[Watch] Navigating Benefits Cliffs – Barriers and Solutions

Benefits cliffs create economic challenges for workers and employers alike. A benefits cliff may occur when an increase in income—from working more hours, getting a raise, or taking a new position—pushes a worker above the income eligibility limit for one or more public assistance programs, and the loss of assistance is greater than the value of the increase. This forces people to choose between their family’s immediate financial best interest and their own longer-term wage growth and career advancement. These cliffs can also stymie employers seeking to hire workers and develop their skills through internal career pathway opportunities.

On October 12, 2023, we hosted a Connecting Communities webinar with experts exploring this economic challenge from the perspective of employers, the Federal Reserve, and community leaders who help families navigate public assistance programs and plan for career advancement opportunities. In this session, we learned about tools developed by the Atlanta Fed that can identify and inform mitigation strategies. We also heard about innovation pilots including Florida, North Carolina, Tennessee, and Washington D.C. that may inform the future efforts of state and community leaders working to develop solutions to the benefits cliff.

Speakers

TRANSCRIPT

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Gabriella Chiarenza

Good afternoon, and welcome everyone. I’m Gabriella Chiarenza. I’m a writer with Fed Communities. Thank you for joining us for this Connecting Communities webinar on Navigating the Benefits Cliff. We have a really wonderful group here with us for today’s discussion.

First, we’ll hear from Alexander Ruder, Director and Principal Advisor at the Federal Reserve Bank of Atlanta. Alex will share some information about benefits cliffs and the Atlanta Fed’s work on this issue. Next, I’ll speak with Kwain Bryant. Kwain is Manager of Navigation at Goodwill Industries of the Southern Piedmont. Kwain will shed some light on how benefits cliffs can impact employers and career development. Then we’ll turn it over to Brittany Birken, Director and Principal Advisor at the Atlanta Fed.

She’ll speak with three folks from different parts of the country working on innovative solutions around the benefits cliff. Brittany’s panel features Geoff King, Program Manager for the Career Mobility Action Plan, DC Department of Human Services, Marielle Lovecchio, Director of the Tennessee Alliance for Economic Mobility, and Michelle Watson, CEO of the Florida Alliance of Children’s Council and Trusts. Before we dive into today’s event, just a few housekeeping items. Today’s session is being recorded and will be later available for viewing.

Views expressed during this session are those of the speakers and are intended for informational purposes only. They do not necessarily represent the views of the Federal Reserve System or Fed Communities.

Your microphones have been muted. Please use the Q&A feature throughout the session to submit questions. We have a really robust session for you today, so we’ll do our best to address some questions during the session in the chat and to follow up with responses to others afterward.

Finally, we want to share with you our benefits cliff series, on Fed Communities. This series includes articles and multimedia stories exploring what it’s like to go through a benefits cliff and what folks around the country are doing to help address the issue. Check out this series by going to our website fedcommunities.org and looking under the Stories tab at the top of our homepage for benefits cliff stories.

Explore our full range of articles, resources, and data at fedcommunities.org. And please keep today’s conversation going and engage with us on social media, using the hashtag #connectingcommunities. And now, I would like to turn it over to Alexander Ruder of the Atlanta Fed. Alex?

Alexander Ruder

Great. Good afternoon everyone. It’s an honor to be here today and talk about the benefits cliffs and in the context of barriers and solutions. I’d like to start out by just having a refresh on what we mean by “benefits cliffs,” for experts in the audience and folks who this may be a new topic for. By “the benefits cliffs,” we mean a general term, by which workers, low and moderate income workers, who are on public assistance, childcare, housing, food, healthcare, as they begin to earn more money, either through job training, a raise, as they begin to earn more money, they’re going to gradually lose that means tested public assistance.

Now, that can result in a few things. Number one, the worker can actually be financially worse off after an income gain, due to benefits loss. That’s what we technically call the benefits cliff. You’re worse off. Visually, you’re over a cliff financially, but it’s a more general problem there. You may be no better off. So I give you a dollar of income, you lose a dollar in public assistance. We call that a benefits plateau, stagnation. Or you just may not be as financially well off as you thought you would be.

What are the consequences of this general term, “benefits cliff?” Number one, it can disincentivize career advancement, if the financial returns to moving up the career ladder, moving into a new job are not there. Number two, it can destabilize finances. So let’s say you actually do move up in a career. That sudden loss in public assistance, if not properly prepared for, could destabilize your finances. Number three, it creates a sense of risk. What if that job you’re moving into is not a quality job, that you’re going to have a strong lasting tenure in, with upward mobility potential? If you lose that job and end back up on public assistance, can you get back on the programs you need in time to support your family? All three of those dimensions are at play when we think about the benefits cliff. Now, there’s a rich history and community of researchers, practitioners, who have worked on the benefits cliff for many years.

I will want to briefly say that, from the Atlanta Feds perspective, original entry into this work came through our labor economics research. This is an active field of research, using a term what’s called labor supply. Try and understand workers’ decisions to enter the labor force or to work more hours. But I would argue, our contribution to this, again, rich history of work is that we’re thinking about it very specifically in a workforce development context, in two ways. Workforce development is typically not just focused on, “Am I going to work more hours? Am I going to enter the labor force?” Much more often, we’re thinking about getting job training, having a multi-year educational plan, career pathways. How does this benefits cliff phenomenon affect the returns or what we expect workers to get from moving up those career pathways? That’s number one. Number two is a broader conversation about how we measure outcomes in workforce development in associated fields.

