What do the Coronavirus pandemic and the stock market plunge mean for social enterprises and impact investors? Not Only for Profit is talking to a variety of key players for their insights.
First up is Jimmy Chen, the founder of 28-employee, New York City-based Propel. Why Chen? Low-income workers employed in service industries are likely to be among the hardest hit economically by this crisis and that’s the population his company targets. Started in 2014, Propel’s app helps food stamp recipients check their balance using their Electronic Benefit Transfer (EBT) payment card, save money through access to grocery store discount coupons and apply for jobs. More than 2 million low-income Americans use the app each month, according to Chen, who figures that his users have saved over $30 million thanks to the coupons they tapped through the app.
How is the crisis affecting your customers?
Our belief is low-income Americans are the most vulnerable and the first to feel the impact of things like this. They don’t have a buffer. When they have to take a week off from work because, say, the children are home, they lack the resources to absorb the shock. It’s challenging to afford stocking up on canned food, for one example. Many people take for granted they have the ability to go to the store and purchase soap. For many of our users, they wish they could participate in those precautionary measures, but they don’t have the financial ability.
We recently surveyed our users to see what their needs are in this crisis. Overwhelmingly, the top one is more money to pay for food. That’s been true outside of this pandemic also. For a lot of our users, putting food on the table and making ends meet—food stamps are insufficient to meet those needs. This is a monthly challenge, now exacerbated by the fact that our users have to stock up and spend more at one time. We found that 30% of our users have functionally spent all of their benefits for the month. The average for this time of the month usually is 20%. We expect that to get worse in the next few days.
The combination of closing of public schools and employers giving fewer shifts and work opportunities—it will put our users in a really tough spot. Our users are disproportionately employed in industries like retail and food service and those are the areas that are going to be hard hit.