By Roxana Popescu
Government aid to households traditionally comes with restrictions. You can load your shopping basket with potatoes, but not Popsicles. Certain grants are for prescription medication co-pays, not a dental cleaning.
A shift in thinking about aid among some policymakers and nonprofits has led to the creation of pilot programs across the U.S. where households get cash, with no strings attached, so they can spend it as they see fit.
San Diego County is at the forefront of these initiatives.
A local nonprofit, Jewish Family Service of San Diego, has been testing versions of this approach in four programs. Two gave different amounts of money to different groups of low-income San Diegans — some who were raising families and others who were at risk for homelessness. One program, still ongoing, targets families at risk for foster care intervention. A fourth, in the planning stage, will work with Black women who have goals of entrepreneurship.
The programs, paid for in large part with county, state or federal funds, have so far served more than 2,800 households in San Diego County and have made cash payments totaling more than $11.7 million.
All ask a similar question: Can cash grants, or grants in combination with mentorship and coaching, help boost the economic welfare of low-income people more efficiently and effectively than other kinds of aid?
A new report about the programs, released by Jewish Family Service this week, makes a case that “unrestricted cash support acts as a systemic buffer, provides economic security during economic downturns, helps families weather financial emergencies, and enables them to plan for the future.”
Cash payments can also be a catalyst for upward economic mobility, the report says: “For many, having enough cash is the difference between following through with that new business idea, booking that dental appointment, enrolling in a college course part-time, or paying their monthly rent.”
The report also shares some preliminary results. Researchers found that low-income families and individuals who got support in the form of cash used that money to pay for essential needs — food, housing, retail goods and transportation, said Khea Pollard, the director for economic mobility and opportunity at Jewish Family Service of San Diego.
While one grant program is still under way and the long-term outcomes are still unknown for two others that concluded, these early results show people used their cash grants to help their families — not for frivolous purchases, Pollard said.
“It’s debunking a lot of the myths and the disbelief and really the hesitation around handing cash to families,” Pollard said.
Kimberly Giardina, the director of the county’s Child and Family Well-Being Department with the county’s Health & Human Services Agency, pointed to new research about a Los Angeles guaranteed income pilot. Its participants were more able to cover a $400 emergency, compared to the control group, and they were more able to afford the food they needed.
California’s Department of Social Services has seven guaranteed income pilot programs, and one more in the works that will focus on seniors, she added.
“I think there’s a lot to be learned about how we can use cash assistance programs to really mitigate some of the impacts of poverty,” Giardina said.
Can an income boost keep at-risk families together?
The programs operated by Jewish Family Service test different hypotheses around cash payments.
The Family Income for Empowerment Program, now enrolling participants, targets families who are at risk for interacting with the foster system. It is part of a randomized, controlled trial with the County of San Diego and Casey Family Programs, a foster care service.
Through this pilot, the county hopes to find out if the cash payments are “really successful in reducing the number of families who become involved in the foster care system, because we’re able to mitigate a lot of those factors that are associated with neglect, through cash assistance,” Giardina said. Another question is whether this program — an up-front investment in the finances of vulnerable families — is more cost effective compared to foster care and other safety net programs, she added.
To find out if an unrestricted cash boost makes a difference, more than 400 families will receive $500 a month for 24 months. Participants must be referred by the County’s Child Family and Well-Being Department, earn 200 percent of the Federal Poverty Level or less, have at least one child living with them and be local. Because of their income level, families in this program and the others are already likely to be receiving government subsidies.
While guaranteed income has been studied extensively, a lot less work has been done on the link between such support and reduced interaction with the foster system, Giardina said.
“Addressing it this way is really new. As far as we know, we’re only the second program like this in the country,” Giardina said. The other is in Chicago, she added.
The study period is not finished, so it is too soon to know if it helped prevent intervention by Child Welfare Services.
