It’s not easy giving away a small fortune.
Thanks to savvy investments, Mark Donovan’s wealth soared during the pandemic, but his recognition of the widening gap between the wealthy and the poor also grew. He wanted to channel his privilege into public service, and so began researching options.
“I was seeing people losing their main sources of income and their stability and housing in many cases, and I was watching my investment in Tesla grow by six to eight times,” recalls Donovan, a Denver entrepreneur who co-founded a Bali-based clothing company in the early 1990s. “I started to do a deep dive into the direct-cash space, and I realized that it works. All the projects being done around the world are having these amazingly positive results.”
After experimenting with doling out personal grants of $1,000 a month to twelve individuals during the last half of 2020, he decided to go bigger.
So early this year, Donovan founded the Denver Basic Income Project, partnering with other organizations to make direct cash payments to individuals experiencing homelessness. DBIP would choose 260 participants at random to each receive $6,500 up front, then an additional $500 a month for eleven months; another 260 would get $1,000 each for twelve months; and 300 participants would receive $50 a month for twelve months.
Donovan committed $500,000 to the project, and planned to raise the rest from individuals and organizations, with a goal of a full launch in the fall.
Compared to a social safety net filled with administrative processes and obstacles, Donovan believed that providing cash directly would better help the people he’s hoping to serve. “I was also wanting to find a way to leverage my white privilege, wealth privilege and power in a way that might inspire other people to do the same because we’ve been so disproportionately advantaged,” he explains.
But after the Denver Basic Income Project’s feel-good announcement, the project hit some bad bumps.
Denver Homeless Out Loud was an original partner, along with Mile High Ministries. But in August, even as DBIP began doling out cash to a pilot program of a dozen participants, DHOL stepped away from the project, as did a couple of staff members.
Ana Cornelius, a DHOL organizer who was on DBIP’s advisory board, says that a lack of transparency in the project’s decision-making process, as well as proposed language for a consent form, convinced her she had to separate herself from the project. “I’m really frustrated, because this project is really important, and it needs to be done well. If it’s not done well, it could be disastrous for my community,” says Cornelius. “At this point, I’m fearful that it won’t be done right, and the data collected will be used to work against basic income.”
DBIP participants are required to work with a service provider — one of the partner organizations — and to sign a consent form adhering to the project’s policies on spending and behavioral conduct. According to Cornelius, a reference in the form to a broad “do no harm” policy was particularly worrisome; she says that “do no harm” could be open to many interpretations and lead to kicking vulnerable people back out onto the streets.
Cornelius describes the DBIP’s structure as “a runaway train created to manufacture consent.” She says that the project implemented shortened deadlines, asked for work during her vacation, and failed to provide transparency. “I was really upset that all of my boundaries were violated,” she says. “These white, affluent men are in the boardroom making decisions themselves, excluding the very demographic that should have the most say in this project.”
The DBIP board needs to represent the people it’s intended to serve, she says: “They don’t have an unhoused person on the board. I was the person who was representing that community and had personal experience with unhoused people. All of the people they have on the board are not representative of the people on the streets, and I’m not going to participate in that structure.”
Cornelius also had issues with DBIP’s fiscal sponsor: Impact Charitable, a Denver-based nonprofit designed to promote economic and social equity through community-focused projects, that came on board June 25. “If you want to not re-create the status quo, don’t align yourself with the status quo,” she says.
Cornelius had concerns about the governing process between Donovan and Impact Charitable, and impositions like credit limitations that could set up vulnerable participants for failure. One of the participants who was working with Cornelius planned to use money from the project to buy an RV in order to escape an abusive relationship. But by limiting the amount that could be withdrawn each day — a proposed $705 initially — she was put in a risky situation as she saved her stash. “For a person living in a tent, it’s not safe to store that kind of money for days. That could get you killed,” Cornelius says.
Both Impact Charitable and DBIP work through AidKit, a data collection app used to track participants’ spendings and ensure they align with project policies.
“DBIP’s fiduciary partner, Impact Charitable, is a majority diverse, highly regarded entity with a powerful history of deploying capital for social good,” says Rich Hoops, executive director of Impact Charitable. “Both organizations are deeply engaged in addressing the inequities of race and other forms of economic and social oppression.” For example, Impact Charitable has spearheaded efforts like the Left Behind Workers Fund, which distributed direct payments to undocumented immigrants experiencing unemployment during the pandemic.
But staffer Jessica Sherwood also left the project on September 1 because of her own hesitations about Impact Charitable’s involvement in the DBIP. “The fiscal sponsor is a pretty traditional, hierarchical, patriarchal structure, and they ended up really starting to exert some influence over the program that a lot of folks had challenges with,” says Sherwood. “The way the organization was being structured ended up being kind of a different philosophical approach than a lot of folks involved, including myself, thought the structure was going to be having.”
Despite the concern over Impact Charitable’s involvement, Donovan believes the nonprofit is uniquely positioned to execute something like DBIP and thinks the partnership will guide the project in a positive direction. “If we wanted to build these capabilities from scratch, it would have delayed the program significantly, and there would be no guarantee that we did this successfully,” he says. “There’s issues of liability for the organizations, the fiscal sponsor, for everybody involved. I think most people are of the opinion that the concept here is unconditional cash, so finding a way to create the proper protections for the organizations and the individuals in the program — that has to be worked out through the consent form, and we’ll be working on that to come up with something that works for that purpose.”
Mile High Ministries is now redirecting participants in the pilot program who had been working with DHOL to its own community-based program, Joshua Station. But Cornelius says that the six participants originally assigned to DHOL don’t want to work with anyone else.
Maria Sierra, who sits on the planning board of Joshua Station, is working to change that. “What we hope to find out in the soft launch is what we have to fix, tweak or look at to make sure we don’t have things fall through the cracks,” says Sierra. “It’s taking a bit longer.”
The University of Denver’s Center for Housing and Homelessness Research is another partner on the project, working on research.
“One of the most exciting things is that we could see people living without a home right now experience more positive housing stability outcomes,” says Daniel Brisson, executive director at DU’s CHHR. “Housing is a huge challenge in Denver, and the project focuses on the most challenging parts of affordable housing in our city.”
DBIP is now in the midst of reorganizing, which is pushing back the schedule for rolling out the full program to an undetermined date. But although the reorganization will slow down the distribution of the cash, Donovan believes it will ensure that the project is inclusive and representative of the people on the streets going forward, and won’t put them in a risky position when agreeing to participate.
“Social and economic justice is infused into the work of providing basic income to individuals who are unhoused. We have structured the selection process to make sure that the recipients are representative of the actual demographics of homelessness, which we all know are overrepresented by BIPOC communities,” says Donovan. “This choice was not made without considering all of these factors. The choice was made in what we believe is the best interests of the individuals we are seeking to serve.
“We are fully committed to building an organization that is inclusive and representative of the communities we are serving,” he concludes. “We are working toward this goal every day.”