What I mean by that is that we often look at, “Does the worker now earn more after, say, a job training program? Did they get a job in the industry we were targeting?” Very important measures, but due to benefits loss, we might want to look a little more holistically at the workers’ wellbeing as an alternative measure, complimentary measure even. And I’ll come back to that at the end of my remarks. All that being said gets us to what’s on your screen right now. Career advancement is often, particularly for low and moderate income workers, not happening in isolation. It’s often one element in a larger framework that workers are working in to achieve their financial goals. And on your screen right now, you have elements of financial empowerment, from the Consumer Financial Protection Bureau, and I think this is very helpful. Because notice that, out of all these different elements of a worker’s financial empowerment, number three is tracking income and benefits.

So this is an important part of overall financial wellbeing. That’s number one. The first bullet point, setting goals, that’s getting that career plan in place. You cannot do, in most cases, those two, without that broader context of these other elements of financial wellbeing. Cashflow and budgeting, saving, of course, I already mentioned goals, mentioning debt. I want to put this out there, just to remind us, as we think about solutions, it’s often occurring in this broader context of financial stability for working families, rather than one isolated element, career advancement only, benefits cliffs only. And perhaps solutions, the ones that are going to be most promising, are going to address many elements of what you see on your screen right now. Next slide please.

I’d like to point out for the audience, that our work at the Atlanta Fed, in this area, started out purely as research, and we had a set of papers actually just beginning to investigate this connection between workforce development and career advancement and public assistance loss, the benefits cliffs. The first and seminal paper from this body of work, as you see on your screen right now, Benefits Cliffs and the Financial Incentives for Career Advancement: A Case Study of a Health Care Career Pathway, this lays out many of the issues I just articulated in the previous slide. This paper has been downloaded over 4,200 times in the last few years since its release. And I encourage anyone that this is a new topic to look at this paper, in order to understand this relation between public assistance and workforce development more deeply. Next slide please.

Now, our work at the Atlanta Fed could have, of course, stayed in just a research lane, and in fact, we continue to do research. But we also had a very clear mission from our executive vice president and director of research, which you see articulated in the quote on the screen right now. He said, “Our goal is that every single person in the United States of limited means has access to exactly the same financial planning resource as every other person.” So in other words, higher income households have access to a variety of different financial planning services. We wanted to make sure everyone has a powerful suite of tools at their fingertips. Guided by that vision, we developed the CLIFF suite of tools. Many of you perhaps have used these tools. Stands for Career Ladder Identifier and Financial Forecaster. This is a suite of tools that combines both career advancement, public assistance, and financial planning, into a single tool that we hope executes on some of the elements that we just spoke about in the previous slides. Next slide, please.

The CLIFF tool, together with the resource portfolio, is now part of a nationwide community of practitioners, researchers, employers, that are continuing to address this benefits cliff challenge, in the context of workforce development. And I just wanted to put out some of the ideas and large bins of activities that are going on right now, and you’re going to hear about many of these today. Researching solutions, number one. What’s working? What’s not? What are potential programmatic changes that look promising to address this issue? Number two, providing tools and resources for career and financial coaches. That’s the CLIFF tools that we just talked about, that are being used currently nationwide. Number three, piloting employer solutions. Many of us have heard how employers want to get involved, they want to get engaged on this issue. We’re all exploring ways that employers can effectively play a part in addressing the benefits cliff. And then, finally, number four, supporting innovative pilots that are taking on creative ways to address the benefits cliff issue. And again, you’re going to hear about a lot of these activities today. Next slide please.

I’d like us to conclude with a quote from a interesting source, at least to me, which is the Atlanta Business Chronicle. This is a quote from a worker they interviewed in Atlanta, and it says the following, “The worker got a job at a doctor’s office earning $12 an hour, 20% more than her previous job out of school. The extra $80 a week before taxes was not enough to cover her mortgage and utilities and make up for the lost benefits.” And then, the final part of this quote is from the parent. “I hate to say it, but it made me feel like it was better not to work.” She remained employed, but times got tough. She lost her house and had to move in with her mother.” Now, I am not putting this up here just to provide another anecdote about the benefits cliff. I want to highlight two things before I conclude.

Number one, if we were looking just at employment outcomes, this worker would look like a success. We saw 20% wage gain, but we know from this anecdote that there’s a lot of financial instability induced. And it’s questionable, to what extent, that would be a success, that 20% income gain, given what happened to this particular worker. Second, this is not the case we hear about of a worker turning down an advancement opportunity out of fear of losing public assistance. This worker took the opportunity and was destabilized. Could financial planning, community resources, employer support, have mitigated this challenge? Thank you everyone for listening through this opening remarks, and I’m going to hand the session over to my colleague, Gabriella Chiarenza, for the first panel.

Gabriella Chiarenza

Thanks so much, Alex. Really appreciate it. And just picking up a little bit on what Alex just mentioned, we’re going to talk a little bit in this section now about, what is it like to experience a benefits cliff? What do families go through? And how are others in the economy impacted? So very unfortunately, due to some technical difficulties, our really wonderful panelist, Talethia Edwards isn’t able to join us today, but I really do want to encourage you to check out her great work leading the H.A.N.D. Up Project. So give that a look. I did have the pleasure of speaking with Talethia for our Fed Community series on benefits cliffs though. And we also had the chance to interview several folks who have lived through cliffs themselves. They were really kind to share their stories with me. So I’ll share a little bit about what I heard from them here, and then, I’ll ask our other wonderful panelists here, Kwain Bryant, to share a little bit about how this issue impacts employers and career advancement.

So it’s really important to know that most public assistance programs are set up to address just one specific purpose. For example, SNAP helps families afford food, Medicaid helps with healthcare costs, and programs like Section 8 can help people to afford their housing. But these are all separate programs, and that structure doesn’t always reflect the real experience of families. Many lower income families are experiencing multiple challenges at once, and so, they have to rely on more than one benefits program at a time for help. That can make the system really, really hard to navigate. Different programs have different income thresholds to qualify. After that, the benefits decrease. So people receiving these benefits may not know that their benefits are about to decrease. Several folks I spoke with said that they didn’t know that was going to happen to them, until they called into their benefits office to report their increased income.

