The Real Costs of Poverty: A Deeper Reflection on Think Tank’s Cost of Poverty Experience

We recently served as a community partner for Think Tank's Cost of Poverty Experience (COPE), an immersive poverty simulation hosted in partnership with SouthState Bank as part of their Community Development Advocate training.. COPE is designed to educate, build compassion, and move people toward more connection and action. We're grateful to Think Tank and SouthState Bank for creating this space where thoughtful conversations happen and greater understanding and empathy emerge.

COPE

The Cost of Poverty Experience is a simulation designed to replicate challenges and impacts of poverty. Created by Think Tank, Inc., a nonprofit based in Springfield, Ohio, COPE participants are placed in roles of low-income families experiencing a simulated month of decisions: paying bills, managing transportation, dealing with childcare, and interacting with the kinds of institutions that families in poverty must navigate. COPE is Think Tank’s flagship training experience, and it has been adapted for businesses, nonprofits, faith communities, healthcare organizations, universities, and schools.

More than 40% of U.S. households struggle to afford essential needs, pushing them to make difficult decisions and take significant risks every day. COPE’s format makes this statistic come to life. The program creates human stories that support deeper compassion for others including families caring for illness, experiencing dependency, and single parenthood. We work alongside leaders, partners, and residents navigating economic hardship, and we know the numbers, but knowing and understanding poverty are different. The COPE simulation is effective at helping others understand more profoundly the difficulties experienced by those in extreme poverty.

Psychology Behind the Pressure of Poverty

Research shows that one of poverty's most damaging, and most invisible, features, is the psychological strain of constant impossible trade-offs, the sense of running out of time before you've run out of problems. Harvard economist Sendhil Mullainathan and Princeton psychologist Eldar Shafir spent years studying how scarcity affects the human mind. Their conclusion, published in their landmark work Scarcity: Why Having Too Little Means So Much, fundamentally reframes how we should think about poverty and decision-making.

Being poor requires so much mental energy that those with limited means are more likely to make mistakes and bad decisions than those with bigger financial cushions. Mullainathan and Shafir call this the "bandwidth tax" the cognitive cost that scarcity imposes on the mind. Scarcity in forms such as poverty, loneliness, or scheduling constraints, overloads a person's "mental bandwidth," and that strain on cognitive resources can in turn negatively affect one's job performance, decision-making skills, or self-control.

It is not that the poor have less bandwidth as individuals. Rather, it is that the experience of poverty reduces anyone's bandwidth. Sendhil Mullainathan

Experiments showed that the impact of financial concerns on the cognitive function of low-income individuals was similar to a 13-point dip in IQ, or the loss of an entire night's sleep. And this was not a permanent condition tied to the individuals themselves. COPE participants could feel this in real time, as the simulation is deliberately constructed to show that no matter how smart, organized, or hardworking you are, there simply isn't enough time, money, or options.

Decision Fatigue and Chronic Stress

Compounding the bandwidth problem is what researchers call decision fatigue, the phenomenon in which the quality of human decision-making deteriorates after sustained periods of making choices. For people with financial security, most daily decisions are relatively low-stakes. Where families navigate poverty, decisions carry more consequence. Structural barriers such as limited access to resources, complex administrative systems, and social stigma also restrict decision-making.

The psychological toll of poverty doesn't stop at decision fatigue. Chronic stress resulting from poverty appears to impair the function of two major brain systems: circuitry that allows individuals to regulate thoughts and emotions, broadly called executive function, and circuitry that facilitates detection of important sources of threat and reward in the environment. Long-term financial insecurity results in the reinforcement of coping but constrained habits, such as concentrating on short-term requirements, risk aversion, and underinvestment in human capital. Understanding this helps make accurate assessments of what people are really facing and how to design supportive services and policies.

Thank You SouthState Bank

The fact that SouthState Bank chose COPE speaks to the integrity of their institution. Financial institutions are at a very important juncture with poverty providing access to credit, banking services, and financial products that can open doors for families living on the margin. When the people making those decisions, the loan officers, the branch managers, and customer service, have a more profound understanding of what their customers are navigating, better outcomes become possible.

Being part of COPE as a community partner was a reminder of what our residents may navigate. We are proud to have been part of SouthState Bank's Community Development Advocate training. We hope it has had as positive an impact on the employees, as it did on us as community partners.

Learn more here,

If your organization is interested in experiencing COPE, or bringing it to your team, we encourage you to visit Think Tank, Inc. at thinktank-inc.org/cope.