A Poverty Program That Works

Mauricio Lim Miller was all too familiar with poverty’s merciless persistence.

His mother immigrated to the United States from Mexico in 1954 with only a third-grade education; she used all of her ingenuity to make ends meet and ensure a better life for her children. Although Miller managed to graduate from college, his sister got pregnant at 16. A generation later, his nieces and nephews were also struggling.

Miller spent his career in nonprofits trying to help families like his own. Although the antipoverty programs he led for two decades in California were widely lauded (he sat in President Clinton’s box at the 1999 State of the Union address), Miller was certain they weren’t working. The same people came into his office year after year. Down the line, he had the disappointment of getting to know their children.

In 2000, Jerry Brown, then the mayor of Oakland, presented Miller with an opportunity. Livid at the millions of dollars flowing into youth programs in Oakland, only to employ an army of case managers and show few results—“poverty pimping,” Brown called it—the mayor asked Miller what he would do if money, resources, and regulations were no object.

Miller’s answer is what became the Family Independence Initiative.

State and federal government programs have spent billions of dollars and employed a vast bureaucracy to do battle against various social ills, with mixed success. NationalJournal chose FII as our winner in the arena of disrupting government because it fundamentally rethinks how to tackle the stubborn challenge of entrenched, cyclical poverty, in contrast with most public-assistance programs. The Family Independence Initiative rewards initiative instead of need, hands the reins to families themselves, and leverages the power of social networks. Miller stands as a leader among the social entrepreneurs “disrupting” government by finding new streamlined means to attack ingrained dysfunction.

Miller’s fresh approach began with two insights after his encounter with Brown.

One was that social networks, particularly in minority groups, had been lifting families out of poverty throughout America’s history. Barber shops in Harlem thrived when African-Americans taught each other the trade and helped their friends and family open new businesses. Cambodian refugees came to dominate independent doughnut chains in California in much the same way.

Miller’s second insight was that if given the resources, his mother would know what to do.

“My mother figured out how to get me out. Most mothers and fathers would know how to get out,” Miller says. “So I decided I would make the resources available to these families if they would show me what they would do.”

Miller initially recruited families he had worked with in social services, who then recruited their friends, making 27 households that organically sorted into four groups.

He asked only that the groups meet monthly to set goals for improving their lot and to talk about their progress. He gave each family a laptop with data-tracking software to document the actions they took to meet those goals. Quarterly, they received small cash payments, capped at $600, for completing their planned actions—everything from making their credit-card payments to helping their children get better grades to referring friends for jobs. FII’s two staff members were there to audit the families’ reporting and sit in on meetings, but were otherwise banned from interfering.

The results after two years were astounding: The families increased their incomes by 27 percent on average. Forty percent bought homes within the first three years. FII expanded to include 86 families in Oakland, San Francisco, and Oahu, Hawaii, and the results continued to hold up. The 450 families currently enrolled in the Bay Area and in Boston are showing similar outcomes.

“There are lots of good reasons that we’ve created the kind of poverty programs we have, but we have gotten ourselves into a situation where the cycle of poverty isn’t being broken, despite high participation,” said Kim Syman, a managing partner of New Profit, a national venture-philanthropy fund that has given grants to FII. “This has big implications for policy and for the way we look at people in poverty. There are hundreds and thousands of families that can take their destiny into their own hands with a little bit of support.”

Miller borders on maniacal in enforcing the families’ autonomy. Over the years, he has fired four FII staff members for meddling too much. Once, his employees almost staged a coup when he would not allow them to step in when a predatory lender was trying to sell a home to a Salvadoran family. Miller won the fight, and the family figured out how to refinance on its own.

FII postulates that the families have to make their own mistakes. When they’re successful, they serve as role models for others in the group, who then gain the confidence to take the same steps—a phenomenon that has happened on its own in communities for generations. “We’re not coming up with anything new,” Miller says. “We’re putting something very old in a modern context.”

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