And then, some told me they quickly lost two to three times the amount in benefits that they gained in new income. So I just want to highlight that. Two to three times suddenly gone. It’s really hard to cover those costs, all of a sudden, if you don’t know that that change is coming. So at that point, people who are now facing that benefits cliff often don’t know where to turn. It’s usually not clear. They’re in this moment of transition, and a transition plan isn’t available to them. So this is where having access to tools, like those that Alex just talked about, is really helpful. It’s also really important to have someone like a coach, who knows you and your family situation and can walk through the tools and plan with you along the way. So as with any financial transition, especially one that can derail your family’s stability, benefits cliffs can be deeply stressful for families.

And the folks we spoke with mentioned that another thing that would’ve been really helpful to them, as they had navigated a cliff, would’ve been having a little more time or some temporary financial resources available to them to make that transition just a little bit more smooth. Also, I want to mention how often people we spoke with in our series brought up isolation, shame, and loneliness they were feeling when dealing with a benefits cliff, even though they were experiencing cliffs through no fault of their own. They said that sharing their stories with each other was really important to them, so that nobody felt like they were going through it alone. So that peer experience is really important. They also mentioned how important it was to many of them to share their experiences with other people, like policymakers, community leaders, and officials, who they hoped would help them change the systems and lessen cliffs.

And in fact, many people who’ve been through benefits cliffs, by sharing their experiences, have informed real systems change on this issue. So that’s really important to note. I really want to encourage you to check out our series on fedcommunities.org, that I mentioned, to hear from these folks in their own words about what they experienced. We have several videos and articles where they’re amply quoted and share their own stories. These stories are really powerful and so important to understanding this issue fully. I know you’ll be as inspired as I was by their hard work to raise awareness about cliffs and to make things a little better for others. So in addition to families, benefits cliffs also pose real challenges for employers. So I’m really pleased to bring Kwain Bryant into the conversation now to dig into this. And again, Kwain is manager of career navigation at Goodwill Industries at the Southern Piedmont. Hi, Kwain.

Kwain Bryant      

Hello, Gabriella.

Gabriella Chiarenza

So Kwain, in some cases, employers may not know that the benefits cliff is an issue for people working in their companies. Employees might be really nervous to bring that up to their employers,, when they’re offered something great, like more hours or promotion or a better job when they worry that that could jeopardize their benefits. So can you say a little bit about how this issue poses challenges for employers around career advancement? How is this a challenge for employers who are looking to keep or promote strong workers?

Kwain Bryant    

Yeah, I think awareness is one of the major issues or concerns, that I think a lot of companies, if they’re providing low to moderate income opportunities for individuals, they may not be aware that the benefits cliff tool is an issue. And so, I think creating or enhancing the awareness around the issue is one of the key things, so that companies and organizations can begin to plan around that. And I think it’s also important that we begin to de-stigmatize benefits, because a lot of employees may be afraid to share with employers that they’re currently receiving those benefits, because they have some shame around that. But I do believe that awareness of the benefits cliff tool, as well as de-stigmatizing, are two major opportunities.

Gabriella Chiarenza

Okay, great. So I know that, at Goodwill, you all have sort of brought this issue into conversations with your own employees about career advancement, as have some other employees across the country. I’m really curious why and how have you done this? And what kinds of tools have been helpful to you all at Goodwill in having these conversations?

Kwain Bryant 

Yeah, so I’m really excited. We are part of the Cliff Employer Tool Pilot, and Goodwill is unique in that we have our retail stores. Most people are familiar with our organization, in regards to our retail stores. However, we do have a mission side, where we focus on career development and employability skills. And so, we actually are implementing the tool with all of our participants in our retail stores. And we realized that this has impacted a lot of them, in regards to them receiving increased wages over the last year. And so, we’ve had a lot of learnings throughout this, and my team members, I just want to give them a shout out, Christina, Stephanie and Imay have done a phenomenal job of implementing the tool with over 100 of our retail teammates. And so, we are really excited about the work that they’re doing. And so, one of the things that we really have learned is that, in regards to de-stigmatizing that, we want individuals to see this as a financial planning tool that they can utilize for themselves.

One of the learnings that we found out is that some individuals were eligible for benefits that they were not receiving. And so, once we did the CLIFF tool with them, they realized that they were eligible for other benefits and then, could take that money that they were spending. Let’s say, if they could receive SNAP benefits or Section 8 housing, they can then take that money and put it in a savings for emergency accounts or they could put it into school and education for their children. So just seeing it as a family planning tool was really eye-opening for us. Most of the participants that we did the CLIFF tool with stated that they still would’ve taken the increase in salary. However, they would’ve liked to have known that the increase would take them over the cliff. They could have planned better and strategized, so they wouldn’t find themselves in a crisis situation.

Gabriella Chiarenza

Okay. Yeah, that’s really interesting to hear, because several of the people I spoke with also did that. They went ahead and took the increase, but then, they were struggling, because there’s really nothing to help them bridge the gap. So I’m just curious, when you go through some of those things with folks, using the tools, are there conversations you have, in addition to maybe benefits they didn’t know about, that could help them with that transition? What kinds of other things are you able to do to help people through that? So if they’re saying, “Okay, I know I’m going to have this many months where I might not have this much in benefits before I’m ready to cover the cost,” what kinds of things, as employers, do you think employers might be able to do to sort of help bridge those gaps and help people make that transition, so they can sort of take those employment opportunities and stay with their companies?

Kwain Bryant 

Yeah, I love what you said earlier, in regards to having that time, but also, realizing, what are the community resources out there that could potentially support them in that gap? And so, our team does a phenomenal job of connecting with community resources, that could assist them to fill those gaps or those voids until they get a little bit more stable, in regards to their income and that increase.

