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Outreach, Reviews

Modest Needs: Legitimate Help for Those in Need

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Legitimate Help for Those in Need

Getting a grant to help pay your bills from perfect strangers sounds too good to be true. Could having someone else handle your unexpected medical bill or car repair costs really be as easy as submitting an application that explains why, even though you’re employed and making money, you don’t have the cash to pay for your bill yourself? Could a charitable donation made online to a stranger really be put to its intended use and skimmed off the top by a bloated company?

With Modest Needs, it seems receiving help or donating to those in need is just that simple. The organization makes grants to people who genuinely need a helping hand during hard financial times. It ensures money from donors goes toward empowering those in need.

What Is Modest Needs?

Modest Needs, also known as modestneeds.org, is a nonprofit organization founded in 2002. The charity aims to provide financial assistance to low-income individuals and families, with the goal of preventing these people from slipping into poverty.

Everything began as the personal project of Nashville, Tennessee resident Keith Taylor. Taylor made his charitable work very personal; he saved part of his own salary each month to give away to those in need. After launching the site to connect with people who needed help – and people who wanted to financially contribute to others – the project snowballed.

Today, Modest Needs assists “low-income workers who are struggling to shoulder the burden of a short-term emergency expense.” The main type of assistance they provide is called a Self-Sufficiency Grant. These funds are given as grants, not loans, meaning the money does not need to be repaid by recipients.

Self-Sufficiency Grants are intended to help people who work and earn an income, but live just above the poverty level and are therefore unable to take advantage of any social assistance programs. These people may be just one paycheck away from financial disaster, and that’s where a grant can help.

Grants are generally made to people who are facing a financial emergency that they cannot afford, or who cannot afford to pay a monthly bill because of a legitimate extenuating circumstance.

How Grants Are Made

Modest Needs requires an application if you hope to receive one of their grants. Applicants must provide proof of income (to ensure they actually need financial assistance) and need to explain the crisis they’re facing that prompted them to ask for help. The organization advises setting aside a half hour to 45 minutes to complete the full application.

Some of the group’s other requirements include having at least one employed adult in the household. In addition, the main source of income for household must come from earnings via employment, child support payments, Veteran’s Benefits, or retirement income. The size of the grant depends on the applicant’s income.

Finally, applications that receive funding are required to write a thank you note to Modest Needs. Donors may opt in to receiving a copy of that note from applicants, as well.

By law, Modest Needs cannot grant funds for expenses including taxes, past-due child support, or fines and fees associated with civil or criminal offenses. As a matter of policy, the group will not provide grants for things like credit card debt or “luxury” goods or services.

If you’re interested in applying for a grant with Modest Needs, then you can find out more information here.

One Catch

Once an application goes live on the site, donors are then given the ability to vote on which grants should be funded. Donors get a vote by making a contribution to Modest Needs. A donor gets a vote (referred to as a point) for each dollar contributed. If you decided to donate $50, then you could put all 50 points towards one cause or spread them around. The points are reflected with a progress bar the following statement: “$ [total voted] has already been given to Modest Needs by donors who’ve recommended this application for funding.” 

However, there is actually one catch. A request needs to be fully funded in order for the recipient to get the money. Modest Needs does not provide partial payment on grants.

For example, Sally needs $1,200 to get her roof repaired but donors only received $800 by the due date, she would not receive the $800.

Information for Donors

Modest Needs is a registered 501(c)(3) (tax exempt) organization (Federal ID #47-0863430). Contribution you make, if you’re a U.S. donor, is tax deductible.

Note that when you do make a donation, you’re not directly and immediately funding the application you entered a dollar amount for. Your donation goes to Modest Needs itself, along with a recommendation of which application you want to see funded. The organization has the final say-so in what applicants receive grants.

Modest Needs requires an application be “fully funded” before executing any grants. If the application you recommended for funding does not reach 100%, your donation is returned to your account and you have the option to recommend (vote for) another applicant with the money you contributed.

Find more information out here.

Legitimate Help for Those in Need

Donors should be able to rest assured that they’re giving to legitimate causes when they fund an applicant on the platform, and donations are tax-deductible. There are no minimum contributions.

When it comes to the applicants on the website, Modest Needs screens individuals to make sure requests are real and legitimate. They also have staff that perform the necessary due diligence and research into each application. Grants are never made in cash; instead, payments are remitted directly to a vendor or creditor on behalf of the applicant.

Modest Needs is a registered nonprofit with the IRS and with the state of New York. Watchdog site Charity Navigator gives the organization a 3 out of 4 star rating and garnered high praise in reviews on GuideStar. The nonprofit also meets the standards set by Give.org.

You can view financial reports from 2005 to 2012, and you can request hardcopies of this information through the website as well. Finding information from frequently asked questions to mailing and email addresses is easy, and it seems the group strives for transparency.

