Additionally, 19 million consumers had credit records that could not be scored by commercially available credit-scoring models. The private sector misses vital information about family capacity by using limited metrics such as a credit score and a traditional balance sheet to define who can gain access to working capital. The complexity and diversity of today’s world requires a new and innovative alternative that provides a comprehensive view of the potential of all communities and families, but especially low-income communities and families, to those who hold the key to working capital.
FII’s Initiative Score is that solution – an algorithm that utilizes the data we collect to tell the story of a family’s assets and strengths, and that paints a picture of their “investability.” The score is accessible to the financial sector, government, and philanthropy to drive investments in low-income families as a tool that captures both financial and non-financial factors.
We collect a wide range of indicators from families we partner with, over 400 data points and counting. Families regularly submit data through UpTogether, our online platform, providing common financial indicators like income and assets, but also telling us how their kids are doing in school, how they are supporting each other, what goals they are setting, etc. As a result, we capture the hustle and strengths of low-income communities. These data points are not currently accessible to those who manage and drive resource allocation, therefore, not considered when those in low-income markets apply for capital, access government services, or benefit from philanthropic support.
The Initiative Score is calculated using 70 different step functions that pull data from indicators of family well-being in four subscores financial, social capital, health, and youth and family and is calibrated to reflect the familiar FICO (300-850) scoring range. The actual algorithm used is complex but the 70 step functions pull from 14 data sets and 55 data fields to create one Initiative Score.
Unlike a FICO score, the Initiative Score is a non-punitive evaluator that looks to attribute points for the positive steps people take, rather than take away points for factors outside of people’s direct control. For example, we would not reduce someone’s Initiative Score because of a reduction in savings, but we might increase a score for how those assets were deployed to invest in their family or community, e.g. summer camp for kids, repair car to be be able to go to work, participate in a lending circle. Unlike traditional criteria, the Initiative Score is not just a measure of financial health or prescribed outcomes and is not used to rank people. FII uses the Initiative Score to distribute capital to families through the UpTogether Fund.
Average Initiative Score
Number of families eligible for UpTogether Fund
Number of families who have utilized Initiative Score driven UpTogether Fund
Total dollars disbursed using Initiative Score