Gabriella Chiarenza

Okay, great. And what kinds of feedback have you heard, either from folks, the employees that you’re working with, or also folks on the Goodwill side, about using these tools and how helpful has it been?

Kwain Bryant 

Yeah, so on the Goodwill side and the employee side, one of the things that we’re starting to look at now is that we have what we call new employee orientation. And so, this is something that we are really starting. This is just a benefit, just like other benefits that we offer our team members. We’re starting to look at seeing if we can offer this coaching and walking our new employees through the benefits cliff tool early on. As soon as they get hired with the organization and are learning about the organization, they can also understand their benefits more and how that might impact their family and how they might make better decisions moving forward.

Gabriella Chiarenza

Great. And I like what you said about folks sort of feeling like, “Okay, I don’t have to feel as much shame or frustration about this issue, because I can just talk about it openly with an employer who says to me, “I know this might be an issue, and it’s not your fault.”” And how important do you think it is to sort of have those conversations openly with employees to say, “Hey, we know that you might be experiencing this benefits cliff situation” or “your benefits might be changing, as we change your income. We want to work with you through that?” Even just having that conversation, do you think that that’s important, so that employees feel like they’re not in it by themselves or that they have to be ashamed of it?

Kwain Bryant 

Yeah, it’s extremely important. And again, I think, if the company and organization can position it as a way as this is a benefit and an opportunity, as opposed to having the shame or taking away the shame around it, I think that’s key. I think it’s also important for team members to really understand, to see this as a planning tool for themselves and how they can navigate to continue to advance in their career. Because the fact of the matter is, if they do go over the cliff, even though they’re having this advancement in work, they bring their personal experiences to work with them. And so, now, they’ve shown themselves to be a strong candidate, doing great work for the organization, but they may not be able to perform at their highest level, if they’re having those challenges.

Gabriella Chiarenza

And I don’t know if you’re at this point yet with where you are working with the tools in these kinds of conversations, but do you have any sense of how this is helping Goodwill to be able to retain really great folks and be able to promote workers who are really important to the organization and be able to keep them, as opposed to maybe losing folks or having folks struggle otherwise, which we know impacts people’s ability to work, if you’re stressed out about your financial situation? Have you seen any sort of evidence of how this is sort of helping Goodwill in that sense?

Kwain Bryant 

Yeah, and I think we’re unique in that way, in regards to our career coaches that we have and career navigators that are working. And it’s all about relationships. It’s, how do we build those relationships? And connecting with our team members and walking alongside them throughout this process, see how we can continue to support them. And so, once they know that we are there to support them, to try to advocate for them, as well as provide additional resources to support them, they’re more willing to stay within the organization and work through that transitional period, as opposed to going outside of the organization, looking for more opportunities, that they could earn more money, that won’t allow them to have to deal with the cliff issue

Gabriella Chiarenza

I see. So in a way, it’s almost a way to be sort of an employer of choice, right? To be able to offer help like this and just support for your employees, just as you might through any other benefit or support system you get at work.

Kwain Bryant 

And that’s one of our goals. We want to be an employer of choice, and we realize, as an organization, that we can do better in this area. And that’s why we’re actually looking at it, and we’re being very transparent to see, “How do we continue to advance our team members within the organization? How do we retain them? And how can we support them as they’re going through this transition?”

Gabriella Chiarenza

Great. So Kwain, before we turn it back over to our other panel, is there anything else you wanted to mention about your experience working with the tools or anything else around the benefits cliff, from an employer’s perspective?

Kwain Bryant 

Yeah, I think, from the employer… I’m excited that our organization has decided to make this a focus area, as well as beginning to advocate within the community, for our community partners and other organizations, that this is an issue that we are seeing and that we might be able to start to lead the way and assist other organizations in our community in how they can begin helping their team members and participants navigate the benefits cliff. Great. Kwain, thank you so much for those insights. Really interesting to hear. So now, to learn more about how a few other innovative programs are addressing the benefits cliff, let’s turn it over to Brittany Birken of the Atlanta Fed. Britt?

Brittany Birken

Thank you, Gabriella and Kwain. Really appreciate you lifting up important family considerations, worker insights, and certainly exciting to hear more about the employer pilot and how that’s progressing in considerations for employers. And now, want to turn and talk with three leaders who are working on other innovation pilots and mitigation strategies, that might help inspire other pilots that we know are in consideration across the country. So thank you each for being here. We’re going to dive right in. Each of your innovation pilots are designed to mitigate benefits cliffs, but you all have taken very different approaches.

So I’d like to take the first few minutes to ask each of you to please describe your targeted population and how your pilot is designed to support economic mobility. Michelle, the work in Florida has been ongoing for some time and focuses specifically on the childcare benefits cliff. Can you please take a few minutes and talk about the pilot design and participants and setup for the project?

Michelle Watson

Absolutely. So our project was called Fates, Families Ascent to Economic Security, and it really dealt with the childcare cliff. And what we were seeing is we were seeing families that we were in minimum wage to low wage jobs. And as they went to try and receive job training, education, certification, were really concerned about, as they were reaching the economic ladder, what happens to their childcare, which, in the state of Florida, is at least an $8,000 benefit per child, depending on your child’s age. And so, as Alex was speaking about benefits cliff, that is a significant, what I like to call, a ravine.

It’s not even a cliff. You just fall into a ravine in Florida. And so, what we did is we partnered with local funding sources to come together and basically worked with families through our career source and our workforce system, to really work with families to say, “We want you to reach economic security. We’re not quite sure in Florida that 85% state median income is that threshold. So once you hit that threshold, we’re going to lay over childcare benefits for a period of three years, where you continue your job training certification and upward mobility, so that we can take some of that toxic stress off of you.”

