Asset-based approaches include a wide-range of projects and initiatives that promote savings and the acquisition of assets among people with low incomes, including welfare recipients. These approaches are based on the idea that poverty is not only a question of income but also a matter of assets. Proponents of asset-building believe that enabling people with limited financial resources to make investments in assets – savings to acquire a home, education, a small business, supplies or clothes for a job, or to pass on to future generations – can help them break out of poverty permanently.
Assets appear to have effects that income alone does not. Assets can cushion against sudden losses of income or financial risks, such as starting a new business. Assets can also enhance social capital, participation, and inclusion. For example, homeowners appear to have higher levels of civic engagement than do non-owners and enjoy better marital stability, family health, and well-being among dependent children. Assets may build capacity that can be sustained beyond current consumption needs while complementing existing income supports.