Selecting_A_Financial_Counseling_Provider_(2).pdf

1 Selecting A Financial Counseling Provider

Selecting A Financial Counseling Provider

Selecting a financial counseling provider (FCP) to deliver counseling services is one of the most important decisions to make when establishing a Financial Empowerment Center. The financial counseling provider is not only the face of the FEC service and primary source of interaction for clients, they also execute the local government’s vision of the program, and as such, are a critical component to the success of the FEC.

Selecting the appropriate financial counseling provider should be a thoughtful, comprehensive decision. At the end of the day, the most important relationship a local government has when delivering FEC services is their relationship with their financial counseling provider.

This document covers the following topics:

❖ Role of Counseling Provider

❖ Types of Organizations

❖ Relevant Characteristics

❖ Additional Considerations

❖ Potential Pitfalls

❖ Selection Process

Click on a topic above to be directed to that section. We recommend thoroughly reviewing this document before making a commitment to a financial counseling provider(s) to understand the considerations for selection, as well as to understand the financial counselor provider’s role in implementing the FEC service.

2 Selecting A Financial Counseling Provider

Role of the Counseling Provider

The financial counseling provider supports the FEC in five main ways:

• Provide counseling services: at their core, they are the direct service providers who conduct the actual financial counseling and are the face of the program to clients.

• Hire and supervise counselors: recruit, hire, train and supervise the team of Counselors (with input from the Local Government Manager) to ensure adherence with the FEC model and counseling process, and correct use of the database. This also includes coordinating Counselors’ professional development, doing case management, and overseeing overall HR needs.

• Support marketing efforts: conduct community outreach events and attend partner events to recruit clients and raise awareness of the program. Counseling providers may also manage a FEC social media profile and provide input into the design and delivery of FEC materials, such as brochures and flyers.

• Establish and maintain partnerships: help develop and formalize partnerships with the community organizations where counselors will be located, monitor site performance, work to embed financial counseling into the service flow, and maintain partner relationships through regular check-ins and partner staff cross-training.

• Data collection and reporting: manage client data collection and engage in reporting and analysis to track individual client progress towards goals, trends, counselor performance, partner performance, and contract requirements.

Depending on the financial counseling provider’s position and strengths, they may also support other FEC efforts, including funding and sustainability and strategic development.

Provide

Counseling

Services

Hire and

Supervise

Counselors

Support

Marketing

Efforts

Establish and

Maintain

Partnerships

Data

Collection and

Reporting

3 Selecting A Financial Counseling Provider

Type of Organization

Most FECs select a financial counseling provider that falls into one of the categories below:

❑ Financial Counseling Organizations

❑ Multi-Service Agencies

❑ Consumer Credit Counseling Services

❑ Local Government Agencies

Nonprofits are typically best positioned to deliver this service because of the following reasons:

Using A Government Agency to Deliver Service

Of 25 operational FECs, counseling services are delivered entirely by government agencies in two FECs, and partially at two FECs (May 2021). Programs that elected to use local government agencies to deliver counseling services based their decisions on the following factors:

• Delivering counseling services through a government agency as opposed to a non-profit provider can reduce potential oversight issues.

• The local government agency was able to transition current staff lines to fill FEC positions

(counselors, Program Manager, and/or Local Government Manager), thus reducing the amount of fundraising required.

• The local government agency had a history of the following:

o Successfully delivering direct services o Managing financial empowerment programs o Conducting community outreach o Existing partnerships with community organizations

The local government agency had the internal capacity to manage and grow the program.

Note: For FECs who choose to use a local government agency to deliver services, the Local

Government Manager and Program Manager should be two separate roles staffed by two people.

Reach into the community and relevant partner organizations

Existing partner connections

Access to target populations

Provide services at a lower cost than govt agencies

Expertise working on financial issues

4 Selecting A Financial Counseling Provider

Relevant Characteristics

Financial counseling providers should have the following characteristics:

Without the experience listed above, a financial counseling provider may be unable to successfully execute the vision of providing a high-quality service that is embedded into the community with the ability to bring in a steady volume of clients.

