Startup helps feed bank accounts of food stamp recipients

The tech startup Propel began by helping people manage their SNAP benefits, also known as food stamps, through an app called Fresh EBT. It lets people digitally check food stamp balances. Now Propel is partnering with the nonprofit GiveDirectly to send its users — who all receive SNAP benefits — cash. Propel will begin by offering the money to households in areas hit especially hard by COVID-19, but the goal is to crowdsource enough money to give $1,000 to all 2 million people who use the Fresh EBT app.

I spoke with Jimmy Chen, the CEO of Propel. The following is an edited transcript of our conversation.

Jimmy Chen: I think from our perspective, this situation is pretty dire for a lot of low-income Americans, and the solution is also quite simple: to provide them cash. It is not a long-term solution, it’s not a systemic fix, but it is a way to help people navigate through the impossible choices of “Do I buy food for my kids, or do I buy soap for my home?” One of the roles that we can play is, if we can just help as many people as possible to get this extra cash infusion, that feels like a meaningful contribution.

Molly Wood: Each person that is currently on your platform?

Chen: Yeah, that’s right. Our role in this partnership is helping to identify and target people who are currently receiving these food stamp benefits and are really people that are in strong financial need. For somebody who uses our app, they’ll open up the app and they’ll see a banner on it that says, “The Propel team has partnered with the GiveDirectly team to help you get this one-time transfer.” They would sign up through our app and then the GiveDirectly folks would then process the payment.

Wood: How is your particular platform enabling this? What you were initially set up for was to make this very analog SNAP process more digital and more digitally available. How are you leveraging those tools to get people this money as quickly as possible?

Chen: The original reason why we built the Fresh EBT app was that we talked to people who got their food stamp benefits on [Electronic Benefits Transfer] cards, and heard from them that every time they went grocery shopping, they had to call the 1-800 number on the back of their EBT card so they could check their balance. We built what is essentially the mobile banking app for the EBT card, in the same way that somebody who uses a credit card or a bank account should be able to have a free mobile app that lets them check the balance and see their transactions. We do the same thing for the EBT card and the food stamp program, really trying to modernize the user experience of it. What we actually realized we had built over the years was, we really see the need to manage your EBT benefits as a hook. It’s the reason why people will seek us out. It’s the reason why the average person who uses Fresh EBT opens the app about 12 times each week. It’s the reason why people engage, but as people engage, we can do more. We can do a lot more than just help people know how much they have left on their card, we can also help them in good times to find different jobs that are hiring or to apply for all the different social services programs that they might qualify for. In this particular time, we have shifted that platform to be about how we help you understand what the resources are that are available to you now. I think we are fortunate that there are so many different organizations between the public sector and the private sector that have sprung up and have really tried to lend assistance to low-income people, to people that are in financial need. What we think we can do is be a distribution platform. We can be the platform that helps people that are in financial need to identify: “What are the full set of opportunities that are available to help me to make financial ends meet?”

Wood: There are also still a lot of existing barriers for people who use SNAP benefits, even the ones who use your app. For example, they can’t get groceries delivered via Instacart. Do you look at this system and say, “There are still more technological changes we would love to apply to this to make it work better for people”?

Chen: The way that I approach a lot of these problems, just from a first principles perspective, is that we don’t have to reinvent the entire system from scratch. In many cases, the EBT card and the SNAP program is patterned after how the private sector works, in a way that I think is actually really positive. Part of the reason why we transitioned from paper food stamps onto the EBT card was this idea of most people buying their groceries using a card, so why not provide that same piece of dignity to people who are using food stamps as well? I think the challenge, though, is that where that was the frontier, maybe in the early 2000s, the frontier now has moved. Now, the frontier of what it means to have a modern experience going grocery shopping is about having software. It’s about having the software so that when you go grocery shopping in the store, you know how much you can buy. It’s about having the experience of being able to have the convenience, really, of purchasing groceries at home, if that’s what you want. I think the current crisis adds another layer onto that, which is that for people who are purchasing groceries with their cash or credit cards, you’ve got this option to buy your groceries and have them brought to your front door. Traditionally, people who have EBT cards haven’t had that option.

Wood: Can you tell me what is the mechanism for people actually receiving this money, and when do you expect to start disbursing?

Chen: The money is distributed through the GiveDirectly team’s payment platform. The way that it works is that when you receive this notification that you qualify for this $1,000 transfer, you will then have the option to direct deposit that into a bank account. You can also choose to have a prepaid card that is sent in the mail to you. As an alternative, you can choose a MoneyGram code, or you can choose a paper check mailed. We’re able to go very quickly from a gift through the website, into cash into someone’s hand, usually within a week.

Wood: Is everybody who’s on your program automatically eligible?

Chen: Everyone who’s using Fresh EBT and currently receiving SNAP benefits definitely has a lot of financial need. We also have the ability to subset our user base. For example, if a funder is really interested in giving to people that are in financial need in the New York City area, we could certainly do that. Because we’re a mobile app, we can target based on where someone lives and where someone is using the app, so that’s an easy slice for us.

Wood: Generally, how do you feel about this being your job, a for-profit company partnered with a nonprofit, versus the government?

Chen: I don’t think this is the kind of problem that can be solved by any one organization or any one institution. I think that historically, for-profit companies, and companies in particular in the technology sector, haven’t done all that they can to actually make a real impact on social problems like this. I think by and large, the tech sector has lagged behind in terms of thinking about social problems in particular around poverty. I think a lot of that comes from just a lack of context and a lack of understanding about how those problems work and what are the daily experiences of the 40 million Americans who get food stamps. I think that at Propel, we’re a company that’s always worked on safety net services, and the safety net, in an era of COVID-19, is top of mind for a ton of people and is growing, and our mission is incredibly important, of helping people to navigate these safety net services so that they can get back on their feet financially. We very much do see it as a responsibility of ours to charge headfirst and do whatever is in our power to help our users to access these funds.

Here’s what else we’re watching

YouTube announced a new tool that makes it easy for small businesses to quickly create videos. The idea is that they can pop up messaging about, for example, new hours, virtual services, or delivery options with some nice-looking templates and fonts and a music library.

Apple yesterday launched a Mobility Trends Report using anonymized phone data to show how well people have been social distancing in various regions. Google launched a similar tool earlier this month. Both Google and Apple held a Q&A call with reporters to try to answer questions about their new partnership to use Bluetooth for contact tracing to try to track people who have been exposed to coronavirus. Many people have pointed out that this tool is similar to the one developed by MIT. Personally, I choose the one that isn’t made by a private company. That’s if I get to choose one before they make me, which — they’re gonna make us eventually. You just wait.

Amazon fired two more employees who were publicly pushing for change at the company. Both employees had been advocating for safer conditions at Amazon’s warehouses, including offering to match donations for those workers. The two fired women were also part of the group Amazon Employees for Climate Justice, which has advocated for more action on climate change. Amazon confirmed that it fired another warehouse worker on Tuesday for organizing in support of safer conditions.

They know we can see them, right?

In better example setting, Reddit said on Monday that it will start disclosing its political advertisers, how much they spend, and more importantly, how they target users. It can be done.