And then, we could actually demonstrate the impact and the ability to sustain that family budget, for that family to be able to make better decisions and to take away all of the stressors that happen. So our first cohort, we really dealt with individuals who are working on their medical field type of certification, CNA to RN pathway. And then, our second cohort, where we learned many, many lessons, we really opened it up to a diverse number of occupations, and we saw very different pathways. And so, we were able to really respond to the multiple needs with different strategies. But ideally, at the end, all of our participants were so grateful that we gave them excess time to receive subsidized childcare, as they finished up their programming, as they were getting to the economic security threshold, that allowed them to have a nice balanced budget for their families.

Brittany Birken

Thank you, Michelle, and I appreciate you alluding to lessons learned. We will definitely get to that. For families with young children, we know childcare is one of the highest cost centers in the family budget. Housing is right up there. So Geoff, your innovation pilot in DC, it has a heavy focus on both workforce coaching, but also on housing. So would love to kick it to you to learn a little bit more about your pilot.

Geoff King

Absolutely. So yeah, our target population is 600 families that have experienced homelessness in the district, that were in our shelter system, moved on to rapid rehousing programs. The district has made a lot of progress in recent years on a housing first approach and making family homelessness much rarer. But what we struggle with, just based on a lot of what’s been described here already, is the benefits cliffs for that population are specifically significant. And I know that the Federal Reserve actually just released a briefing paper on this within the last couple of weeks, just highlighting the extent of that challenge in DC, in addition to our program, in terms of our proposed solution there. But in general, we find that single parent household, that have a lot of different types of public benefits and that have housing benefits specifically, again, they don’t tend to return to homelessness, from our rapid rehousing programs, but it’s really hard, especially with our cost of living here in the district, to get families to advance.

What we find is that, really, even if they get a relatively decent paying job, in a lot of cases, it’s still really hard to make enough where you’re actually not just getting caught right back in that trap of benefits cliff. And you’re really no better off than you were before. And so, our program has a few key aspects to it. We are accounting for childcare, healthcare, SNAP, and tenants benefits in our equation. So essentially, what we’re doing is, as families have earnings that cause them to start to lose those benefits, we are first reducing their amount of rent that is due.

Our families are paying 30% of their income in rent, as part of their housing assistance, but we are doing dollar for dollar reductions in the cost of that rent, to offset the loss of some of their benefits. And then, after the point where we can no longer make up for that in rental discounts, we also have an up to $10,000 per year cash fund that we’re applying towards these families. And we’ve gotten this kicked off, and our first participants started about 10 months ago in the program. We got up to 600 families back in the spring, and really have gotten to the point now, where are fully enrolled and trying to help families move beyond just meeting basic needs. And based on the career work, and I will say we have some robust career and family support services that go along with the program, in addition to those benefit cliff mitigation strategies.

Brittany Birken

Thank you, Geoff. I really appreciate you sharing that overview. And Marielle, I want to pivot to you, and the pilot that’s in Nashville in the surrounding counties includes elements of workforce coaching and transitional benefits to mitigate any potential cliff that families may encounter. Can you please share some details on the design of your pilot and the participants?

Marielle Lovecchio

Yes, absolutely. So I direct the Tennessee Alliance for Economic Mobility, and we’re a public private partnership comprised of 32 organizations that are working across Middle Tennessee to support 900 families in moving beyond the benefits cliff. So we call our pilot Our ChanceTN . We’re doing this work really through the Tennessee Department of Human Services and their Tennessee Opportunity Act. And it does require pretty much a rigorous research element. So there is a randomized control trial element to our pilot. So the core is that every family has access to a family-centered coach and customized resources and financial counseling, that’s focused on navigating families beyond the benefits cliff.

But because of that randomized control trial element, we actually have three pathways. We call them Dream, Hope, and Inspire. And what that allows us to do is, essentially, to understand the impact of a higher intensity coaching versus a lower intensity coaching and then, the impact of the transitional benefit versus not.

And the transitional benefit is essentially for those families in the pathways that are eligible for it, when they make a decision to move themselves into a cliff, they work more hours, they take a promotion, and they end up in that cliff, they actually have access to an amount that’s really calculated based on their household size and income and benefit utilization, that’s then applied to the bills that they request. So that’s how it doesn’t exacerbate the cliff. We’re able to actually make direct payments to childcare providers and housing providers and some health providers for approved costs.

Brittany Birken

Thank you. So definitely, a variety of approaches, all working on mitigation strategies, that might help inform solutions going forward. As we all know, there’s the detailed work of planning, and then, there’s the information that’s hugely valuable, that can really only be gleaned once you’ve begun the implementation. So love to dig in a little bit more and ask about any adaptations that you’ve made to accommodate the needs of participants or to shift the pilot. Michelle, I know there have definitely been some pivots, and you alluded to one between cohorts in the course of your project. Can you share a few highlights?

Michelle Watson

Absolutely. So I just want to, for context’s sake, let you know that our pilot took place pre-COVID and post-COVID, for frame of reference. So when we were recruiting for our first cohort, we were asking individuals to abandon a job that they had, that they felt secure in, to go on this journey and receive some sort of education or job training program. Well, when you were in a job, it’s really hard for you to trust somebody. And at that point, the Federal Reserve Bank of Atlanta hadn’t released the CLIFF tools, which really, when they came online, created a very different environment for us for recruiting. So once we had our first cohort, we were really able to show the career lattice around the health field in a really meaningful way. So that’s where we got the most participants coming in. post-COVID, everybody was looking for different jobs and different opportunities, because they didn’t want to be furloughed, should another pandemic come through.

