When is $500 per month more than $3,000?

by | Apr 28, 2022 | Formation, Homelessness, Reflections | 1 comment

The counter-intuitive answer is when the $500 is given directly to selected homeless people.

Surprised! Most people are! It’s a pleasant and almost unbelievable surprise. It is a belief that is supported by a number of pioneering studies.

Cynthia Griffith, writing for Invisible People, backed up this “new math”…

Last year, when 12 unhoused people in the Bay area were handed just $500 per month via the generous nonprofit, approximately one-third of them were able to secure housing right away.

This happened much to the utter shock of authorities and even the study’s organizers. Their initial aim was merely to help with food and toiletries while participants sought avenues into housing through the state.

Flash forward another year, and yet another shock has taken hold. Now, on the meager $500 per month, a full two-thirds of study participants have secured housing. The implications of these results are both promising and telling.

To put things into perspective, the criminalization and short-term policies currently in place for homelessness are costing taxpayers approximately $2,964 per chronic homeless person per month – almost 6 times the $500! These so-called solutions have not so much as put a dent in the homeless crisis.

The “Miracle Money” program is another example. A California-based Nonprofit Organization Adopted the Strategy of Giving $500 per Month to 12 People Experiencing Homelessness. What Happened Next Blew Researchers Away.

A Canadian variation – The New Leaf Project

The New Leaf Project (NLP) distributed a one-time cash transfer of $7,500 to people experiencing recent homelessness in the Vancouver area.

They write

While many would balk at the thought of disbursing large sums of cash to people living in homelessness, our approach was based upon scientific evidence and our bold action has paid off.

By preventing people from becoming entrenched as homeless, NLP helps individuals to maintain dignity and regain hope. At the same time, community resources can be spent in other urgent areas.

Cash transfers provide choice, control and purchasing power at a critical time in people’s lives. This is not merely a gesture of help, it is a signal that society believes in them.

The direct giving model has been proven to empower recipients to find housing and purchase goods that improve their lives, while restoring dignity, confidence and a sense of well-being.

They continue

Further, research has found that cash transfers do not increase spending on goods, such as alcohol, tobacco and drugs.

Building on this work, we are the first program to provide cash transfers to people experiencing homelessness in the world. Our evidence to date suggests that we are making an impact, and that direct giving is an effective tool to quickly reintroduce stability into people’s lives.

To put things into perspective, the average family on a waitlist for housing vouchers can expect to spend approximately two and a half years “in line” for affordable housing. Here, it’s easy to see the benefit of eliminating the middle man.

These targeted experiments may be on a small scale but the implications may be huge.

Homelessness is currently expanding at unprecedented rates. Here, researchers present a solution that has produced long-term benefits for study participants at a fraction of what it costs to criminalize homelessness and poverty. 

Ask your local legislators can they match these results?

1 Comment

  1. Joe Bellacosa

    Fascinating & Refreshing – not “new math” – new thinking!
    Thanks, Fr. Michael
    Mary & Joe Bellacosa