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TMCNet:  Nonprofit EARN is First to Pit Technology Against the Opportunity Problem Facing 132 Million Americans

[December 02, 2013]

Nonprofit EARN is First to Pit Technology Against the Opportunity Problem Facing 132 Million Americans

SAN FRANCISCO --(Business Wire)--

In 2 days EARN, a national nonprofit and one of the two largest providers of matched savings accounts in the U.S., will launch the Firefly Account. It marks the first time technology is used to bring goal-based, nonprofit saving to scale, potentially reaching millions of low-wage American workers.

The Firefly Account parts from conventional savings products through its online portal and online delivery of financial rewards, incentives, and support to low-wage workers who are first-time savers. Firefly is designed specifically for low-wage families to build long-term saving habits, it is free, and it's the only product of its kind offered without a profit motive.

In using technology to help these families save, EARN innovates further-it challenges a commonly held view that low-income workers cannot be reached online; however, research supports Firefly's approach:

  • Two thirds of households earning under $30,000 per year are online-this jumps to 86% of households earning between $30,000 and $49,000

"EARN's Firefly Account emulates the est of Silicon Valley start-ups by strategically using technology to solve seemingly intractable problems," said EARN CEO Ben Mangan. "In this case, EARN has learned from our first decade how to take our proven approach to build savings, and to do it for millions instead of thousands."

Low-income American workers who save have the greatest chance of rising from poverty, but very few have savings. Firefly's online portal will bring EARN's proven solutions to scale.

  • There are 132 million Americans in or on the edge of poverty
  • Saving is among the leading indicators of poor Americans leaving the bottom 20% of our economy (Pew (News - Alert) Charitable Trust)

To the 70 million Americans who work 2-3 jobs and are still stuck, or the 44% who have no savings to withstand the smallest emergency (such as a broken-down car or medical emergency),Firefly clearly fulfills an unmet need.

The Firefly Account will build saving habits that lead families to a lifetime of saving, and ultimately, to long-term prosperity. EARN's 11 years of helping low-income families prove a saving habit that starts with money for an emergency, grows to savings accounts, and saving that leads to home ownership, education and small enterprise.

EARN's online savings products have already helped thousands of low-wage workers build lifelong saving habits and financial capability. Since 2002, over 5,200 people making less than $12,000 per year have saved $6.2 million of their own money.

Much of Firefly's account functionality is through a partnership with Dwolla, a payment network innovator with offices just recently expanded to San Francisco.

As CEO Ben Mangan committed on the Clinton Global Initiative's stage this summer, EARN will help 1 million low-wage workers save $1 billion by 2022.

About EARN

EARN is a national nonprofit that gives low-income working families the power to create prosperity for generations. As the nation's leading microsavings provider, EARN gives families the tools to achieve life-changing goals such as saving for college, buying a first home, or starting a small business. EARN's ultimate vision is that millions of well-informed, low-wage American families will achieve financial success through proven strategies, fair public policy, and their own hard work.

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