Poverty reduction through asset development
“Assets are hope in concrete form.” (Michael Sherraden, American Dream Demonstration)
Poverty reduction methods are of two general types: income-based and asset-based. The difference between them is embodied in the clichéd difference between giving a person a fish and teaching a person to fish.
Income-based measures are responses to a situation, focused on addressing immediate needs (cash, food, shelter), most often in a crisis-focused way. Descriptions of these programs (if not the names themselves) often include the word, “emergency.” On their own, income-based measures do not alter the root causes of poverty. Their utility is in basic survival, and in whatever degree of asset development can be facilitated from their proceeds at the household level.
Asset-based poverty reduction methods are generative and change-focused. The goal is to increase and leverage a person’s assets - whether they be financial/material, or “softer” assets such as skills, experience and education, connections with mentors and helpful networks, or a sense of self-esteem - in order to increase their overall resilience so they can sustain a higher standard of living.
Both types of approaches are necessary. But only one can actually claim to reduce poverty.
Welcome Inn’s PLAN Program, launched in January 2007, offers some examples, and underlines the importance of asset development to Welcome Inn’s poverty-reduction efforts.
bizPLAN is a small business development program that offers individuals living at lower incomes the opportunity to spend 10 weeks building a plan for a micro-business endeavor. The participants develop knowledge, skills and networks that extend beyond the relatively straightforward task of writing a business plan. As these assets grow, and combine with increased or more stable income from business activities, household resilience improves. Businesses ranging from eco-friendly repurposing of thrift store finds to lollipop bouquets; from greeting cards to dog walking have been established through bizPLAN.
savingsPLAN is a matched savings program whose funders so far include World Vision Canada, the Hamilton Community Foundation, the Atkinson Foundation, and private donors. savingsPLAN participants save toward post-secondary education or training for themselves, a small business start-up or expansion, or the purchase of their first home while attending a series of money management workshops that include workshops specific to their asset goal. “Match dollars” are allocated monthly to motivate participants to save, and to help build their savings faster. savingsPLAN facilitates building a savings “habit,” and the development of diverse assets through the saving and money management skills-building process.
PLAN Program participants include the working poor; people in receipt of EI, OW, pensions, or ODSP; people with varying levels of education; people of diverse cultures; people in various places along a continuum of household economic sustainability. One thing they have in common is a desire to create change in their lives that results one of the greatest assets: choices.
Empowering people to develop more assets of all types is the key to empowering them to move out of poverty. Only efforts directed at ending asset poverty will be successful in the creation of sustainable livelihoods for all people. Income-based initiatives are poverty management. The key to poverty reduction and the promise of poverty eradication lies with asset-based approaches.
To learn more about asset development at work in Hamilton, contact Welcome Inn Community Centre.
