Strike Debt, an offshoot of Occupy Wall Street, is a nonprofit organization focused on raising funds to relieve debt of struggling Americans. On March 14, 2013, Strike Debt announced that it spent over 1.1 million to pay back debts for individuals admitted to emergency rooms in Kentucky and Indiana. The benefits were twofold: patients who could not afford to pay their hospital bills got their debt forgiven; hospitals were paid in full versus if they had sold unpaid patient debts to collection agencies at a lower price. Medical debt is the leading cause of bankruptcy in America, and so far the type of debt Strike Debt’s Rolling Jubilee Fund has been eliminating, but student loan and housing debt are other crippling forms of debt in the United States that Strike Debt would like to see abolished.
The Rolling Jubilee Fund’s website is a public service in itself as it provides valuable information regarding how the debt industry works in the United States with refreshing transparency. Motivated by the premise that American citizens should not have to go into debt to get basic amenities such as a college education or universal health care, the Rolling Jubilee focuses its efforts to buy back consumer debt while new debt, i.e., to forgive the debt before it’s sold off as uncollectable.
Reading about the organization’s efforts, one realizes buying debt is a very complex process. Anonymous accounts are bundled together into large portfolios and sold as a package, usually to debt collectors. The Rolling Jubilee Fund recognizes that, similar to the risks consumers take, if it isn’t careful about whose debt it eliminates and when, it can be taken advantage of by third party debt industry profiteers. It therefore takes it time to do its research regarding what type of debt to eliminate; the organization’s expressed goal is to spend donations “on real debts that help real people.” The organization posts its purchase agreement on its website for public scrutiny.
Strike Debt is unusually forthcoming about its operations from a governmental compliance perspective as well. The IRS granted the Rolling Jubilee Fund a 501(c)(4) nonprofit tax exempt status due to its focus on social welfare. This is different than a 501(c)(3) status given to charities; contributors cannot declare donations to the Rolling Jubilee as a personal tax deduction. Since it pays back debt randomly, the Rolling Jubilee does not do means testing of the people it eliminates debt for; the drawback of not doing means testing is that some people it eliminates debt for might not be on the front line of needing the financial support. Some homeowners, for instance, are able to weather the financial hardship of foreclosure better than others due to personal income levels, etc.
Strike Debt is clear about its stand on means testing in the Commonly Asked Questions section of its website. While its efforts are to help individual people get out of debt, the campaign is also meant to educate the general public about “a predatory debt system” in that original prices are inflated and then compounded by “immoral large amounts of fees and interests.” This premise is interesting in that it alleviates the stigma of blame associated with debt to allow for reflection on might be a productive approach to civic action as a collective.
Strike Debt is prudent to define its efforts as a “spark–not the solution.” From an entrepreneur’s standpoint, the Rolling Jubilee Fund is an intriguing business model in that its innovative structure demonstrates how generosity can be utilized to create a sustainable economic platform through individual sponsorship. Whatever one thought of the Occupy Wall Street protesters, detractors could never accuse the movement of being in collusion with Wall Street and the other powers that be; this could end up a point decidedly in Strike Debt’s favor as keepers of a financial trust for the American general public.
The Rolling Jubilee is an exciting idea and its founders should be congratulated for their ingenuity of inventing a simple, common sense approach to a monumental, complex problem of national proportion. In their November 2012 launch they expected to raise $50,000, but instead they raised over $500,000. If Strike Debt continues to take off with donations, members should demand it retain its current level of transparency through the expansion. Judging by the insightful documentation the Rolling Jubilee is posting on its website, Strike Debt has thought through the power of transparency as a part of its mission. Whether or not the Rolling Jubilee Fund can be scaled up effectively is a challenge worth examining.
Predatory debt systems, immoral fees and interest …right now it seems appropriate to communicate the monstrosity of the social ills Strike Debt organizers wish to confront using emotionally charged rhetoric; part of the creative challenge will be how to continue to transport high minded ideals into sustainable business models if Strike Debt widens its reach. That this well-focused, sophisticated organization came out of the Occupy Wall Street movement, often criticized for lacking direction, is worth noting.