Study out of British Columbia sees success giving homeless lump sums of cash
Homelessness has become a crisis across major cities in the Pacific Northwest, with many looking for creative solutions. One foundation in Vancouver, B.C. tested out one such solution, giving a lump sum of money to a test group of homeless individuals, and yielded promising results in the process.
The study was built as a randomized control trial by the Foundation for Social Change. Each homeless participant was given a one-time cash gift of $7,500. A separate control group was not given the cash, and then both groups were followed for 12 to 18 months to track their respective progress.
Of those who received the money, there were immediate positive changes to their lifestyles.
“Within that one month of receiving the cash transfer, people very quickly moved into stable housing, which is quite remarkable,” Foundation for Social Change CEO Claire Williams told KIRO Radio’s Dave Ross. “We were thrilled to see that this cash was really empowering people to move into housing faster, and thereby spend fewer days homeless.”
Once they moved into housing, participants would then spend the money on food and clothing, as well as vehicle repairs. There was also another promising trend when it came to how that money was (or wasn’t) spend on drugs and alcohol.
“We saw that people made really wise financial choices, and that counter to stereotypes, there was a reduction in spending on drugs, alcohol and tobacco by 39%,” Williams noted.
The study also showed a potential for saving taxpayer dollars. According to Williams, in Canada, it costs between $53,000 and $134,000 per person, per year for the duration of homelessness. Giving people cash up front saves approximately $8,100 “in terms of people drawing on the shelter system.”
Ultimately, Williams saw the study as a worthwhile exercise that gave the foundation useful, actionable data. More than that, it helped get a handful of Vancouver’s homeless off the street. Even if that may not be permanent, it’s still important, she points out.
“The shorter we can make that period of homelessness, I think the better,” she said. “And our research also demonstrates that if we want to prevent people from becoming entrenched in homeless, we need to provide meaningful support as close to the time of becoming homeless as possible.”
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