Foundation’s Maximum Impact Pilot
We are developing a highly cost-effective intervention that can help solve the homelessness crisis.
View Our Proposal
Program Results
For under $200,000, we will generate a 20X return and save over $4 Million
The federal government alone spends around $51 Billion a year to fight homelessness and estimates that there are 552,830 homeless people in the U.S. That’s $92,253 per homeless person.
For each perticipant we expect to reduce this cost by at least 50% during the pilot year, a savings of $46,126 * 24 = $1,107,024.
Also, we expect at least half of the participants to escape homelessness altogether (for at least 3 years after the pilot ends), a savings of $92,253 * 12 * 3 = $3,321,108.
That’s a total savings of $4.428 Million Dollars.
In addition, we will save over $30 Million by preventing over four deaths
According to the Federal Emergency Management Agency, as of 2020 the statistical value of a life is $7.5 Million. And, that’s the lowest value of any governemnt department.
In 2020, the most recent year with comprehensive numbers available, there were 595 homeless deaths in Maricopa County and an estimated 7,419 homeless people overall, 3,767 of whom were unsheltered.
Deaths / Population = Death rate
Arizona’s Homeless Death Rate
595 / 7,419 = 8%
In Arizona, 8% of the homeless population dies every year. For reference, the U.S. has an annual death rate of just over 1% per year. Factoring out the standard death rate, we calculate that being homeless in Arizona increases one’s likelihood of death by ~7% annually.
With 24 participants in our pilot program, we can expect 7% * 24 = 1.68 lives saved in the pilot year. Also, we expect at least half of the participants to escape homelessness altogether (for at least for 3 years after the pilot ends), that’s 7% * 12 * 3 = 2.52 more lives saved. A total of 4.2 lives saved, at $7.5M per life, results in a value of 4.2 * $7.5M = $31.5 Million Dollars.
Homelessness costs Arizona $8 Billion a year, we will prove it can be solved.
Arizona counted 13,553 individuals suffering from homelessness in January 2022.
Given Arizona’s preventable homeless death rate of 7%, we anticipate 13,553 * 7% = ~948 of our homeless neighbors will die in 2022, costing Arizona, 948 * $7.5 Million = $7.11 Billion in lives lost.
Accounting for the $92,253 amount we spend per homeless person, adds an additional 13,553 * $92,253 = $1.25 Billion in economic costs.
Overall, we estimate that the homelessness crisis costs Arizona ~$8.36 Billion a year.
If we used guaranteed income, it would cost only $6,000 * 13,553 = $81,318 Million to end the crisis, under 1% of the cost we incur every year.
In experiments so far, guaranteed income has proven extremely effective at reducing homelessness
| Homeless Cash Assistance Pilots |
Year | Cash /
Person |
Participants | Housing Success |
Notes |
|---|---|---|---|---|---|
|
London Rough Sleepers |
2009 | £3,000 | 13 | 69% | Personalized Budget; Helped Worst
Case Population: 4-45 Years Homeless |
|
New Leaf Project |
2018 | $6,000 | 115 | 75% | Used Single Bulk Transfers, RTC Study,
Drug/alcohol spending went down 39% |
| Miracle Money | 2021 | $3,000 | 9 | 66% | Housing was not a stated goal, It was achieved nonetheless |
|
Denver Basic Income Project |
In-Progress | $12,000 | ~520 | ? | Monthly & bulk transfer schedules = Most comprehensive RTC study to date |
|
Trust Youth Initiative |
In-Progress | $30,000 | ~35 | ? | Flexible $1,250/month for 2 years |
| Our Maximum Impact Pilot |
2023 | $6,000 | ~24 | Success = 50%+ |
Flexible $1,000/month for 6 months 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.
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 personalised 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.
“The most efficient way to spend money on the homeless might be to give it to them”
- The Economist
“Why we should give free money to everyone”
- Rutger Bregman
Program Details
After a two-step screening process for substance abuse and mental illness, we will select ~24 individuals suffering from homelessness, and ensure they have access to banking services.
Each participant will receive $1,000 per month for 6 months and a volunteer friend. Participants with children will receive an extra $500 per child per month.
Over 6 months we will help each of them navigate roadblocks and work with existing services to achieve housing stability.
After completion, we will collect data on how participants' lives have changed during our pilot, and put together an impact report.
Our Vision for Arizona
After the pilot is competed, we will produce an impact report and integrate lessons learned into our phase two expansion project. Then we will begin raising the funding that will be needed to take on the homelessness crisis in Arizona at scale.
Scaling our program to $50 Million would enable us to directly help half of the homeless population in Arizona, and would dramatically mitigate the homelessness crisis.