For financial counseling providers without those characteristics, be aware of the following:

• Financial inclusion expertise: A financial counseling provider’s financial inclusion experience – or lack thereof – will impact the full scope of service, from how they work with partnerships, how counselors are selected and trained, to how they are able to communicate the goals of the program to stakeholders. A financial counseling provider without strong financial inclusion experience may hamper the program’s success.

• Access to target population: Selecting a financial counseling provider without access to target populations will require additional outreach strategies and more targeted partnership development to ensure the FEC is reaching its desired clientele.

• Visibility in the community: Like the point above, selecting a financial counseling provider without visibility in the community may make it harder to reach targeted clients, develop successful partnerships with other community organizations, and fully raise the profile of the FEC as a locality-wide, trusted service.

• Demonstrated ability to establish capacity for the FEC: A financial counseling provider needs to have the capacity to add the FEC as an additional program, including absorbing additional staff, allocating a physical space, and importantly, have the management capacity to fully manage the counseling activities and support other FEC efforts, such as partnership development, marketing and outreach, and fundraising.

If a financial counseling provider does not have the capacity and/or experience to successfully manage this program, additional work will ultimately fall to the Local

Government Manager to complete which can detract from their other FEC responsibilities and negatively affect the program.

Financial Inclusion Expertise

Access to Target Population

Visibility in the Community

Demonstrated Ability to Establish

Capacity for the FEC

5 Selecting A Financial Counseling Provider

Additional Considerations

Below is a list of other factors to consider when selecting a financial counseling provider:

✓ Existing community/social service partnerships: What populations are you aiming to serve and does the financial counseling provider have existing partnerships with the relevant community and social service organizations that serve those populations and neighborhoods?

✓ Capacity to manage growth: Does the financial counseling provider have the capacity to manage growth, and how committed is their organization to having a long-term, truly collaborative partnership with the local government?

✓ Experience partnering in client service delivery: Does the financial counseling provider have experience in partnering with other organizations to deliver client services?

✓ Experience in data tracking and reporting: Has the financial counseling provider prioritized data collection and reporting in other programs and services, and have a track record of data-informed management and decision-making?

✓ Track record of achieving demonstrable outcomes: Does the financial counseling provider have measurable outcomes to date and a track record of achieving desired outcomes and meeting program goals?

✓ Partnerships with the locality: Has the financial counseling provider successfully partnered before with the local government to deliver services, and have there been any contractual or programmatic challenges?

Click here to watch a video featuring the Polk County FEC talk about their experience selecting a financial counseling provider.

https://drive.google.com/file/d/1KAVtyN0DmSkRRmZc8V_mfnFgDUvAeZ7R/view?usp=sharing

6 Selecting A Financial Counseling Provider

Potential Pitfalls

Occasionally there are challenges to overcome to create a successful local government-financial counseling provider. Below are some challenges that FEC localities have faced to be mindful of:

• Differing visions of success: The Local Government Manager and Program Manager need to have excellent communication to effectively execute the FEC. In addition to this relationship, it is important for the financial counseling provider’s senior management to have a shared vision of success with the local government, and for senior management to fully understand and support all core tenets of the FEC model.

If there is not a shared definition of success and agreement on program goals between the local government and senior management of a financial counseling provider, the counseling provider may direct the program and Counselors to complete activities that do not align with the local government’s vision of the program, and thus create tension on how to implement the program.

• Delivering a similar service: Financial counseling providers who already provide a similar counseling service can be excellent selections because of their experience and knowledge in running this type of program. However, in these cases, it is important to confirm that despite this experience the counseling provider is willing to adapt their operations to the

FEC model in any ways the programs may differ.

This includes but is not limited to counselor training, focusing on client retention and goals, integrating financial counseling into social service programs through the community, and allowing the local government to lead the direction of the program. Alternatively, the counseling provider can adopt the FEC model as a separate stream of counseling that runs concurrently with another counseling program.

• Strong community presence: A financial counseling provider with a strong presence in the community can be an advantageous partner because of their connections and visibility in the community but there should be a clear understanding that the FEC is a public program led by the local government.

