Propel, a Brooklyn, NY, startup that offers an app to manage SNAP, scrambled as soon as it heard that the government would be handing out February SNAP benefits early due to the shutdown. Early issuance of SNAP would create a long gap between payments, it realized, and it hoped to ease the pain of extra-tight budgets among its clients.
Propel already knew that most of its clients spend about 80% of their benefit within nine days of receiving it. Data from January 2019 indicated that one-third of February SNAP benefits had already been spent before the month even began, paving the way for an agonizingly long set of weeks for many recipients until the March payment kicked in.
On the positive side, Propel also knew from its work in behavioral economics that people could use mental tricks to make their money go further. Its solution to the SNAP gap, which it released on February 1, lets users “hide” their February benefits on the app, electing the amount they want to tuck away and for how long. Propel clearly communicates that the full benefit amount is always available and can be accessed at any time. About 40,000 of Propel’s Fresh EBT users opted into the feature, hiding away more than $10 million, said Stacy Taylor, head of social innovation.
Propel’s SNAP-gap workaround has its roots in an experiment it conducted with the Common Cents Lab of Duke University in 2017. In the test, Propel found that SNAP recipients who viewed their benefits in weekly versus monthly amounts were able to stretch their benefits by six extra meals a month. The shutdown gave Propel a good reason to put a similar mental model into action to address the SNAP gap. “It was an all-hands-on-deck, furious effort to get it out on time,” Taylor noted.
The “hide-it-away” feature is an add-on to Propel’s two-year-old Fresh EBT app, which seeks to make America’s safety net more user-friendly by letting users easily look up their SNAP balances, find out which grocery stores and farmers markets accept SNAP, and get coupons delivered right to their phones. About two million people use the app every month.
Propel is not counting on technology alone to ease the burden of the SNAP gap. It also started a giving campaign to raise an initial $150,000, which it will use to deliver meals to vulnerable families from Full Cart, a program of Feeding Children Everywhere. Using the Fresh EBT app, it will be able to identify families with the lowest SNAP balances and the longest gap between benefits and invite them to participate. Toward the end of the month, from February 20 to March 1, Propel will deliver one-time shipments of Full Cart’s free groceries to the selected SNAP participants.
Despite the benefits of its two-pronged approach, the technology firm recognizes that budgeting tools and emergency fund-raising can only do so much. As Taylor noted in a follow-up email, “The safety net needs to be stronger.”