So they were actually more interested in finding high wage, high demand jobs, coming out of COVID. The problem though is that they had extreme social service fatigue. Many of them had to navigate our state’s unemployment benefits system, the Medicaid system, our SNAP system. And so, they were very tired when knowing who do they go to get help. So one of the things we did with our second cohort, not only open it up to different occupations and then, had the CLIFF tools at our disposal to really be able to map out what economic mobility would look like, should they take the plunge and move into a high wage, high demand job, but we made sure that they had navigators. So we had family coaches, that came in, and they could work with anything, whether it be a developmental delay with their child, whether it be credit recovery and financial literacy, whether it be access to a thousand dollar fund for emergencies, that would take them off their path to economic mobility.

So we definitely had a larger cohort too with different occupations, but we also had to provide a lot more supports. Because they had just gone through such fatigue, and we needed to give them a clear path. So between our career source partners and the job coaching, our family coaches, and then, our early learning coalitions that were supporting the child development side, we had created a comprehensive system where families were really excited to participate and were more likely to get through their career lattice quicker, because they felt supported.

Brittany Birken

Thank you for sharing that level of detail. Super helpful. Marielle, turning to you, I know you’ve also made some adjustments, based on early implementation experiences. Can you share some of those for us please?

Marielle Lovecchio

Yes, yes. So I think we do have some limits in terms of what’s possible, because we are endeavoring to really have high fidelity of the model. We’re always making changes, because there’s always a need for continuous improvement. But I think the most significant shift is that we’ve added client assistance. What we were hearing from partners, when they were recruiting families in our region, is that families were interested, they were eligible, but they were struggling to make the decision to move forward, because there was some crisis that they were dealing with at the time. So we were fortunate to be able to request sort of a special addition to our model, which allows families to have access to up to a thousand dollars, that they can use to support their goals and moving forward in their lives and, obviously, increasing their self-sufficiency. And ultimately, that enables them to kind of step into that space of longer term thinking. So I would say that’s the most critical change that we’ve made since the launch.

Brittany Birken

Really interesting. So that flexible spending, you both mentioned, and when families need that financial resources and a little bit of slack being a key component. Geoff, certainly welcome you to speak on any adjustments that you’ve made, but also would love to ask for you to please share highlights of the experiences so far of how the pilot’s going or participants, their experiences within the pilot.

Geoff King

Yeah, absolutely. And so, yeah, I think I can kind of answer both of those. We’re really new still. Obviously, our average participant’s only been in the program for six months or so, but what I would say is we definitely, in just informing our economic model, how benefits cliffs, I think similar to Marielle’s answer, that’s relatively set in stone in terms of our regulations from the program. And also, just we did a lot of work with the Fed team, just to work on analysis, that helped inform. That is, as well, I think it’s more, on our end, getting folks to the actual uptick of those, getting to the point where they have those earnings. And I would say, for a lot of our families, we knew that the average family coming to us was not employed at the time of program has been in a rapid rehousing program for potentially a year or two, but really, has a ways to go before they’re getting to where they need to be.

And I will say too that there are some participants that are already working or ready to work and hit the ground running and others that just take a longer approach. And we’ve really tried to just make sure that we’re tailoring those services. I think what we’ve found is just housing, in terms of making sure people are in a place that they feel comfortable in the long run. We’ve had a lot of people relocating. We’ve had a lot of folks who just, I think, needed time to trust and bond with their assigned navigators, what we call our frontline provider staff, that are working on this. And so, I think what we’ve really just been trying to do is get a good understanding of exactly what the differing needs are and make sure that our services are touching on those. And also, that, again, folks understand, as complicated as benefits cliffs are, our program benefits, while they fill those gaps, can be a little complicated to understand too.

So again, we’re really trying to just make sure that folks feel really comfortable taking that next job, taking that next step. And we are seeing some significant increases in employment so far in the program, which is encouraging, at least based on our early data. Still get a lot to go in terms of our evaluation and analysis of this work. And we have a actual control group from a lottery process that we use to select families too. So we’re looking to really learn a lot from that process too. But yeah, I would say we’ve just been really in getting it off the ground mode and been really trying to make sure that we understand our family’s needs and can adjust to those in terms of the frontline experience.

Brittany Birken

Yeah, well, really exciting to hear the early progress, given, as you said, you’re really just getting up and going. Michelle, I know you’ve had some powerful testimonials from participants. Can you share a few highlights on the experience of those that have been engaged in fates?

Michelle Watson

Absolutely. I think, when we are looking at the theoretical model and the design, we made an assumption that, the minute that a family attained a high wage, high demand job, that they were then economically self-sufficient. And what we really saw is, because these families had been in such a resource deficit for so long, that it took anywhere from three to six months for their budgets really to be sustained and being able to then be in a positive revenue state, to then take on the onus of some of these spending issues. And so, what we did is we made sure that we really thoughtful about how we kind of weaned families off, once they kind of hit the magic number, that we decided was a high wage, high demand job, so that they wouldn’t be cast back into toxic stress and then, wondering if this was all worth it and in a deficit.              

So I think that that’s really important is, first of all, this work is very personal. This work is not a one size fits all. That is why a team and support to have solutions ready within a framework is really important. And then, I think the other thing that we really, really recognize is that benefits for two parent families are really difficult to get. And so, the fact that we had a family that had a working parent and then, somebody in a job high wage certification, the fact that we were able to lay over community funds was the first time that they had been able to actually access some sort of public benefit. And it actually, because they had the support system in having two individuals being able to take care of the children, while they were studying or getting their certification, they actually were quicker to go through their programming. But I think that one of our blind spots was recognizing that two parent families do not have access to a lot of public benefits, and they are really struggling.

Brittany Birken

Yeah, thank you. And I remember reading, in one of your reports, that, but for this program, the family would not have been able to move up and over. And so appreciate you sharing that. Marielle, you are always incredibly forthcoming in sharing your learnings as you work to implement the pilots. Are there some lessons learned that you would be willing to share with others, that may be thinking about the formation of a pilot themselves, in their community or state?

