By: Aliza Gutman, Head of Product, Canary
One of the highlights of my tenure at the Financial Health Network was the opportunity to work with credit unions around the country and to get to know their dedicated employees. Credit unions were among the first institutions to hop on the financial health train and to examine how they could work to improve both member and employee financial health. As I learned about credit unions’ mission and motto, it became clear why the financial health message resonated so clearly with this community: it’s squarely aligned with the movement’s DNA.
In mid-2019, I joined two former colleagues from the Financial Health Network – Rachel Schneider and Kimberly Gartner – to create Canary and its flagship emergency relief fund product, Grant Circle. Canary is a mission-driven enterprise contributing to the evolution of the 21st-century social safety net to ensure that in times of financial need, individuals can access emergency funds with dignity. Grant Circle enables employers to raise funds through charitable contributions from their workforce, customers, and other stakeholders, and it provides a confidential, streamlined application process through which employees can request and quickly receive grant funds. It also provides analytics and reporting to enable employers to understand the impact of their emergency relief program.
After piloting Grant Circle in 2019, we launched a scalable platform in April 2020 just as the COVID-19 pandemic caused massive disruption and economic hardship. By the end of 2020, we had disbursed over $100,000 in small-dollar cash grants via Grant Circle emergency relief fund programs. As we reflect on over a year of grantmaking via Grant Circle programs, we find that the data underscores the need that exists among workers as well as the role cash grants can play in supporting worker financial health and employer objectives.
- The need for emergency relief exists across employee populations. We have long understood that financial fragility is widespread in the United States, and the number of working families that are one unexpected expense away from a downward spiral is staggering. Across Grant Circle relief programs, 99% of grant applications are from workers who are financially struggling (categorized as Coping or Vulnerable by the Financial Health Network’s measurement framework ) and 62% have less than a month’s worth of living expenses in liquid savings.
- The need is acute; grant applicants need quick access to funds for basic living expenses. Food and housing are the top two expense categories for which grant applicants request assistance; nearly all grant applications list one or both expense types. Additionally, over a third of grantees who respond to post-grant surveys tell us that, prior to receipt of the grant, they skipped meals or downgraded food choices due to the hardship.
- Small-dollar cash grants provide near-term relief and can help forestall a downward spiral. Grantees tell us that grants give them the breathing room they need to figure out their next steps and lower stress; grants also help employees avoid late fees, utility shut-off, and eviction. A pre-pandemic study of relief grants finds a clear correlation between receiving a grant and reporting a post-grant financial situation that is the same as or better than the grantee’s financial situation prior to the hardship. And while recovering from a hardship during a pandemic is likely more challenging than during “normal” times, our early data suggests that for workers who are fortunate enough to have a steady employment relationship small-dollar grants provide greater leverage in their efforts to rebound from the hardship.
“The application process was very easy. It took a lot of stress off my shoulders, I was really scared after… [about] what I would do next. Grant Circles has helped me feel more confident that everything is going to be ok.” – Grant Circle grantee
- Positive employee outcomes also drive positive outcomes for employers. Grantees tell us that grants helped them avoid lateness and absence from work, and enabled them to direct more of their attention to work. Additionally, the psychological and financial impacts noted above also benefit the employer. A number of studies have examined and quantified how financial stress among employees drives significant costs for employers  and, as Sendhil Mullanaithan and Eldar Shafir argue powerfully in Scarcity, the benefits of freeing up mental bandwidth for those grappling with a financial hardship are significant not only for the individual and their family but also for their workplace and society at large. Finally, a majority of grantees who respond to post-grant surveys indicate that they felt supported by their employer after receiving a grant, and over 90% agree that the relief fund makes them feel better about working for their employer.
“I have never worked in a place where an employer has cared about my well being, and I was touched when they offered the Grant Circle as a way to support us.” – Grant Circle grantee
The ability to weather a financial shock is a key pillar of financial health. For an employee who is unable to do so, a cash grant can be transformative at a pivotal juncture in their financial life. Credit unions understand this. Daily interactions with members highlight all-too-common financial struggles, and employees work tirelessly to find ways that credit union products and services can help alleviate those challenges. An employer- and employee-funded relief fund extends that helping hand to employees experiencing hardships, aligning with the credit union movement’s core values.
 A 2017 study funded by the Foundation found that more than half of credit union members and employees (across six, diverse participating institutions) were not financially healthy. In the event of an unexpected drop in income, 45% of members could only make ends meet for 3 months or less; another 10% don’t know. For more, see: The National Credit Union Foundation: Financial Health Check-Up Aggregation,“ Center for Financial Services Innovation, 2017.
 The research on this topic is extensive; the following are just two sources that explore the challenges and highlight relevant data:
- S. Financial Health Pulse: 2020 Trends Report
- Coping with Costs: Big Data on Expense Volatility and Medical Payments
 For more on the impact of cash grants, see Canary’s impact measurement approach & pilot findings.
 In the study, post-grant time horizons ranged from a few months to up to four years. While 44% of those who did not receive a grant due to a declined or withdrawn application said they were worse off financially post-grant than pre-hardship, only 9% of grant recipients said their financial situation was worse post-grant. https://www.workwithcanary.com/post/canary-and-e4e-relief-a-high-impact-solution-for-workers-facing-financial-hardships
 See the “Implications” section of Canary’s impact measurement approach & pilot findings