WorkLife Partnership (WLP) serves employers by engaging with their staff during some of the most difficult times of their lives: impending evictions, utility shut-offs and inability to afford food for themselves and their families. WLP resource navigators help find solutions to housing, transportation, healthcare, budgeting, childcare and other day-to-day challenges that put their employment at risk.
Of the more than 1,100 clients WLP served last year, 73 percent were female, nearly 20 percent were single mothers and their average wage was just over $18/hour. When only factoring in the cost of bare necessities, there’s no wiggle room should new expenses arise—like a broken washing machine or even money for a school field trip.
After a failed pilot with a credit union in 2017, WLP came to Social Venture Partners Denver seeking funding for the recently-launched Small Dollar Loans Program. The program, which employers pay to be a part of, makes 24-month loans of $400-$1000 through WLP to employees who are struggling financially.
The WLP partnership with SVP Denver came through the Social Impact Investor Group (SIIG). Along with initial funding from the Kenneth King Foundation and The Denver Foundation, a loan pool of $150,000 allowed the program to launch in January, 2020.
The Problem: Since the COVID-19 crisis began to unfold in March, WLP has seen increased demand for both its navigator services and the loan program. “Covid has made the economic inequities that are prevalent in these low-wage jobs even more difficult,” says Liddy Romero, the CEO of WorkLife Partnership.
An updated national study of 8,000 workers by Willis Towers Watson earlier this year showed among struggling employees, four in 10 (39%) said money concerns keep them from doing their best at work. Roughly half of struggling employees (49%) reported suffering from stress, anxiety or depression over the past two years, compared with just 16% of employees without any financial worries. And only 39% of struggling employees were fully engaged at work.
WLP cites similar statistics, and CEO Liddy Romero reinforces that this financial precarity has become especially apparent during the COVID-19 crisis, as many frontline workers are struggling to make ends meet due to unprecedented challenges.
The Solution: After a failed pilot with a credit union in 2017, WLP came to Social Venture Partners Denver in 2019 to pitch for funding a Small Dollar Loans Program. The program, which employers pay to be a part of, makes 24-month loans of $400-$1000 through WLP to those company’s employees who are struggling financially.
The WLP partnership with SVP Denver through the Social Impact Investor Group (SIIG). Our partner-members’ investments, along with funding from the Kenneth King Foundation and The Denver Foundation, created an initial loan pool of $150,000 and allowed the loan program to launch in January, 2020.
The Results: Since the launch of the loan program, WLP has made 91 loans totaling $88,000 and has only had one default, even during the COVID-19 crisis. Of the loan recipients, 71% report reduced stress and 51 percent report increased confidence. Their employers are seeing 85-90 percent increases in retention, as well as improved employee productivity, loyalty and job satisfaction.
During a recent SVP Denver webinar, Romero spoke candidly about the initial project failure in 2017. Yet she knew the demand for a small dollar loan program was there, citing that many low-wage workers succumb to predatory lending or rely on high-interest credit cards when a financial emergency arises.
She said going back to the drawing board, investing in research and development, hiring a full-time staff member to manage the project and giving themselves a long runway to ramp up were all keys to eventual success in attracting the three project-related investments from the three organizations.
“When you have employees who can’t concentrate due financial and other stress, businesses suffer,” says Romero. “We’re grateful to SVP Denver for collaborating with other foundations and helping us make this much-needed loan program a reality, especially during these financially turbulent times.”