Helping at-risk people, before they lose everythingAn ounce of prevention is worth a pound of cure
Millions of Americans cannot afford a $400 emergency expense. Millions more live paycheck-to-paycheck. These are good, hard-working people. They pay their taxes, keep up on their bills, and do everything right - but at the end of the month, they're lucky if they have a positive balance in their bank account.
Then, one day, their kid breaks a leg. They get a parking ticket. Maybe their car breaks down. Whatever happens - that's it. That's when they've fallen over The Precipice, into poverty or homelessness, all over a few hundred dollars.
A few hundred dollars might not sound like a lot in the grand scheme of things, but for nearly half of Americans, it can mean that they don't make rent that month, or they can't afford to fix their car, or any number of life-changing crises. When what should be a minor hurdle occurs, more than half of Americans are at risk of losing their job, their home; everything.
Maybe they're "fortunate" enough to have credit cards or a payday loan service available to them... but interest and fees are just another expense that they already can't afford. These costs compound over time. They may use one line of credit to pay off another, until the fees are finally too much, and they begin to miss payments. Then it's only a matter of time. Say for example, that they use a payday loan this paycheck. Their next paycheck goes to paying it off, so they'll need another... And another... And if they could just barely get by before, they certainly can't afford the 390% - 780% APR that's charged for payday loans, so eventually they need to borrow more than they can pay back, just to pay off the previous loan plus fees and interest.
These good, hard-working, honest people, will become our nation's homeless population - unless we do something about it.
This isn't because they're lazy, or because they're dumb. It's not because they're bad people. They were simply unlucky. These people - the foundation upon which our society rests - need your help.
"The Precipice" is a term we use to describe the situation they find themselves in, just after something goes wrong and they're hit with an unexpected bill, but just before they fall over the edge and lose everything. This is the critical moment, in which a small amount of assistance can save not only a family's future, but your tax dollars, too! Just imagine how much of our taxpayer-dollars, not to mention dignity and livelihood, could be saved if homelessness could be prevented rather than forcing people to rely on social programs for food and shelter while also trying to get back on their feet. The Precipice Foundation (a 501(c)(3) non-profit charity) steps in to help at this critical moment.
How we help
The goal of The Precipice Foundation is to step in at the critical moment, and help these families and individuals make their way back from the financial edge. Here are some of the options we explore in each case:
- We explore any options that may be available to the recipient that don't cost donor money directly.
- For example, we might have an expert volunteer help them file for Social Security Disability and work their way through that bureaucracy, if their situation warrants it. SSI is a far, far less costly option from a taxpayer perspective, than homelessness.
- We may also help them explore options like Food Stamps or food banks, to help offset their budget in their favor by reducing their grocery costs to get them over the precipice, or public health options for them or their children to help cover medical costs if that suits their situation.
- We may work with the recipient's debtors and utility providers
- We try to ensure that they are able to keep going without losing their heat in the winter, while we help them through this crisis.
- We evaluate their existing debts, and help them explore whether debt consolidation makes sense to reduce their monthly financial burden. If so, we connect them with registered non-profit debt consolidation services to ensure that they're not taken advantage of, and help them get started.
- We help them explore options for making a little extra money on the side.
- We might help them find a place to donate plasma, or other means by which they themselves can make some extra money to weather the storm
- This does not include predatory money-making schemes, multi-level marketing, or other tools which often do more harm than good, such as payday-loans.
- If connecting the recipient with extant social programs and resources doesn't make ends meet, we may then step in and pay all, or a portion of whatever bill it is that's thrown their finances into chaos, and threatens to push them over the precipice.
- The goal in doing so, would be to give them the financial breathing-room to be able to start saving money for future emergencies, and avoid finding themselves in this situation again.
- We don't stop once the immediate crisis is over. We connect them with volunteer or non-profit financial advisors to help them build a meaningful, easy-to-follow budget, and see where they might be able to trim some fat from their expenses, and start saving a little money for a future emergency.
- We can also connect them with training programs and recruitment specialists to help them advance in their current job, or find a new one that pays better!
- Our goal is to make it so that once they're pulled back from the precipice, they are loaded up with the tools and training necessary to keep from risking going over again.
Consider the cost of bringing someone out of poverty or homelessness once they've already gone over the precipice, and compare that with the cost of keeping them from going over in the first place! By investing in our neighbors before they've gone over the precipice, we can make much more effective use of your donation!
You may be surprised at just how little it can cost to help a family find their feet in a financial crisis. The fact is that 4 out of 5 Americans live paycheck-to-paycheck, and 44% of Americans cannot afford a $400 emergency expense. For these 44%, a few hundred dollars can be the difference between stability, and homelessness.
While it's impossible to ascribe a monetary value a person's life, livelihood, or dignity, homelessness has a quantifiable monetary cost to society, and to individual taxpayers. Once an individual becomes homeless, they can cost taxpayers between $30,000 and $36,000 each year. Overall, homelessness costs American taxpayers almost $11 billion each year. Meanwhile, the cost to prevent homelessness can be a few hundred dollars; and in some cases even less, as assistance can come in the form of training, budgeting tools and assistance, and connecting people on the precipice with existing opportunities to make a better, more stable life for themselves.
Although it's painful to acknowledge, we recognize that we can't solve the problem of homelessness over-night, and we can't help every single person who needs it. As such, for every unique case we work on, we try to calculate the amount of "net good-per-dollar" that we can do. This kind of moral calculus can be distasteful, but we do our best to allocate resources where they'll do the most good. We feel as though we owe it to our donors, to ensure that every dollar they contribute does as much good as it possibly can.
After discussing a potential recipient's situation in detail, we try to determine things like:
- How much would it cost to resolve the current situation for this family or individual?
- Are there ways that we can help without directly spending money?
- What are the outcomes if we are able to help, versus if we aren't?
- Will they lose everything, or will they merely be inconvenienced? - The greater the downside that we're able to prevent, the more "net good" every dollar able to do.
- Would this be a stop-gap measure? How likely is the recipient to find themselves in this situation again in the near future?
- Can they trim down their budget, get a raise, begin training for a better-paying job, or start saving an emergency fund? If we're only putting off the inevitable, then our actions would be less impactful, and those resources may do more good for someone else.
We consider these and many other factors, when determining who we can help, and how best to allocate our resources.