Hunger in America - Community Economic Development

Understanding the Hunger Crisis in America

In the United States, a staggering 44 million individuals, including millions of children, rely on government and charitable organizations for their daily sustenance. The Federal Government allocates approximately $182 billion annually to nutritional assistance programs like SNAP and WIC. Despite this significant investment, there's a disconnect between the assistance provided and the needs of the community.

A key issue is the regulatory framework, which often restricts where and how these funds can be utilized. For instance, non-profit entities like NeighborImpact Kitchens or Church Family Kitchens, which serve free meals to the needy, are unable to accept food vouchers. This limitation not only affects the aid to recipients but also impacts local economies, as funds are often channeled towards national retailers offering highly processed foods.

Companies and corporations have usually ignored this segment of the world’s population as a potential opportunity for generating profits, choosing to focus on the wealthy and the middle classes.

In the wake of the political and social unrest that has gripped many parts of the economy since the 2008 global financial crisis, attention towards addressing issues of poverty and inequality have grown in importance and urgency. As a result, working with underprivileged and impoverished communities has become more and more of a priority to NGO’s, governments, and private sector entities, not out of philanthropy or charitable giving, but as a necessary and urgent matter to create and maintain meaningful stability and prosperity throughout the country. Many see it not just as a socio-economic issue, but an issue of security as well.

Professor Alan Fowler, an honorary professor at Wits Business School of the University of the Witwatersrand, Johannesburg: “Enduring poverty is a politically destabilizing economic drain. It can be the seed bed for destabilizing social action, often inviting repressive responses from regimes in power which can undermine creativity and innovation as engines of economic improvement that reach the poorest and most vulnerable.”

The Opportunity: Base of the Pyramid (BoP) Economic Theory (link)

BoP Fundamentals: This approach views the economically disenfranchised as potential entrepreneurs and value-demanding consumers, rather than passive aid recipients. It seeks to alleviate poverty through market development and co-creating business opportunities that are mutually beneficial.

BoP thinking first emerged around 20 years ago with the concept of business being catered to the world’s most impoverished. It was utilized in the very traditional market economy view of making a profit from the BoP. Most of these initiatives were top-bottom, couldn’t be scaled up, and some just failed.

This model then evolved into BoP 2.0 which entailed businesses partnering with NGOs to achieve economic development. According to Fowler “2.0 was an evolution because business found that it wasn’t competent at dealing with poor people. And therefore, they will work in partnerships with non-profits and others who know something about the bottom of the pyramid and have been working with the base of the pyramid for years. So it was much more partnership where businesses would support non-profits to actually engage in economic ways with base.”

BoP 2.0 brought its own set of problems due to the disconnect between businesses and the communities they were supposedly benefiting. “Because of this partnership model, businesses themselves don’t learn about working with the base of the pyramid,” Fowler said.

BoP concepts then developed to become more participatory, giving birth to the 3.0 model. This model stipulates that businesses should partner with the base of the pyramid to collaboratively create and produce economic gains for all the parties involved. According to Fowler, 3.0 is about “businesses working directly with the base but from [the] perspective of co-production, trying to capitalize on what assets the base of the pyramid already has. Not looking at the base of the pyramid from the perspective of its deficits.”

Innovation and Entrepreneurship:?

BoP highlights the role of innovation and entrepreneurial spirit in addressing the needs of the underprivileged. By tapping into local talent and resources, it fosters opportunities for small businesses, local farmers, and non-profits. There's vast potential in BoP markets. By engaging with these communities, businesses can explore new market avenues, support local economies, and provide better quality, nutritious food options.

BoP strategies strengthen community bonds. They support traditional values and social order by integrating business initiatives with community development. This model also aligns with the ethical and moral imperative to uplift the poorest segments of society, emphasizing social responsibility.

Real-World Successes and Solutions

Case Studies: Numerous examples demonstrate how BoP initiatives have led to profitable business models with significant social impacts. These range from local agriculture initiatives to innovative food processing startups.

One such program is the Double Up Food Bucks / Michigan, which uses SNAP benefits in combination with local donations to create a Bridge Card funding food purchases from selected vendors who prioritize local sourcing. Changing the regulatory constraints and allowing this card to be used for the purchase of cooked meals from USDA certified non-profit kitchens has the potential to significantly impact local economies.?

Call to Action: Rethinking Assistance Programs

1. Regulatory Reform: Minor changes in the regulations governing the redemption of food vouchers and assistance programs can unlock the potential of local markets.
2. Local Empowerment: Encouraging the use of vouchers in local non-profits, and small businesses can revitalize communities and provide healthier food options.
3. Continuous Engagement: Ongoing dialogue and learning about BoP models are essential. Adapting to local needs and continuously innovating can foster sustainable growth.

Revitalizing our approach to nutritional assistance through the BoP economic theory offers a dual benefit: It addresses the hunger crisis more effectively and stimulates local economies. This strategy not only feeds the hungry but also sows the seeds of community growth, innovation, and shared prosperity.

Join us in reimagining community economic development and tackling hunger in America.