One early result, though, is that people spent grant funds on retail, services, food and groceries. This is meaningful, Pollard said, because two-thirds of participants had reported in a baseline survey that they skipped meals before receiving these cash payments. Not having enough food can be a trigger for an investigation for neglect.
“People can get referred for a whole host of reasons – for not having food in their house, not being able to feed their child, maybe their kids coming to school hungry,” Pollard said.
Can money plus curated services help build wealth?
The Black Women’s Resilience Project plans to pair two kinds of support: $1,000 monthly payments for 18 months, plus suppport for professional and personal development in the form of “mentorship, coaching, and social enterprise opportunities that help build economic mobility and generate wealth.”
That support will come in four areas: finance, health, community-building and civic engagement.
In the finance category, participants will be mentored in entrepreneurship, finance, and career skills. In health, they will have access to culturally competent health care — an example being doulas who understand how the potential for racial bias can lead to tragic outcomes for Black women during labor and birth.
“We expect to see increased food and housing security, improved health outcomes” and career growth that will lead to higher income, the report says.
How does cash aid help when there are no strings attached?
Two programs that have concluded gave cash to households using different models — one as a steady flow of $500 a month over two years, and the other as a lump sum of $4,000.
In the second, program, Recovery Action Fund for Tomorrow Program (RAFT), four out of five recipients were families with children, and roughly one-fifth were older adults. More than one-fifth were identified as being at risk for homelessness.
Most of the money in that program went toward housing, the report found.
Pollard said people used the money to quickly solve problems that would have otherwise been devastating — like losing housing because they were behind on rent.
“There are people who were in precarious, unstable housing situations, were at risk of losing housing, and they chose to spend this money on rent,” she said. “A large portion of that $4,000 was spent on the rent that they needed to catch up on, and they were able to make that decision.”
The other program, San Diego for Every Child, gave money to families in low-income ZIP codes. Food, groceries, retail goods and services were the top spending categories. Likewise, in RAFT, people most often spent their money on food, even though housing was the largest expense by amount.
This points to a larger concern, Pollard said, because programs already exist to provide food aid to low-income people.
The report echoed that: “57% of RAFT participants responded they ate less than they felt they should because there wasn’t enough money for food, despite 66% of participants reporting they received CalFresh/SNAP benefits.”
The fact that people who were enrolled in CalFresh still used the cash to pay for food shows that people need food beyond what they can access with current aid programs, Pollard said. CalFresh is California’s public food aid program for low-income people
“They’re accessing the resources everyone tells them to access,” she said. “… I think we need to start with that baseline and say, OK, so people on our program are buying more food, and they’re already on CalFresh. There’s a gap there that still needs to be met. And the need for flexible cash to do that is also a supplement to that social safety net. We want to strengthen the social safety net, we don’t want to dismantle it.”
A county spokesperson noted that CalFresh is meant to be supplemental. That is baked into the name at the federal level: Supplemental Nutrition Assistance Program, or SNAP.
“CalFresh is an important supplemental food program, but not one designed to cover all of a person’s or family’s nutrition needs,” he said.
