Above illustration by Justine Lecouffe

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It’s not often you come across a nonprofit focused solely on financial wellness. Prepare + Prosper Off Site Link is an exception to the rule — and an innovative partner when it comes to banking.

The Twin Cities organization and its volunteers work with low- to moderate-income people to build financial wellbeing through free tax preparation and low-fee financial products, services, and coaching. Sunrise Banks is an original partner whose mission overlaps with Prepare + Prosper’s in offering access to banking products and solutions to communities who have been shut out of, mistrust, or lack access to mainstream banking.

Unfortunately, too many — one in four people nationally according to the FDIC — are living outside the financial mainstream because they cannot afford bank accounts or do not trust banks. When you break it down by race, it is one in five white households compared to an alarming almost one out of every two Black households.

Just over seven million households are considered “unbanked Off Site Link.”

In Minnesota, nearly four out of every ten households of color are unbanked or underbanked compared to one in ten white households Off Site Link,  a disparity that, over the course of a financial lifetime, can cost someone without a bank account nearly $40,000 in fees Off Site Link.

Black, Latinx, Indigenous, and/or customers of color who are banked are often charged higher minimum balances and higher fees to maintain basic bank accounts. The average combination of costs and fees for a basic, entry-level checking account is $190.09 higher for Black customers and $262.09 higher for Latinx customers, compared to their white counterparts Off Site Link.

Prepare + Prosper offers FAIR Banking, short for Financial Access in Reach, to help un- and under-banked individuals obtain affordable checking and savings accounts that offer, in addition to no overdraft fees, more transparency, trust, inclusion, access and partnership.

Prepare + Prosper Financial Inclusion Manager Kim Hover said expensive accounts and reports from ChexSystems, which reports unpaid fees and overdrafts, are barriers for clients.

“Overdraft fees have really punished people for not being perfect,” said Hover. “And FAIR says, people don’t deserve that, instead everyone deserves access to safe and affordable banking options.”

Hover added that FAIR does not require monthly minimum balances, another barrier to maintaining a bank account.

Shaquonna Jackson began her journey with Prepare + Prosper as a customer, utilizing the nonprofit’s free tax preparation services and eventually signing up for FAIR. Now Jackson is part of Prepare + Prosper’s Community Ambassador program, in which FAIR hired four current FAIR customers to promote the program in their own communities and networks, including offering FAIR enrollment at several local libraries.

Prior to joining FAIR, Jackson grappled with maintaining her bank account at a large financial institution.

“They were no longer willing to bank with me because I got behind on fees,” Jackson said.

She added that the mistrust of financial systems can dissuade people from opening an account. Her positive experience with FAIR is a helpful recruiting tool, she said.

“I think the number one issue is trust, you know. A lot of folks have not had good experiences with past banking, so they’re like ‘Why should I try FAIR?’ But once I give them my story, because I’m speaking from experience, that carries more levels to it,” she said.

Prepare + Prosper also offers Money Mentors Off Site Link, a free financial coaching program that works with customers longer-term to help them reach a financial goal. Find more information on Prepare + Prosper and their free tax preparation here Off Site Link.