Battling Poverty via Family Support and Economic Incentives

  • Prosperity
  • 2001

Mauricio Miller’s bio states that more than two decades of working in social services left him “disenchanted with the social sector’s approach to fighting poverty” and wanting to try something new—encouraging low-income households to rely on families and neighbors and good financial habits to “create security…rather than assuring jobs and stability to the social workers and government bureaucrats who seek to help them.”

The nonprofit Miller set up, the Family Independence Initiative, did detailed research on the successes of immigrants who thrived after arriving very poor. It found they used mutual family support and disciplined saving to move into the middle class. Miller’s group then created models to help other poor people learn from these successes. Instead of dispatching professionals from the helping occupations to

educate struggling individuals, the Family Independence Initiative encourages the poor to connect themselves to relatives and neighbors and establish new daily disciplines learned from them, including saving money and focusing on stronger family bonds.

The initiative provides a series of small cash incentive awards to reinforce constructive behavior—making payments to families of several hundred dollars when they achieve goals like raising a child’s grades, completing a skills-training class, or saving money. Over two years, families following this course increased their savings by 240 percent on average, increased their earnings by 23 percent, and created or expanded 33 percent more small businesses. Almost 80 percent of children reported an improvement in grades, and families reduced their dependence on government subsidies, improved their health, and otherwise made progress. The success of this unusual anti-poverty model has attracted several million dollars of philanthropic support in recent years from donors like the Boston, Kresge, Levi Strauss, MacArthur, and Eos foundations.

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