The new Family Health Project is a cost-effective, scalable way to knock out child poverty—because we can’t lose another generation of children.
We know two things for sure. Child poverty is far too high in America (affecting 10 million children), and persistent, grinding poverty does big harm to kids.
We know this from years if not decades of research coming again and again to the same conclusion: Poverty stunts their development. It reshapes their brains. It sets them back in school. It makes them fearful and wary. It damages their health. It increase the risk they’ll live in poverty as adults.
The list is long.
All of which sets the stage for an uphill climb in life. It’s not to say that hardship and poverty can’t be overcome. But growing up in poverty essentially sets the starting line 50 yards back and expects you to make up the difference by running faster than even the fastest racers.
The lost human potential costs us all dearly. Researchers estimate that childhood poverty costs the economy about $1 trillion per year, or the equivalent of nearly 5 percent of gross domestic product (GDP), not to mention the clipped ambitions and dreams of a child.
So what can be done?
Combining Business Acumen with Public Health
As a nation we’ve created many policies programs to prop up low-income families and give them a chance, but most services and policies are “a little bit here, a little bit there”—and most are designed purposely to dissuade “dependence.”
The programs also come with a labyrinth of red tape and sharp edges. Parents can’t use food stamps to pay the electric bill, for example, and if they earn even a little bit extra money, they risk losing other public benefits. And contrary to most perceptions, many low-income mothers are working. Fifty-eight percent of working families headed by single mothers are in poverty. It’s just that when work no longer pays, paydays aren’t enough.
Beyond government programs, smart people are doing great work helping families. But none of the efforts are done at scale. Philanthropy supports a test run of a novel program, but it doesn’t get off the ground after the funding ends. A few bold initiatives like the Nurse-Family Partnership home visiting program have proved highly effective over the long-term, but because of how they’re designed, they cost far too much per user to be realistic on a broad scale.
That’s where business can come in.
Business is expert at providing products and services to large groups of people at increasingly lower costs. They’d be out of business if they couldn’t manage that. But it’s not always easy, and there’s a lot of trial and error along the way.
Think of it this way: A person can make omelets for her family on a weekend morning. She can even make omelets for her neighbors with a few more eggs and skillets. But making omelets for the entire town? That’s not possible without serious upgrades to the equipment and supplies. And once those upgrades happen, it’s a different ballgame. That’s the trick in going to scale.
The idea we at the Family Health Project want to take to scale is simple. Give mothers $400 every month so they can invest it in their children. Our Family Health Project got underway this month to do just that—become a cost-effective, scalable intervention that combines business acumen with public health goals to knock out child poverty.
Helping at a Sustainable Scale
We engaged four groups that make scale possible.
1. Referrals: Federally Qualified Health Centers refer women to the program. There are approximately 1,400 FQHCs operating almost 13,000 service delivery sites in every U.S. state. They serve more than 30 million patients.
2. Partnerships: A multiservice agency like Wellspring House, connects the women to a debit card provider to get the money to the mothers.
3. Support: Ongoing support happens through a social service agency to ensure the mothers get what they need. Agencies are in every city and county in the country.
4. Funding: Donors and philanthropy, or yet to be determined alternatives. To keep the money focused on the families, overhead is low—a small staff to handle marketing and oversight. Fully 90 percent of the money raised will go to participants.
The reach? Potentially millions. At pennies on the dollar. The return? A generation at the same starting line.
Some worry that low-income families will fritter away the money on “bad” choices. But the research shows that when we give parents cash, they don’t waste it. A pilot program in Stockton, California, that gave low-income mothers $500 a month showed they used the money to buy groceries, pay their utilities and fix their car. Less than 1 percent spent the money on liquor or cigarettes.
And work actually increased because they now had more time to look for a better job and an economic cushion that allowed them to take more risks. (Read more about the Stockton results here.)
Back in 1994, a program in Milwaukee called New Hope found that the cash stipend along with a set of critical supports was a lifeline for low-income mothers, and they spent it well. The results were that their children—boys especially—did better in school, had higher aspirations for college, and had fewer behavior problems.
Why Money Matters to Child Health
Why does money make such a difference? It’s simple: when parents have enough money to hire a tutor or take the family on a vacation, when they have enough money to stay put in a decent house in a decent neighborhood, or to buy the tennis shoes so the gangs can’t use shoes as a lure to join—life normalizes. Kids get the extra boost that middle- and upper-class families take for granted, and that investment, tiny as it is, pays off enormously down the road.
Nobel laureate James Heckman crunched the numbers and shows that every $1 invested in early childhood—in this case in high-quality early education–delivers $6 in return, or a 13 percent annual return on investment, compounding over time.
On top of that, when you alleviate the stress of poverty, parents have more mental bandwidth to plan and take steps to get a better job instead of just grabbing anything that comes along, as the Stockton results showed. They have more bandwidth to parent without snapping, to be present when they can stop the side gigs that help them make ends meet. They become healthier and happier, and as research amply shows, kids benefit.
So the solution seems equally simple: give low-income moms money—not an equivalent of cash such as a subsidy or tax rebate—but $400 every month. Money to spend as they need, in the local economy, just like everyone else.
As a result, kids will benefit. And because kids benefit, society benefits. We cannot lose another generation to poverty as we tinker around the edges with solutions that wrap people in red tape or simply cannot reach enough to make a true difference.
The child poverty rate has been stuck at about 15 percent since 1980, tracking up and down with economic booms and busts. The US is also the only advanced nation in the world that does not provide a family benefit like this, and it shows. It’s time to change that.
Join us as we give parents the extra bit of money that restores dignity and helps children thrive.