Marielle Lovecchio

Absolutely. One of my deepest passions. Yeah, I think it’s interesting how it happens, and I can tell, even the conversations now, that we’re having today, are further along than where we were just six months ago as a community, which is really incredible. But I think three that have felt like the most enduring is the first is just the importance of understanding the need. When we were doing planning for this pilot, we did a really comprehensive needs assessment and asked the big question, what do families need to thrive? And we asked that of families. We asked them what stood in their way. We asked them how the benefits cliff was impacting them, what they would do, what dreams they would have for their family, if the benefits cliff wasn’t an issue. And that informed, essentially, our model, our brand, our messaging. And so, I think, whether it’s pilots like this or with policies, anytime we can have the folks that are closest to the issues really casting that vision and, ideally, also explaining what are those barriers to that vision, that is critically important.

The second is really creating a culture of learning and growth and celebration, because this work is so challenging. And it does need constant iteration, constant shifts. And so, you want to be in a place where you’re getting feedback or you’re seeing a problem and you’re able to actually move in community toward a better solution. You can do that. We’ve found, more consistently, by recognizing the celebration stories of families. So we have partners that share, every Friday, on our project management platform of what is something they want to celebrate. And so, what we can see is, oftentimes, they’re celebrating the caregivers that they’re working with, but sometimes, they’re celebrating one another in the collaboration. And it’s been really incredible to see those stories shift. The third, which I’ve heard a lot about today, which is really exciting, is the social and emotional experience of families being very mindful of considering that, when doing any sort of pilot like this. As we’ve heard, it takes time for families to establish trust in a relationship with their coach or to establish more trust and hope in themselves, that change is possible.

One of our celebration stories actually happened last week. A caregiver jumped over a cliff, which was so exciting and we’re so proud of her, but what her, I think, initial reaction was was fear. Because she had become, of course, accustomed to something, and it was almost like she felt like she had done something wrong in jumping that. And so, her coach encouraged her and explained to her, “You’ve actually done everything right in this process. You now have more for your family. You’re financially better off.” But being mindful that that takes time to understand.

And so, kind of leads me to the last point, which is that we have hired peer ambassadors who are pilot participants to be a part of our pilot, a part of our backbone team, and part of their role is sharing their stories and communicating with other caregivers and sharing their stories. And I would say that any pilot considering this work, I would recommend really thinking about the critical nature of storytelling and how social we are. So I’m excited that, soon, we’ll be able to start sharing those stories with caregivers, with each other, to kind of help prompt and motivate some of this change. But I think, without that, it can feel like, again, this caregiver jumped over a cliff, she was sort of in company on the other side, and when she got to this other side, she’s a pioneer and she doesn’t really know people yet, who are doing what she’s doing. So thanks, Britt.

Brittany Birken

No, thank you. Yeah, in all of this, hearing a lot about relationships and trust, which makes complete and total sense. And so, a quick follow up to that, Marielle, and then, I’m going to look at Geoff and Michelle, would be, when you were setting up the pilot and thinking about the coaching model, how did you all approach the decisions? Or what were the considerations around the relationship development component and things that might inform others as they’re thinking about the importance of, not just structurally the pilot, but really, how you set up the interactions to maximize success?

Marielle Lovecchio

Right. So we are housed at the Martha O’Bryan Center, which is the oldest nonprofit in Nashville. And they had been piloting, essentially, a two gen approach for two years, and they saw the impact of the family center coaching model out of the prosperity agenda. They saw all of the issues that caregivers were presenting, and I think the reason why they wanted to move forward with that model, which places caregivers at the center and really kind of moves forward at the pace of caregivers goals with them in the driving seat. But I think they also recognized that there was this benefits cliff system level issue, and that’s why they saw this opportunity to step into the societal issue with all of the experience they’ve had working directly with families.

Brittany Birken

Thank you. And Geoff, would ask you to speak a little bit about relationship considerations and how you thought through that when you were establishing the pilot.

Geoff King

Yeah, no, it’s been huge. I’ll say, for us, we really wanted to build on a lot of other work that was already happening in the district, both on the homelessness side of things, as well as our public benefit. And our tenant program specifically is taking a two gen approach in the last couple of years and wanted to build on some of the learnings from that too. We also did a lot of focus groups with participants in our rapid rehousing program, looked at a lot of survey data, talked to our advocates a lot, researchers really, and kind of designing what we have here.

So just, I will say, even to get the program off the ground and get the funding for it, we needed to implement both legislation at the district level, as well as regulations. And so, it was really important to get buy-in. Our mayor, Muriel Bower, our director, Laura Zeilinger, were really behind this, but not only them, the council has unanimously supported it. We had a lot of community support. So again, I think being able to… And also, I would say, just doing the work on the backend.

Obviously, I mentioned the Fed as a great partner in the analysis work we did in design, but also, just again, covering all the details, having things that are ready to go, and building on them. And again, just getting everyone behind trying this effort, in agreement that this is something we want to learn from and hopefully use to improve some of our programs more broadly, I think, was really key in an ongoing basis, obviously. So we have some great partners that we work with in implementing the program. Greater Washington Urban League, Fedcap, and Capital Area Asset Builders are three of our providers that, again, had already been doing a lot of work in the community.

And so, it’s great to leverage partners that are both used to working with us and really have frontline staff that know our population, that really are focused on meeting their needs, independent of their work with us even. And so, yeah, I think that’s all critical to our prospects for success and really, just the need to continue to partner, not just with those providers, but really with the broader community and making this successful is very important for us.

Brittany Birken

And Michelle, I want to ask you maybe to answer on two levels. One would be the considerations of relationships between coach and the participants or clients, but then, the second was, in your pilot, you really brought together two different entities, at Workforce Board and Early Learning Coalition, that administers the subsidies. So we’d love for you to react to you were developing relationships on multiple levels and what insights you might provide in bringing systems together.

