- The Foundation for Social Change, a charity based in Vancouver, partnered with the University of British Columbia to identify 50 people who were recently homeless.
- The researchers gave them a one-time payment of $ 7,500 and examined their spending habits and living conditions over the next 12 months.
- Recipients were able to secure stable housing faster than those who did not receive the infusion of money, saving the protection system $ 8,100 per person.
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A Canadian charity recently conducted a bold social experiment: people affected by homelessness were granted a one-time cash infusion of $ 7,500.
According to the researchers, the results were “beautifully surprising”.
The study, titled New Leaf Project, addresses the power of universal intermediate basic income to lift people out of poverty. A universal basic income is essentially a government spending of money, often for the purpose of rehabilitating people living in poverty.
More and more jurisdictions around the world are experimenting with this policy, including the recent US lawsuit in New York State and the NGO GiveDirectly’s ongoing study in Kenyan villages.
The Foundation for Social Change, a charity based in Vancouver, has partnered with the University of British Columbia to identify 50 people between the ages of 19 and 64 who were recently homeless. The recipients were found to have no significant substance abuse or mental health problems.
The researchers examined their spending habits over 12 months and compared their results with a control group that did not receive the cash payment.
Those given the money mostly spent the money on food, rent, and transportation, and moved to stable housing more quickly as the year progressed, according to the results. Spending on “tempting goods” such as drugs, cigarettes and alcohol decreased by an average of 39%. According to Canadian news agency CBC, recipients saved an average of $ 1,000 in savings.
By paying in cash, the Shelter system saved $ 8,100 per person over the course of the year for a total saving of $ 405,000.
It also gave some participants the opportunity to update their professional skills.
“When I found out I had been accepted for the money transfer, I was living in an emergency shelter trying to find a way forward,” said a New Leaf project participant, whose identity was kept anonymous, in a press release. “The money gave me the resources I needed to get out of the shelter and push into the social programs and computer lessons I needed. It was an important step and gave me a choice. It gave me a chance.”
Finally, the Foundation for Social Change hopes to expand the study with a $ 10 million fundraiser to bring the same effect to many more people across Canada.
“Homelessness can happen to anyone,” Williams wrote in the study’s Impact Statement, noting that many people are just a paycheck away from losing their homes or cars and are forced to find other ways of life. “While the economic impact of homelessness costs everyone, ultimately, the human cost is so devastating.”