from the same page. We should bundle services when it makes sense for customers, but we don't know enough about what our clients want to know what's appropriate. We should structure our market research to challenge our assumptions and beliefs. Market research will guide our investment strategies.

We should invest in technology. We need to better understand the costs and return on investment for partners, customers and funders. We need new financial products that encourage savings and are simple to understand. These products should be available to anyone and should incorporate incentives. We want to engage more financial institutions as full partners from the very beginning. Borrow infrastructure when it's appropriate, but we need to better understand when it's appropriate. There is not adequate funding

Our overall goal is to increase the economic stability of low and moderate-income families by connecting them to the resources to achieve their goals and increasing their income and assets.

We struggled mightily. We talked through a lot of different tangents. We struggled with the definition of scale -- is it the number of returns, the percentage of returns, or the number of EITC returns? Should we be measuring impact? Are there enough "viable" (reliable, affordable) commercial preparers?

We need to listen better to our customers. Some focus groups have indicated that while we are dissatisfied with most commercial providers, the customers generally are not. They might not want bundled services.

What is quality? We want all of our preparers to come up with the same answers. Is 100% really our goal?

We have to start with market research.