Michelle Watson

Absolutely. And I think you are spot on. Given that we’ve kind of backed into the infrastructure of our innovation product, we really needed to work on change management within the silos of the two organizations and the way that they typically and historically worked, which was our career source board and our early learning coalition, to kind of let them understand, with this funding, with this opportunity, it’s okay to break the rules, right? You’re not constrained to the typical job coaching that you’ve historically done under another federal program, that you can step outside, you can be more immersive, you can have as many touch points. It is actually celebrated.

And so, I think that, through the change management we did with the organizations and those organizations being really committed to making this project work, it naturally started to build trust with the participants, because they understood that these individuals were here to help them. And then, secondarily, as you know, participants are your biggest cheerleaders. So once they got through and were able to have their testimonies about, “I feel like I could call my coach, no matter what time of day, and they would still pick up this phone today, even three years out of the project,” that means that those relationships were really created and there was the opportunity for that participant to be successful. But please do not underestimate change management within your infrastructure, if you’re utilizing an already built system.

Brittany Birken

Thank you. And my last question is for all three of you, any of the three of you really, which is just, any final lessons learned, that you weren’t able to share, or anything you would want to make sure that you could express to others, that are thinking about taking on a similar project or pilot?

Michelle Watson

So mine would be be flexible. It’s really hard to evaluate this work, because of the human capital you’re working with. And so, we had participants that were in school for 24 months. And so, while they were in school for 24 months, they only had a year to stabilize their budget. And then, we had some individuals that were going through an eight week Salesforce certification, where they would come out and be placed making 65, $70,000. And so, what we basically said is that three years is dependent on the situation. And so, what we did is, with the Salesforce example, we gave them up to 18 months, and then, we took the remaining dollars and we applied it to those individuals that were going to take longer to get to sustainability, so that we were always being reactive to personal situations. So that we would not stop them on their trajectory and their pathway to economic self-sufficiency.

Marielle Lovecchio

I would add the importance of people in all of this, whether it’s people-centered processes, to the degree possible, human-centered processes, if you’re doing research, really being mindful of the burden to families, the experience and how that could be triggering. What do you need to collect? What do you not need to collect? Only collect what you’re actually going to use, in terms of data. And then, with people, whether it’s you have a backbone team and you’re doing collective impact or partners or whatever your mechanism is, they’re the most critical elements. So we have an incredible backbone team, that is just so diverse, in terms of gender and ethnicity and otherwise, generation, and then, partners are similar. I think one recommendation is just really front load the idea that, if you’re doing something like this, you’re essentially a startup. And so, there’s just going to be constant changes that are needed. And I think a lot of folks have gotten into that mode, and we’re all collaborating really effectively together. But of course, when you’re just starting, it’s, of course, a little difficult to navigate that. So yeah, people, take your time finding the right people.

Brittany Birken

Wise words. Geoff, any last comments?

Geoff King

I would definitely echo a lot of that and just add, I think that, from my perspective, it’s really important to get the opportunity to do work like this, to at least have some things that leadership, and we were lucky, in our case, and other folks at are our agency, have in mind, be thinking about these solutions, and know, “Maybe I can’t fund it this year, but when that next thing comes around, the next opportunity, your next chance you’re in front of a funder, “Hey, this is something that we think could really work.” And then, again, as I mentioned before, make sure you’ve done the homework, that you can back it up, that you can show the community buy-in, and then, also, as you’re implementing, you continue to get that buy-in. Then you learn lessons from that and can show responsiveness. I think that’s going to be really important to our success in this moving forward.

I think, obviously, we feel good about the infrastructure we have to start, but this will not be successful unless we’re really focused on, again, making sure that our families are benefiting and that others in the community understand what we’re doing and that we can tell those stories. And also, just again, make sure that we are making some pivots and adjustments to what we’re doing, to be responsive to their needs, because there’s just a lot of different needs. And we just definitely recognize individuals that we want them to have agency over things, and that’s the thing that we just continue to hear a lot in our design work too, the families didn’t want to feel like they’re being told exactly what to do or where to go, but we were actually there to help and listen to them.

Brittany Birken

Thank you. I want to thank all of you, in addition to Kwain, Gabriella, and Alex, for their contributions. But you all are incredibly gracious, both today, but always, in being very open to sharing the work that you’re doing and the learnings that come from it and how that might inform potential solutions. So just really want to thank you all, and with that, I’ll turn it back to Gabriella to close this out.

Gabriella Chiarenza

Thank you so much, Brittany, and again, I’ll echo your thanks to all of our panelists. Wonderful job today. And really important information about this very complex issue. It’s really inspiring to hear all the work that everyone’s doing, and thank you all for joining us today, attendees, for spending your valuable time with us. Just before we close today, just a few small requests, one is to please complete the survey that will be sent to you immediately after the event. So today’s session, including slides, will also be available on YouTube and the Connecting Communities page of our website in about two weeks. Please do visit Fed Communities at fedcommunities.org to access our series on benefits cliffs that I mentioned earlier. Again, you just click on the Stories tab at the top of the fedcommunities.org page and then select Benefits Cliffs Stories. You can see the whole series there.

We also have links there to the Atlanta Fed’s tools and their other work on this issue, so you can get everything in one place. And don’t forget to subscribe to the Fed Community’s newsletter. For your convenience, we’ve included a QR code right here on this slide, which you can scan with your phone, and that will allow you to go right to our page and subscribe to the newsletter, where you get all the good information about what we’re working on. Finally, please be sure to follow us on social media for details about future Connecting Community sessions. Thank you again for joining us today for Connecting Communities. Enjoy your evening, and take care.