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 scale and complexity of today’s world requires a solution that delivers the right information about 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 to drive investments in low-income families as an alternative underwriting tool that captures both financial and non-financial factors of loan-readiness.
To gain access to government or nonproﬁt resources, families are asked to document how poor, isolated, and incapable they are instead of being asked for examples of their productivity, resourcefulness, and reliability. Through philanthropy, FII will match the initiatives of our family partners using the Initiative Score as an underwriting tool for UpTogether Fund capital.
By documenting their progress monthly, we are recording compelling evidence that low-income individuals and families have the capacity to flourish when they are in environments that enable self-determination and mutual support, and where access to resources is determined by strengths and not deficits. The Initiative Score leverages the data we collect from families. The Initiative Score is based on a range of indicators of personal initiative such as participation in lending circles, volunteerism, income, assets, liabilities, and density of social networks. The score will be calibrated to reflect the familiar FICO (300-850) scoring range and will be comprised of financial, social capital, health, and family/youth subscores.