Cash transfer programs directly helping the homeless

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(Photo by iStock/jeangill)

Money transfer programs grew up in popularity world over the past two decades. Guaranteed income pilot projects for low-income households have also taken off in the United States, from the Stockton Economic Empowerment Demonstration, based in California, to the Newark Movement for Economic Equity, based in New Jersey.

More recently, cash transfer programs have been adapted to help homeless people. Several programs have been launched or plan to be launched during the year, including those of the Trust the initiative of young people in New York, the Denver Basic Income Projectand Miracle Messages, a San Francisco-based nonprofit.

Cash assistance programs have historically ignored homeless people due to the suspicion that they would misuse the funds. “Too often our safety net programs come from a place of paternalism where we assume that people don’t know how to make the best decisions about their own lives,” says Jacquelyn Simone, policy director at the Coalition for the Homeless. At New York. City.

Proof shows that low-income people who receive cash transfers use them for essential items such as shelter and food. This includes the results of the New Leaf project, a 2018 cash transfer program for homeless people in Vancouver, Canada, run by the nonprofit Foundations for Social Change. Participants who received a lump sum of CAD$7,500 (approximately US$5,700 in 2018) had greater food security and savings and were able to move into stable housing faster than the control group.

Trusting people to know their own needs is what inspired Miracle Messages founder Kevin Adler to launch a pilot money transfer program. The non-profit organization runs the Miracle Friends program, which connects homeless people with volunteers who provide general support and wellness checks through weekly phone calls. In 2021, Miracle Messages distributed $500 per month for 6 months to 12 participants. The nonprofit is expanding to Los Angeles in 2022, where its program will provide $750 per month for one year to at least 50 adults in a randomized controlled trial.

Adler notes that half of the participants were able to secure stable housing largely through cash transfers. One of these participants, Ray [surname withheld], lost his job due to health issues and lived on the streets of San Francisco for a year before joining the cash transfer program. Ray’s savings from the program allowed him to move to Topeka, Kansas and secure permanent housing, soon after he found a job. The program, which provided her with volunteer support and the freedom to spend the money as she pleased, boosted her confidence. “They allowed me to make decisions for myself,” he says. “For someone to come up to you and say, ‘I trust you’, that’s a lot.”

The researchers say several considerations go into the design of the pilots. One is whether to provide support services in addition to money. Miracle Messages expects cash transfer participants to also continue their weekly check-ins with their volunteers. The Denver Basic Income Project provides a variety of supports, including employment assistance, and the Truth Youth Initiative offers counseling, housing navigation, and other services—in both cases, these services are not required to receive the money.

Other considerations are the amount and frequency of payments. the Denver Basic Income Project plans to test payment structures with 820 participants in 2022. A group will receive an initial lump sum of $6,500, followed by $500 per month for 11 months; a second group will receive $1,000 per month for one year; and a control group will receive $50 per month for one year.

the Trust the initiative of young people, launched in early 2022 with funding from the New York City government and private donors such as the Robin Hood Foundation, is also piloting a cash transfer program. Homeless youth will receive $1,100 per month for 2 years. The program also includes a lump sum of $3,000 available to participants, who decide when and how to withdraw it (for example via a bank account or a payment app like PayPal or Venmo). Matthew Morton, a researcher at the University of Chicago who works on program evaluation, explains that “all aspects of program design and evaluation were adapted based on feedback from young people [who have experienced homelessness] and what they thought would work for them. For example, they recommended adding a lump sum payment to help with major expenses, such as apartment deposits and furnishings.

Cash transfer programs are not a silver bullet to ending homelessness. But the success of pilot projects like Miracle Messages indicates the potential of these programs to help homeless people directly and quickly, without barriers.

Read more stories by Stephanie Wykstra.

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