Back to The U.S. government’s response to the economic disruption caused by COVID-19 showed how benefits systems can serve as a crucial safety net for individuals, households, and communities. For example, the expanded child tax credit reduced monthly child poverty by close to 30%. We found further evidence of the importance of benefits systems in data from the Financial Health Pulse™ 2021 U.S. Trends Report, which pinpoints that people who applied for and received unemployment benefits or debt relief were more likely to be able to pay their bills on time compared with individuals who applied for benefits or relief but did not receive either one.
The national eviction moratorium has ended and the federal student loan repayment suspension, while recently extended through August 2022, remains uncertain. These are only two examples of the many forms of financial assistance and debt relief programs that have ceased or whose end date is in question. As these questions linger, we must proactively create effective and efficient ways to connect individuals and households to benefits systems. Individuals navigating these complex benefits systems often find that they are difficult to access and use, a fact that prevents many Americans from taking advantage of vital safety net programs.
At the same time, benefits provided through the workplace – such as retirement and emergency savings programs, financial coaching, and more – have become more relevant in today’s tight labor market and amid an uptick in unionization efforts. We know that workplace and public benefits systems can complement each other to promote financial health.
Over the last two years, the Financial Solutions Lab Exchange has supported nonprofit-fintech partnerships through focused Challenges and grant offerings, serving low- to moderate-income individuals, Black and Latinx communities, and other underserved populations striving for financial health. This year, the Exchange Challenge will focus on solutions that help individuals and families access public or private benefits.
Why Focus on the Benefits Space?
The majority (66%) of people in the United States are not considered Financially Healthy, according to the Financial Health Pulse 2021 U.S. Trends Report. Along with the Financial Solutions Lab Accelerator, which launched a benefits-focused challenge in November 2021, the Exchange Challenge is interested in the ways in which benefits, whether public or private, can be better leveraged to promote financial health for all.
Consider that:
- Millions of American adults who earn low wages rely on federal programs to meet basic needs, such as Medicaid for healthcare and the Supplemental Nutrition Assistance Program (SNAP) for food.
- Access to stable, well-paying jobs with robust workplace benefits is rarer for Black workers than for White workers, which contributes to the racial wealth gap.
- Technology has a greater role to play in improving the experience of public benefits users, as indicated in President Biden’s recent executive order on Using Technology to Improve Customer Experience and Service Delivery for the American People.
How Nonprofit-Fintech Partnerships Can Improve Benefits Systems
While government actors and employers are critical to improving public and private benefits systems, we know that there is a role for the nonprofit and fintech sectors to play in better serving the individuals, families, and communities navigating benefits systems. One example is Providers by Propel – a fintech app that serves one-fourth of the over 20 million American households receiving SNAP benefits – which is helping these families keep track of their food stamps and other government benefits.
Across the country, nonprofits assist individuals with benefits screening and eligibility; fintechs can help individuals monitor their benefits and help practitioners match clients with the right benefits for them. Working together, nonprofits and fintechs can improve financial health outcomes for individuals navigating complex benefits systems, both public and private.
We welcome applications from nonprofit-fintech partnerships working on:
- Fintech distribution: A nonprofit integrates a fintech tool into its existing program to increase engagement and impact.
- Example: A nonprofit financial counseling organization partners with a fintech tool provider to help individuals determine eligibility and apply for public benefits.
- Nonprofit referral: A fintech integrates or refers customers to relevant nonprofit services.
- Example: A fintech serving individuals who receive public benefits partners with a nonprofit to offer financial coaching and career development resources.
- Systems enhancements: A nonprofit implements fintech systems or tools to enhance back-end systems or operational processes.
- Example: A nonprofit workforce development provider partners with a fintech company to integrate benefits screening into its client management systems.
- Insights and design: A fintech engages a nonprofit to receive design input into new products and features.
- Example: A fintech company that helps workers make the most of their employer-sponsored savings plans engages a nonprofit to design and test product improvements or new products that better meet the needs of the nonprofit’s users.
Learn More and Apply
The 2022 Exchange Challenge will award up to three $90,000 grants to nonprofit-fintech partnerships (including nonprofit Community Development Financial Institutions) addressing the finhealth needs of people navigating public or private benefits systems. Grantees will also receive technical assistance to support their project’s execution as well as a forum to actively engage with nonprofit and fintech peers in their cohort.
We are accepting applications through July 15, 2022, and will announce the next cohort of grantees in fall 2022.
- Want more information about the 2022 Exchange Challenge? Learn more.
- Ready to submit your application? Apply now.
- Want to talk through or get input on your application idea? Sign up for office hours with the Exchange team, or email us.
- Interested in reading about previous Exchange Challenge projects? Learn more.