How Refugee Talent Can Be An Asset To The American Business Community

The U.S. government has committed to welcoming hundreds of thousands of people displaced by major refugee crises, including 95,000 at-risk Afghans who worked alongside the U.S military and 100,000 Ukrainians displaced by Russia’s recent military invasion. These developments represent an enormous opportunity for the American business community to help refugees to integrate into the U.S. workforce.

The U.S. Chamber of Commerce Foundation and Tent Partnership for Refugees hosted a discussion to share how U.S. companies can navigate the complexities of developing a successful refugee hiring initiative. The briefing covered:

  • The refugee context in the U.S.
  • Hilton’s experience recruiting and integrating refugee talent at its hotels throughout the country, and Greenberg Traurig’s perspective advising their corporate clients on legal matters related to refugee integration.
  • How Tent can help companies effectively recruit and integrate refugees into their workforces.

Check out the presentation below!

Everything Entrepreneurs Need to Know About Income Share Agreements

Income Share Agreements, or ISAs, are a popular and well-established method for individuals to access capital.

If you’ve heard of an ISA, chances are, it was related to education. ISAs have been popular in the education space for about a decade, helping would-be students pay for programs, degrees, certifications, or bootcamps. However, ISAs have applicability well beyond learning. They’re an incredibly powerful tool that lets people use their future potential as collateral for capital.

That’s exactly why they’re a perfect resource for entrepreneurs to fund their ideas and grow their businesses.

In this article, entrepreneurs can learn everything they need to know about income share agreements.

Remember, the ISA approach is a revolutionary new way of investing directly into people and their future potential.

What’s an Income Share Agreement?

The ISA concept is simple: you agree to pay a portion of your future earnings in exchange for immediate cash. More formally, an ISA is a contract between a person and a capital provider where the person receives upfront funding in exchange for a fixed percentage of their future income. ISAs aren’t traditional debt-based lending. Like a loan, you will need to pay them back. However, unlike a loan, there’s no compounding interest or fixed monthly payment.

The central belief of an income share agreement is that your future potential is worth investing in. That’s why they’re a uniquely aligned funding option for founders.

How Most ISAs Work

Let’s assume you’re a founder exploring whether an ISA is right for you. Here are a few more key facts about how most Income Share Agreements work:

In most cases, you’ll pay the funding source a percentage of your income over a specific period or a set number of payments. If you’re earning more, you’ll pay back more, while if you earn less, you’ll pay back less.

Many ISAs cap the amount of money to be repaid, so that you’ll never pay more than a certain amount. This prevents very high-income earners from paying an unfair amount.

Usually, there’s a salary floor. Those who earn less than a specified amount – typically $30-40K per year – won’t owe any payments during that time.

ISAs aren’t based on your credit score – at least not entirely.

Most ISA agreements outline that the recipient pays back 5-20 percent of their income over two-10 years. Shorter agreement lengths typically have a higher income share percentage.

Why Entrepreneurs Should Care

It’s incredibly hard for founders to raise capital. Studies show that less than two out of 10 founders will raise capital from a fund or financial institution. The other eight people will turn to personal savings, credit card debt, or wealthy friends and family for money.

Even if you’re privileged enough to be able to turn to one of these funding sources, each of these is expensive in its own way.

For founders who don’t have wealthy connections or thousands in their savings account, the ISA is an option for that first check.

Supporting American Workers, Increasing Financial Well-Being

In this era of intense political polarization, the Earned Income Tax Credit (EITC) enjoys broad bipartisan support. The EITC lifts millions of households — especially families with children — out of poverty, as the average size of this refundable credit is more than $2,400, according to the Internal Revenue Service (IRS). The EITC also encourages work (you must have earned income to qualify) and is an administratively efficient public benefit as recipients only need to file a federal income tax return to receive it. However, a tradeoff of efficiency through income tax filing is that 20% of those who are eligible to receive the EITC do not claim it. Thus, outreach efforts like the U.S. Chamber of Commerce Foundation’s partnership with Goodwill Industries International, supported by The Rockefeller Foundation, to help workers file their taxes and claim the EITC are critical in closing this gap.

What are some reasons why workers who are eligible to receive the EITC do not claim it? To consider this question, it’s important to remember that the only way to get the EITC is to file a federal income tax return. So, a different way to think about the eligibility-receipt gap is as a tax filing problem. One reason workers might not file a federal income tax return is that their income was below the amount required to file. For example, for the 2021 tax year, “Jane” who has one child and files as Head of Household was required to file a federal return if her income was at least $18,800. If Jane only worked 15 hours a week and made $9 an hour, her income would be $7,020 she would be well below the minimum income filing threshold and not required to file but would give up $2,389 in EITC benefits. So, this can be a real stumbling block for new workers and/or part-time workers.

According to the IRS, other groups of tax filers who are less likely than others to claim the EITC for which they are eligible, include those who are self-employed (think Uber drivers), rural residents (who may lack access to tax filing assistance services such as the Volunteer Income Tax Assistance (VITA) program offered by Goodwill Industries), grandparents raising grandchildren, and those who experience changes in their employment, marital, financial, and/or parental situations. For example, an individual who is currently unemployed may not realize they can receive the EITC based on their earned income in 2021.

Goodwill Industries International’s decision to step up their efforts to boost adoption of the EITC through its partnership with the U.S. Chamber Foundation, with support from The Rockefeller Foundation, is significant for three reasons. First, employers play an important role in EITC outreach. To file taxes, workers need their W-2 forms from their employer. This is a golden opportunity for employers to educate employees about the EITC and options for filing their taxes for free such as the VITA program and the Free File Alliance. Second, many local Goodwill Industries locations offer free tax assistance through VITA. This reduces the “friction” workers experience finding tax help and helps them avoid paying unnecessary tax filing fees. Third, Goodwill Industries reaches another group of individuals who are less likely to claim the EITC: workers living with disabilities who are able to earn income from work in addition to receiving disability benefits.

While outreach efforts through the workplace are important, a better way to close the EITC eligibility-receipt gap is to simplify tax filing. The IRS could simplify tax filing by sending pre-populated 1040 forms to workers with simple tax returns — especially those whose W-2 income meets EITC eligibility requirements. Another improvement would be to increase the amount of the EITC for childless workers who will receive a maximum of $560 in 2022 compared to a maximum of $6,935 for workers with children. Lastly, some workers who qualify for the EITC but struggle to make ends meet during the tax year may benefit from receiving periodic (e.g., quarterly) payments instead of waiting until the following year to receive a lump sum refund.

Employers can play a pivotal role in boosting the financial well-being of many working families by offering good pay and benefits. Additionally, helping employees claim the EITC, provides an added benefit for current and prospective employees. If employers can help the 20% of workers who do not claim the EITC get it, imagine the positive impact it could have on low-income workers across the country.

Learn more about the U.S. Chamber Foundation’s EITC partnership with Goodwill Industries International and other economic security resources.