The Poverty Management System is Failing Your Community

The Poverty Management System 

There’s a poverty management system in every community, including yours. This system isn’t held accountable for reducing poverty rates, so little changes from year to year. The cost of living rises, as does the complexity of accessing subsidies. If you work in human services or education, you already know how frustrating, discouraging, and time-consuming this chaotic program landscape can be. For those trying to escape poverty, navigating these systems often requires so much effort that it leaves little room to focus on long-term solutions.

The Benefits Cliff 

One of the biggest barriers to economic mobility is the benefits cliff. As individuals increase their income, they risk losing critical benefits such as childcare or housing assistance, sometimes leaving them worse off financially despite earning more.

For example, John, a widower from Utah with three children in childcare, found a job that provided for his family. However, when he was offered a raise and additional hours, he discovered it would result in a $700 monthly loss in benefits—a gap he couldn’t afford. In a rare case, his employer stepped in and increased his pay to make up the difference, but for most, this isn’t an option. More often, individuals find themselves forced to turn down opportunities or remain stuck in low-wage jobs just to avoid falling off the benefits cliff.

Funding the Poverty Alleviation System’s Innovation 

The poverty management system sustains itself on $1.1 trillion annually, yet it is not structured to reduce poverty rates. In most industries, 7%-10% of revenue is reinvested in research and development to improve outcomes. Applied to poverty alleviation, that would equate to $70-$100 billion per year in innovation. However, federal investments in system improvement are minimal, and even when funding is available, there is little accountability for achieving real poverty reduction.

Empower Upper Cumberland: A Regional Model for Change

In Tennessee, Empower Upper Cumberland sought to rethink how poverty alleviation efforts were structured across the 14-county region situated between Nashville, Chattanooga, and Knoxville. Mark Farley, Executive Director of Upper Cumberland Human Resource Agency (UCHRA) and Development District (UCDD), recognized that despite extensive resources being spent on poverty-related services, too few families were successfully moving out of poverty. At the same time, businesses in the region struggled to find skilled workers, creating an economic disconnect that needed to be addressed.

To address this challenge, Empower Upper Cumberland, with support from The Poverty Solution, conducted a comprehensive community and organizational assessment to identify gaps in existing programs and explore innovative strategies for economic mobility. Additionally, The Poverty Solution provided technical assistance in data analysis, strategy development, and funding applications to support the development of this collective impact group. These combined efforts helped Empower UC secure a $445,000 planning grant to develop a regional poverty alleviation system centered on workforce development and long-term family stability.

Building on that momentum, Empower Upper Cumberland successfully secured one of seven $25 million awards from the state’s TANF Opportunity Act Pilot Initiative. These funds are now being used to implement a collaborative, data-driven approach that aligns workforce training, educational opportunities, and social services to support individuals in transitioning out of poverty.

Philanthropy’s Role in Driving Systemic Change

One of Empower Upper Cumberland’s strategies is to leverage philanthropy and private-sector engagement to sustain and expand its poverty reduction efforts. Recognizing that grant writing and fundraising capacity were critical to success, the initiative partnered with the region’s local foundation Cookeville Regional Medical Center Charitable Foubdation, to build additional funding resources.

According to Giving USA and Philanthropy Roundtable, around $90 billion is spent annually on poverty-related issues—about the amount needed for substantial research and development. In my experience working with hundreds of foundations, there’s often keen interest in new ideas, but less focus on scaling and sustaining those innovations long-term. However, major players such as the Gates Foundation, Ford Foundation, and Blue Meridian Partners are making long-term investments that drive meaningful change. If they have the necessary channels to influence state and federal policy, they can significantly contribute to reducing poverty rates. 

With more than 700 families now enrolled in Empower UC’s system, the initiative is serving as a real-time pilot, demonstrating how policy reform, program alignment, and employer engagement can work together to reduce poverty rates. The Poverty Solution is playing a key role in connecting Empower UC with national organizations and funders, helping to expand sustainability possibilities and ensuring that successful elements of the pilot can be scaled and replicated in other communities.

Disconnect in Academic Research

Building strong relationships with post-secondary institutions is critical for integrating education and workforce solutions into poverty reduction efforts. As the largest institution in the region, Tennessee Technological University plays a vital role in Empower Upper Cumberland, helping shape higher education pathways that align with workforce needs. Their expertise has strengthened the initiative by incorporating comprehensive educational assessments that connect participants’ interests, skills, and abilities with sustainable career opportunities.

Universities that research poverty often lack the channels to influence policies and programs affecting people in poverty. To bridge this gap, they can take several proactive steps, including community engagement, applied research initiatives, interdisciplinary programming—especially between the business, human services, and government sectors, policy advocacy and curriculum development to inform the next generation of poverty alleviation leaders. Strong examples such as the Poverty Research Institute at Harvard University and the University of Chicago’s Inclusive Economy Lab head in the right direction. Programs such as Participatory Action Research can empower communities by involving them directly in the research that affects them. 

Universities can play a crucial role in securing long-term funding for innovative projects that address poverty. Establishing partnerships with foundations and government agencies can help create sustainable funding streams for impactful initiatives. The Annenberg Foundation, for instance, supports academic institutions in developing programs focused on community development and poverty alleviation. 

By adopting these strategies, universities can transition from being passive observers to active participants in the fight against poverty. For real change to occur, academia must break out of its siloed existence and engage deeply with the communities they aim to serve. 

Shifting System Goals for Lasting Impact

To achieve meaningful change, leaders need to focus on high-leverage points. Providing more services through the existing poverty management system is the least effective solution. Changing regulations to improve those services is a step forward, but the most powerful action we can take is shifting the system’s goals entirely, creating pathways that support people off subsidies and into the workforce. Community leaders must advocate at state and national levels for funding that helps people move entirely out of poverty, not just maintain their status. 

In the next blog we will look at why we must address the benefit cliff effect or have a phantom workforce forever.