We are proud and honored to be featured in Hawaii Business Magazine’s recent article, “Living Paycheck to Paycheck Can Be Scary”: How Nonprofits Help Hawai‘i’s Struggling Middle Class Gain Financial Stability” Please see excerpts from the story below.
What Does ALICE Stand For?
In 2018, Aloha United Way introduced a way for us to talk about and measure Hawai‘i’s working poor. ALICE, which stands for asset limited, income constrained
and employed, provides a common framework for identifying and quantifying the people in our state who are above the federal poverty line and don’t qualify for many government assistance programs, yet can’t afford basic necessities to remain stable and self-sufficient. In the last five years, we have seen this segment grow from 42% to 44% of the state’s population.
ALICE Stands for Entrepreneurs
Next to the earrings she sells, Mattie Mae Larson likes to display plastic packaging that would otherwise have gone in the trash, watching people’s eyes go wide when they make the connection. All of her products, which include jewelry, beach totes, bookmarks, keychains, pouches and wallets, are made from plastic material that usually becomes landfill.
Growing up on Hawai‘i Island, Larson was surrounded by entrepreneurs. Her father owned his own heavy-equipment business, her uncle was an auto mechanic and many people in her community worked at the farmers market.
Even though her family struggled from paycheck to paycheck, she felt confident that her entrepreneurial drive and good credit scores were enough to start a business.
But then she discovered how banks actually work, “If you go there and ask for a loan without a ton of money and a 10-year history, they don’t care if you have 20 references and a great job history. Meanwhile, my peers and colleagues who came from rich families were given absurd amounts of loans for their businesses,” says Larson.
Entrepreneurs like Larson, who have few-to-no resources of their own, are typically rejected for loans because they are considered too high risk and low margin to be viable investments, says Patti Chang, CEO of Feed The Hunger Fund. Recognizing this, Chang saw an opportunity to provide loans as well as technical assistance – including financial literacy, business planning guidance and credit counseling – to low-income entrepreneurs.
“We are the first responder for many of these folks who need loans. They will get rejected from so many other sources. When you look at the high cost of living, some of our folks are very poor and below ALICE, especially farmers,” Chang says.
With two loans from Feed The Hunger Fund, Larson was able to sign her first commercial lease, buy equipment and hire three employees. While she still sees herself on the precipice, she is proud that the business makes more money every year and that she has been able to provide one of her employees with full health care.
“They were the first and only ones that took a chance on us. And they didn’t just give us funds, but helped navigate us to make the right decisions and were there whenever we needed help,” says Larson.
To read the full feature, please visit Hawaii Business Magazine: “Living Paycheck to Paycheck Can Be Scary”: How Nonprofits Help Hawai‘i’s Struggling Middle Class Gain Financial Stability.