Giving More than a Handout

With the proliferation of personal pleas for assistance on crowdfunding sites like GoFundMe, Modest Needs stands out as a refreshing alternative. Anyone can go on crowdfunding platforms and ask for handouts, with the onus of responsible giving placed on the general public. People asking for funding are under no obligation to use the cash in a particular way; there are no requirements for funded projects after they’ve received money.

Modest Needs, on the other hand, was started and designed as a charity and giving responsibly is ingrained in its stated missions. The organization specifically focuses on helping those who are working and just above poverty level – meaning they’re often making enough to disqualify them from government assistance programs, but making too little to handle a financial emergency.

Some current applications for grants include a Wisconsin woman who lives independently and maintains a job as a housekeeping and laundry attendant, and needs to repair her car* so she can continue commuting to work. Another is from an elderly vet who needs new tires on his car to drive safely through the Colorado winter, while a teacher in Texas needs help to pay an unexpected medical bill.

The requests range in size from large to small – one woman works two jobs to pay all her expenses, but cannot afford to repair her broken washing machine – but all are similar in the fact that they come from working individuals who can cover their regular monthly expenses, but live paycheck to paycheck and struggle to come up with funds for unexpected or emergency costs. You can browse other requests here.

Modest Needs uses donations to fund these types of grants so lower-income, employed individuals can continue on with their lives and avoid having one random, unexpected expense push them into a cycle of poverty that they cannot break.

*Kali Hawlk decided to personally donate to this cause after writing this review.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kali Hawlk
Kali Hawlk |

Kali Hawlk is a writer at MagnifyMoney. You can email Kali at Kali@magnifymoney.com

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Outreach

4 Financial Pain Points for College Students

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Financial Pain Points for College Students

This week, I had the opportunity to visit New York Institute of Technology’s Long Island campus to do a presentation about personal finance basics and student loans. After talking with some students both before and during the session, I figured out that their pain points boiled down to four main categories.

1. Building and Protecting a Credit Score

Credit scores are frequently a section of our presentations that we have to stop and field a lot of questions. There are so many myths out there that cause a lot of confusion, plus a general fear about how to properly use credit cards. I emphasized the fact you don’t need to take out a loan to build your credit score and diligent using a credit card is a free way to get a 700+. Just remember: pay on time and in full!

[6 simple steps for building your credit]

2. Digging Out of Consumer Debt Already Incurred

It’s not uncommon for college students to fall victim to the credit card debt trap. Some students had already started to utilize balance transfers to move debt over to 0% APR. This is a great strategy – but only if you can properly use the balance transfers. I overviewed some of the traps banks are hoping to lure you into with a balance transfer.

[Learn more about balance transfers]

3. Understanding Income-Driven Repayment Programs

Most of the students had federal student loan debt, but hadn’t heard about income-driven repayment programs. These programs, such as IBR, REPAYE, PAYE and ICR can help make payments affordable – especially in the early years after graduation when salaries are likely to be low. The income-driven repayment programs restrict payments to a percentage of discretionary income and then discharge any remaining debt after 20 to 25 years.

[How to set up income driven repayment plans]

4. How to Refinance Student Loans

Not all students can pay for tuition by just using federal loans, which leaves them turning to the private sector. Not only are private student loans likely to come with higher interest rates, but they definitely come with fewer protections and perks. Federal loans offer grace periods, forgiveness, income-driven repayment plans, forbearance and deferment. Private loans lock you in and aren’t always so lenient. However, refinancing does provide the opportunity to reduce interest rates on private and/or federal loans. Students just need to be wary about giving up the protections of federal loans.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Life Events, Outreach

What Poor Kids Don’t Get to Learn About Money

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

cash back_lg

I heard someone relate a story about a teacher and a lesson she taught her students. The teacher randomly assigned each student a seat in the classroom. Once the students took their seats, the teacher placed the room’s trash can at the front of the room, under the blackboard.

The teacher asked each student to take a piece of paper, crumple it into a ball, and throw it into the trash can. The students who made the shot were the winners. Those who missed, lost.

The kids in the back immediately pointed out that this wasn’t a fair competition; obviously, the kids in the front rows of the class would have better odds of “winning.” They had fewer obstacles in their way, they had a better line of sight to the target, and they were much closer.

The teacher shrugged and told them it was “fair” because the seats had been assigned randomly and everyone was allowed to throw their paper ball at the trash can. Everyone was allowed a shot at winning.

Reality Check: Privilege Is Real 

The classroom exercise illustrated something very real: some people are randomly assigned a better chance at succeeding than others.

The students in the front of the room were allotted the best chance because they were randomly placed closest to the trash can. The students in the middle of the room had a decent shot, but they had to work a little harder to make it. The students in the back rows faced the biggest challenge.

Were the students in the front of the room the bad guys? Not at all – but they had to acknowledge the fact that they were better set up for success than the students farther away from the target.

