Case Studies

Cash can be Effective for Helping the Homeless

Keeping people on the streets costs between 45-180K (accounting for inflation) because they, “randomly ricochet through very expensive services” such as hospitals, addiction treatment services, police arrests, jail time, and court time. Alternatively, giving them basic income enables them to meet their immediate needs and empowers them to chart paths to housing stability.

The Denver Basic Income Project has been providing over 500 homeless participants with basic income since the beginning of 2023. Here are the Preliminary results using the first 6 months of data:

  • No one (out of 12 total) receiving $1,000/mo was still sleeping outside after 6 months
  • Full-time employment increased
  • Fewer visits to the emergency room
  • Fewer nights spent in jail
  • Reduced feelings of distress and anxiety
  • Feel safer and more welcome where they sleep
  • Greater sense of hope

New Leaf Project: A basic income experiment run by Foundations for Social Change helping homeless individuals in Canada, the New Leaf Project gave over 100 recently homeless individuals $7,500 of unconditional cash.

  • The experiment resulted in a 39% reduction in spending on drugs, alcohol, and cigarettes.
  • The cost savings to the shelter system paid off the cost of the cash transfer after just 12 months. We should also note that corporal and medical costs are far higher in the US than in Canada, so transfers in the US would pay for themselves far faster.

In experiments so far, basic income has proven extremely effective at reducing homelessness

Homeless Cash
Assistance Pilots
YearCash / 
Person
ParticipantsHousing
Success
Notes
London Rough
Sleepers
2009£3,0001369%Personalized Budget; Helped Worst 
Case Population: 4-45 Years Homeless
New Leaf
Project
2018$6,00011575%Used Single Bulk Transfers, RTC Study,
Drug/alcohol spending went down 39%
Miracle Money2021$3,000966%Housing was not a stated goal,
It was achieved nonetheless
Denver Basic
Income Project
In-Progress$12,00052080%Most comprehensive RTC study to date,
Broad Elegibility, 6 Months Results
Trust Youth
Initiative
In-Progress$30,000~35?Flexible $1,250/month for 2 years
Our Maximum
Impact Pilot
2023$6,000~24Success
= 50%+
Narrow Eligibility, $6K or $9K
Most Vulnerable Population

Findings From the New Leaf Project

Fact

Cash transfer recipients prioritized and increased spending on recurring staples like housing/rent, food, transportation, and utility bills.

Cash transfer recipients prioritized and increased spending on recurring staples like housing/rent, food, transportation, and utility bills.

Data

On average, cash recipients spent 52% of their budget on food and rent, 15% on “other” items such as medications and bills, and 16% on clothes and transportation.

Why it matters

Cash transfers provided choice and enabled people to buy more goods, helping them meet their basic needs. Counter to some stereotypes, participants spent their money on essential items.

The Worst-Case Case Study: 
Simon From London’s Experiment

Simon was sleeping rough (homeless) for 18 years. He moved into accommodation ten months ago after engaging with the personalized budget pilot. He has been on a methadone script for four months, engaging with drug treatment after 20 years of heroin use.

The script is great. I don’t know what to do with myself. I have breakfast, go to the clinic to get my script, then watch telly. I think: what can I do today? – instead of going out begging for money for gear. I’m concentrating on getting it together. I’m trying to go for rehab and detox. I just want to get myself steady first. 

For some reason, for the first time in my life, everything just clicked, it feels like now I can do something. Now I’m thinking of going back home. I’ve got two kids. Hopefully by Christmas I’ll get it together. I want to get myself sorted first. 

I’m happy as Larry. I never thought about going back out. [The quality of my life has improved] a lot. I’m starting to look after myself, wash and shave. I’ve got a better life, I’m starting to do something with my life.
Simon

“The most efficient way to spend money on the homeless might be to give it to them”

– The Economist
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