Social change work is hard and frustrating and wonderful and terrible; it is also, at times, funny, quirky and just plain fascinating. With this blog we hope to capture all that goes into what we do at Capital Good Fund, and we invite you to join the conversation!

Monday, September 2, 2013

Two Tremendous Opportunities for Impact

Here are two statistics that represent "low-hanging fruit" opportunities for social impact: 
  1. "Nearly two-thirds of the 5.4 million legal immigrants from Mexico who are eligible to become citizens of the United States have not yet taken that step." (Pew Hispanic, The Path Not Taken February 2013)
  2. "Roughly a quarter of Americans eligible for federal nutrition assistance don't sign up for it," and "The U.S. Department of Agriculture...says that in fiscal 2010 nearly 51 million Americans were poor enough to qualify [for food stamps] but only 38 million received benefits." (Huffington Post, Food Stamps Avoided By Million of Eligible Americans August 2013)
Being a U.S. Citizen confers numerous monetary and non-monetary benefits, from increased access to benefits such as student aid, to the ability to vote, petition family members to come to the U.S. and eliminate the fear of deportation.  In the same vein, food stamps not only can mean the difference being being hungry and eating three square meals a day, they also reduce one of the main stressors of being poor: the fear of not having enough income to meet expenses.  Clearly, then, given the induspitably high impact of becoming a citizen or qualifying for SNAP (Supplementary Nutrition Assistance Program), combined with the (relative) ease of taking either step, we are presented with an opportunity to change lives at low-cost.

Why This Opportunity?
Before we do anything, however, we need to first understand why this opportunity exists; if citizenship or SNAP benefits are as attractive as they seem, wouldn't more people take advantage of them?  It turns out that there are a number of barriers that we need to address, some pecuniary, some cultural, some psychological and some logistical.  For instance, roughly 18% of those that are eligible for citizenship identify "the cost of naturalization" as the primary reason for not initiating the naturalization process.  This is not surprising when you account for the fact that the U.S. government charges $680 for the application, and immigrants can spend anywhere from nothing to thousands of dollars to receive help with the application, preparation for the exam and other assistance. 

Why The Cost?
There are several reasons.  First, the amount charged by the government has steadily increased, from $95 15 years ago to today's $680.  Second, the naturalization application forms aren't easy, especially for those with limited English prociency; as a result, low-income families often spend money on help, sometime paying unscrupulous, even predatory, people and companies for the service.  This can drive up the cost to $3,000 and beyond for some families.  And finally, there is a cost-benefit analysis to be done: renewing one's legal permanent resident status, which is infinitely better than being undocumented, only costs $450.

One Naturalization Approach
Fortunately, there are fairly simple ways to address this problem and encourage more people to fully invest and partake in our democracy.  As a case in point, we partner with the three (3) non-profits in Rhode Island--the Catholic Diocese, Dorcas International Institute and Progreso Latino--that are accredited to assist in the process; these agencies charge around $200 for help with filing forms and preparing for the naturalization exam (we also partner with attorneys that offer immigration services, although they charge more).  Through the partnerships, clients that are eligible for citizenship but can't afford the fees are referred to us for our immigration loan; if approved, we lend the $880 to the family, which then continues with the process while paying us back in small installments over 24 months.

Thanks to this loan, over 40 families have attained citizenship with a nearly 100% repayment rate.  Think about the potential for scale here--we could be doing hundreds of thousands of citizenship loans sustainably (thanks to interest income) and with tremendous benefit both to the borrower, her family and society as a whole.

Food Stamps
When it comes to SNAP benefits, which can range from as little as $30 to hundreds of dollars for the poorest families with children, the "market opportunity" is astonishing.  Indeed, we could come close to dispensing with food insecurity in America if 100% of eligible families signed up for SNAP.  So why isn't everyone signing up?  Ellen Vollinger of the Food Research and Action Center summed it up nicely: "Some people don't know [they're eligible], for other it's difficult to navigate the process, for others it's the stigma."

I've seen these barriers firsthand during one-on-one Financial Coaching sessions.  Despite what some politicians say, most people don't want to be dependent on public benefits, and a surprising percentage of the poor don't take advantage of them for that reason.  Still others find it difficult to work through the application, or are turned off by the generally unpleasant application process, or simply are not aware of their eligibility.  Still, all of these barriers can be addressed through our Coaching service, or through any number of programs that serve the poor, be they focused on job training, GED preparation or domestic violence.

More Solutions
One of the ways, for example, that we overcome the stigma is by pointing out the extent to which wealthier Americans take advantage of the system through loopholes and lobbying--if they do things that are borderline or outright illegal, you shouldn't feel at all bad about receiving benefits to which you are 100% entitled!  Or, we take a look at the client's budget and show how SNAP will mean the difference spending more than they earn and being able to put away money into savings.  And finally, after screening for eligibility, we can walk the client through the application.

Again, this doesn't cost much money to do and has phenomenal social impact.  Not only does the family gain access to more food, but the long-term benefits are difficult to fathom: we know that hunger impairs cognitive development, which dramatically reduces eduational attainment, which leads to a less educated workforce, which means more people on public benefits and a small tax base...In other words, hunger costs us much more in the long-term than food stamps cost in the short-term.

In short, so many social and environmental problems are overwhelming, multi-facted and complicated that it can be easy to overlook low-cost, high-impact initiatives. So when we think about immigration or public benefit reform, we have to keep in mind the reasons why people do or do not take advantage of these opportunities.  Low-hanging fruit won't get us where we need to be, but it's a clear step in the right direction.

For More Information:

Pew Hispanic Center
National Council of La Raza
Share our Strength
Feeding America
Robert Wood Johnson Foundation

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