The point of this little story is to show us how we don’t all have an equal shot at everything, all the time.

When it comes to money and financial education, we don’t all have an equal shot at learning what we need to in order to succeed on our own in the real world. People with less money often receive fewer opportunities to learn financial principles, practice putting their knowledge into action, and build real wealth from a solid, educated foundation.

And because we tend to think of money as a taboo topic, we don’t have good conversations about finance. And because we don’t include financial literacy in our school curriculum, children from lower-income families don’t get to learn about money in the same way as their more affluent peers who may get financial lessons at home.

The list of what poor kids don’t get to learn about money is long, too long for a simple blog post. Let’s focus on these three big missing money lessons of poor kids to get you thinking about this issue.

Importance (and Know-How) of Investing Money 

Poor kids – or even lower-middle class kids – don’t usually get an opportunity to learn about investing. The best a poorer family can hope for is to put away a few dollars in a savings account. There simply is not enough money in a low-income household to risk losing in a bad investment or volatile stock market.

I can vouch with a personal experience on this money lesson missing from the lives of poor kids. My parents both came from extremely low-income families, and worked hard from an early age to create a better, more affluent life together.

Over the years, they did earn more money and advanced up the socioeconomic ladder. By the time I started school, they were able to purchase a nice home in an affluent suburb with an outstanding school system. Getting a quality education set me up for success later in life; I was the first person in my family to graduate from college.

I was lucky to pick up important money lessons about saving, living within your means, and working hard to earn more money. But I never learned how to invest from my parents with poor backgrounds, because they had no actionable knowledge to give me.

In poor families, there is no knowledge of investing to pass along and share with kids in the home.

Maintaining Good Money Mindsets

Personal finance is personal, and there’s a lot of behavior and psychology involved in being “good with money.” Maintaining a good, positive mindset about money does impact financial success.

When you think positively about money, you’re more inclined to believe:

  • You can work to earn more and increase your wealth.
  • There is enough money to go around; you believe in abundance.
  • You have options in hard times; you can find solutions to financial problems.
  • Money is a tool you can use to create a better life.

But when you have no positive experiences with money, you may feel that:

  • Money is evil and people who build wealth are bad, greedy, or selfish.
  • Money is difficult to possess and hard to manage.
  • You don’t deserve money.
  • You’ll never earn more money and there’s nothing you can do about it.

See the differences here? People who develop a good relationship with finance can feel empowered to seek out answers to their questions and solutions to problems. Those who struggle to make enough money, or have experienced what it’s like to not have enough to adequately meet basic needs, may feel extremely negative towards money.

Poor kids whose families struggle to make ends meet, live paycheck-to-paycheck, or go without proper meals, housing, and clothing have no chance to form a positive relationship with money. They don’t have the privilege to learn about how mindsets and beliefs around finances hold power.

How to Leverage Assets to Build Wealth 

Poor kids may think of all debt as something toxic and negative, but inevitable, if their parents regularly max out credit cards because they have no cash to pay for groceries and receive collections calls each week. They may think that debt is something you’re trapped in with no options for getting out.

Poor kids don’t have the opportunity to learn about how debt can be used to build wealth. This is usually what we think of as “good” debt – but no low-income family will have the luxury to distinguish this from the other bills they’re overloaded with.

Good debt can allow you to borrow money to access an asset you otherwise wouldn’t be able to afford. A mortgage, for example, helps you purchase real estate that you can live in for an affordable monthly cost. You can own this asset while investing cash into other areas, like the stock market. And you have the ability to sell the asset and walk away with a larger cash sum than what you put into it.

Or you could use good debt to borrow money to start a business. Once the loan is repaid, you have an income-producing asset that you own.

Kids who don’t know how to manage debt, evaluate potential assets, or develop their own income streams can’t build wealth in this way.

What We Can Do About It

Things don’t need to be this way any longer. There’s a wealth of free and accessible information on the internet, and that’s a great start. But it helps no one if poorer individuals don’t know it’s there to utilize.

We also need to support financial education and literacy in our schools. We need to foster discussions, provide real-world scenarios where kids can practice what they’ve learned and evaluate the results, and encourage people to ask questions.

This means changing how we think and talk about money on a massive scale, because most of us are taught that it’s “rude” to discuss money openly. But change can start with you, right now.

If you know a thing or two about finance, don’t brush off someone else’s financial question next time they bring up the subject – especially if someone asking you is a child or student. Keep yourself open to the conversation!

Share your favorite resources. Show others where to find personal finance blogs you read, financial podcasts that you love listening to, or books that taught you something important.

Stop thinking of money as taboo and encourage discussion, questions, and education on finances.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kali Hawlk
Kali Hawlk |

Kali Hawlk is a writer at MagnifyMoney. You can email Kali at Kali@magnifymoney.com

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