Counseling providers should understand what this means in practice: that the local government is responsible for outlining the priorities and direction for the FEC, including managing stakeholders, planning outreach strategies, and growing the FEC with additional

Counselors, FEC sites, and/or counseling providers.

• Lack of focus on partnerships: Financial counseling providers with existing connections to programs and/or who deliver other services besides financial counseling need to be willing to develop additional partnerships if the local government desires to do so.

7 Selecting A Financial Counseling Provider

Counseling providers often refer many clients from its other programs to the FEC – which is encouraged – but the counseling provider should not be content with only serving its own clients and needs to put in effort to develop additional partnerships outside of the counseling provider’s current ecosystem.

It is also good when the counseling provider has existing programs to integrate into the FEC, but there should be an understanding that the local government determines the direction of the program and may not want to pursue all partnership opportunities available with the counseling provider organization.

• Human resources practices: HR practices such as salary and promotions can affect the longevity and retention of financial counselors and the Program Manager. It is important to have a clear understand of how a counseling provider hires and retains staff to minimize turnover – counselor longevity is a particularly important aspect of strong FEC performance.

Additionally, if multiple counseling providers are used to deliver services, the local government should be aware of any potential tension that may arise between the counselors and/or Program Managers because of differing pay, benefits, management structures, and/or flexible scheduling.

Research from 13 FECs has shown that clear communication, an early agreement on roles and responsibilities, and a shared understanding of success are critical to a good relationship between a local government and their financial counseling provider(s). Being proactive and having conversations early on to clearly communicate the scope of work, expectations, and division of labor is a best practice to avoid any potential issues.

Tip: Have clear and open conversations with potential financial counseling providers, and particularly with the counseling provider selected before they are contracted, on how you view the program and what you want their role to be. Emphasize that the program is a public service led by the local government and how you envision working together. Make a list of any concerns about their candidacy and bring them up early in the relationship to work through and resolve.

8 Selecting A Financial Counseling Provider

Selection Process

The selection process to find and secure a financial counseling provider can be lengthy but must be completed before submitting the Implementation Proposal. View the main steps below:

1. Understand local government processes: Develop an understanding of the steps involved to select and contract with a financial counseling provider and the timeline to do

so. Understand whether you will need an open Request For Proposals, a direct sole-sourced contract, or a Memorandum Of Understanding. Speak with your procurement and legal teams to understand these requirements and potential timeline as early as possible in your planning process.

2. Identify priorities: Based on all the considerations provided in this document on how to select the most appropriate financial counseling provider, identify what your priorities are and what eligibility will be used to make a final selection.

3. Conduct internal analysis of potential providers: All applicants should be robustly evaluated against pre-determined criteria and the previously identified priorities.

Determine if one or multiple providers will be needed to deliver counseling services to satisfy all of the priorities.

4. Begin selection process early: Negotiations and contracting with a counseling provider can be a lengthy process. To avoid delays in the Build phase of the Implementation grant, it’s helpful to begin the selection process as early as possible so the counseling provider is able to receive funds and hire staff as soon as the Implementation grant is awarded.

FEC planning teams may also find it valuable for representatives from the selected financial counseling provider to be involved in the planning process, as they will ultimately be responsible for managing many of the aspects of the program that are designed before they begin hiring counselors. If possible, invite FCP staff to join planning calls once they are selected to provide guidance on operational questions and orient them to the FEC model.

9 Selecting A Financial Counseling Provider

Implementation Proposal Requirements

Applicants submitting an Implementation Proposal are required to have already selected their financial counseling provider(s)..

In the implementation proposal, you will need to include the following:

❑ The name of the financial counseling provider(s) selected to deliver FEC services.

❑ An overview of the financial counseling provider’s organization, their qualifications to deliver FEC services, their capacity to deliver services and manage the program, and the process used to select them.

❑ A cover letter signed by the Executive Director of the nonprofit(s) or the comparable person at the local government provider asserting a commitment to the program and identifying the key staff who will be managing and operating the FEC.

❑ Identify the staff member who will serve as the Program Manager, or the process and timeline to identify and secure a Program Manager, and the amount of effort they will dedicate to managing the FEC.

❑ The Program Manager’s resume.