What Happens When Researchers Give Thousands of Dollars to Homeless People?

CNN reports on “The New Leaf Project,” an initiative in which the University of British Columbia partnered with a Vancouver-based charity called Foundations for Social Change: Researchers gave 50 recently homeless people a lump sum of 7,500 Canadian dollars (nearly $5,700). They followed the cash recipients’ life over 12-18 months and compared their outcomes to that of a control group who didn’t receive the payment. The preliminary findings, which will be peer-reviewed next year, show that: – Those who received cash were able to find stable housing faster, on average. By comparison, those who didn’t receive cash lagged about 12 months behind in securing more permanent housing. – People who received cash were able to access the food they needed to live, faster. Nearly 70% did after one month, and maintained greater food security throughout the year. – The recipients spent more on food, clothing and rent, while there was a 39% decrease in spending on goods like alcohol, cigarettes or drugs… The 115 participants in the randomized controlled trial were between the ages of 19 and 64, and they had been homeless for an average of 6 months. Participants were screened for a low risk of mental health challenges and substance abuse. Funding for the initiative came from a grant from the Canadian federal government, and from donors and foundations in the country… Direct cash transfers are not “a silver bullet for homelessness in general,” and the program focused on “a higher functioning subset of the homeless population,” said Claire Williams, the CEO and co-founder of Foundations for Social Change, but she believes the research shows that providing meaningful support to folks who have recently become homeless decreases the likelihood they will become entrenched in the experience… According to the research, reducing the number of nights spent in shelters by the 50 study participants who received cash saved approximately 8,100 Canadian dollars per person per year, or about 405,000 Canadian dollars over one year for all 50 participants. “There’s a common misconception that the cost of doing nothing is free or cheap and it absolutely is not,” Williams said.