Poor people pay more than those with resources for the most basic things. This is absurd. Their food is more expensive since poor neighborhoods often lack grocery stores. Home furnishings get paid for on credit - at exorbitant rates. They often rely on check cashing services and payday loan services instead of banks - so even their paychecks get slammed by interest rates.
Why don't community foundations or other locally-focused foundations address these issues? Grants to nonprofits aren't going to solve these problems. Program-related investments in local communities might make some impact. But why not use philanthropic capital to back a system of loans and credit that can actually help people get out of debt and have access to some of the credit and financial tools that are key to building wealth?
2 comments:
There's money to be made from the bottom of the pyramid, across the world. The solutions may be found in the intersection of entrepreneurial business ideas and philanthropic capital. U.S philanthropy would be wise to make an effort to address our own poverty through avenues that would be self-sustaining.
Hi, Lucy. Good to see you're posting again. Locally-focused foundations address these issues on many fronts. They support financial literacy training for low-income people. These trainings teach people to budget, use banks, build their savings, avoid check cashing services, etc. These foundations also support small business and other kinds of development in low-income neighborhoods so that poor people don't have to travel far to find a good grocery store and other essential services. And of course they support advocacy organizations that fight to preserve the safety net for the poorest citizens, establish living wage laws, etc.
How would a "system of loans" help people get out of debt? Sounds paradoxical.
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