Uses debated for emergency fund Agency urges security-deposit loans

December 18, 1992|By Anne Haddad | Anne Haddad,Staff Writer

Starting a security-deposit loan fund in the county could put to use almost $16,000 in donations now sitting idle, says Sylvia Canon, director of Human Services Programs of Carroll County Inc.

The money has been set aside for broader use as a short-term crisis loan fund that would pay for everything from car repairs to ++ security deposits.

The idea was to offer loans of up to $250 with a pay-back schedule to people who have jobs but find themselves in a financial pinch when for example, a car or refrigerator breaks down.

The fund contains a $10,000 start-up grant from a local foundation that wishes to remain anonymous, plus $6,000 in other donations.

However, Human Services can't start using the fund for those purposes until another $4,000 is raised to match the original grant.

4 The main problem is the fund's stepchild status.

The Community Services Council that started it is made up of representatives from several nonprofit organizations who, if they solicit donations, do so for their individual agencies and are reluctant to ask their donors for more.

"Most of the private nonprofits are doing that now for their own shops," said George Giese, director of the Youth Service Bureau and one of the council members involved with the fund.

"If somebody wants to take the responsibility of raising the $4,000, go ahead," said Mr. Giese.

But if not, the council should consider the security deposit idea, which has been approved by the initial donor, Ms. Canon said.

She said a revolving security deposit fund could be set up so that landlords would directly repay the money, minus any damages owed.

If such a fund is started, Ms. Canon said, she will need legal and accounting advice. Models from other states show such a program can be successful.

The broader idea for a short-term crisis loan fund, however, has ++ less chance of success, Ms. Canon said.

"In other places, they've not had a good experience with payback," she said. "The people we see don't have a great

ability to pay it back. I don't think we should set anybody up to fail, including ourselves."

In either case, Human Services Programs would administer the loan program. The private, nonprofit agency already provides other services to low-income people.

Diane Massey, head of the county's job-training office and one of the original proponents of the loan fund, said she still believes in it.

"The problems I'm seeing are not security deposits," she said. "It's car repairs, which allows them to get to the job, or they lose the job."

Other members of the council, which had its monthly meeting yesterday, suggested a new push to raise the $4,000 in cash or in-kind services such as car repairs or legal services.

"It seems crazy to just have the money sitting around when people need it," Mr. Giese said.

"It shouldn't be sitting around, gaining 3 percent interest at this .. point."

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