![With a growing body of research that disabuses the notion that the guaranteed income encourages frivolous spending or laziness, West said she is more likely to be queried on how a guaranteed income program can be implemented. The money can provide a cushion for those who live on the finance edge and comes without the kind of regulations and limitations of more conventional public assistance like food stamps or housing vouchers, researchers say. What the guaranteed money buys in many cases was time, West said. “When you’re very low-income, that translates into time scarcity,” West said. “You’re spending all this time navigating these systems — child care, transportation. Guaranteed income unlocks some time for you.” Some used the time for job training that led to better work, researchers have found across the country, or to spend more time with children, leading to improved school performance. In Baltimore’s pilot, preliminary results showed participants’ labor force participation increased from 64% to 71%, though their unemployment rate remained more than twice that of average Baltimore residents. With many of the programs still fairly new, it remains to be seen how long their positive effects on recipients last, researchers said. Many of the pilot plans including Baltimore’s used federal pandemic relief funds that are expiring, leaving them without a readily available source of support. West said guaranteed income is “an imprecise tool” and can’t by itself fix the underlying causes of systemic poverty, such as the legacy of “racial redlining and neighborhood segregation” that Scott has pointed to in making his case for the program. “What is very clear is the history of redlining isn’t going to be solved by guaranteed income,” West said. Particularly in red states, there are those with “a potent ideological objection” to giving free money to the poor, said Matthew Reed, executive director of the Harkin Institute for Public Policy and Citizen Engagement in Iowa. This spring, the institute was about halfway through a two-year pilot program that gives $500 a month to 110 people in the Des Moines area when the Iowa Legislature banned the use of public funds in such programs. About half of the Iowa program’s $2.5 million costs come from public sources, including municipalities in its three-county area, so those funds are being spent first, saving private money for after the new law takes effect next year, Reed said. “It was certainly frustrating,” Reed said. Rather than waiting until the project’s conclusion to have “a more honest debate” about its merits, Reed said, legislators opted to say, “We don’t care what the results are. We don’t like it.” Legislators split largely on partisan lines. One Republican lawmaker called it “socialism on steroids,” while Democrats argued that local governments should be allowed to use their funds as they saw fit. Iowa State Sen. Scott Webster, a Republican, who shepherded the bill through his chamber, called guaranteed income “a terrible waste of taxpayer money.” He disputed research that supports the program’s benefits, saying it doesn’t adequately track how recipients spend the money on the debit card as well as other funds at their disposal. “Let’s say they use $500 [of program money] on groceries. What happened to the money they used to use for groceries. Where’d that go?” Webster said. Such sentiments reflect an unfair distrust and scrutiny of poor people, said Abigail Marquez, who oversaw the guaranteed income program in Los Angeles. The city’s pilot was the nation’s largest, a $38 million effort that served more than 3,000 residents. “Based on the results from the research, we learned that people were able to seek and obtain dignified work,” said Marquez, who manages the city’s Community Investment for Families Department. Another important outcome was the time freed up for recipients to spend with children and neighbors, and on their own health and well-being. “We saw that participants were able to leave a violent home environment because of the guaranteed income,” she said. The concept has found a friendly home in deeply blue California, which has multiple programs designed to help groups that include immigrants and those exiting foster care. Legislatures in other states have, like Iowa, blocked them, although two Democratic governors, in Arizona and Wisconsin, have vetoed the measures. The Texas Attorney General sued Harris County, which includes Houston, saying its guaranteed income program violated the state constitution’s ban against giving public money to an individual. The state’s Supreme Court has temporarily blocked the program, and county officials are considering adjustments to try getting around that. To turn guaranteed income pilots into more permanent parts of the social safety net will require funding, of course, but also political will, supporters said. “If it’s a public program, it needs political support,” Reed said. “To do it at a larger scale, it’s going to require public money and public buy-in.” The first mayor-led guaranteed income pilot similar to Baltimore’s launched in 2019 in Stockton, California. Other cities followed, and researchers have found across the board that recipients use the money in ways that make sense for their families, spending it on rent, utilities and food, said Suki Samra, who directed the Stockton program and now is executive director of the mayors’ group advocating for guaranteed income. Participants are consistently more likely to find long-term employment, she said, and to get some form of education when compared to a control group. “When you remove that constant drumbeat of anxiety, of worry, folks are able to take a step back, they’re able to dream,” Samra said. “They’re able to think about what their full potential is.” Although Baltimore stopped distributing benefits at the end of July, the study of its recipients continues. Researchers are expected to release next year a final study of the program, which will include data on recipients collected up to six months after the close of the program. Then what? Scott is among those who would like to see the concept implemented on a more comprehensive, national basis. When the city’s preliminary results were rolled out in June, Scott directly addressed federal lawmakers. “This should be a national thing,” he said in a news conference. “It can be and should be and it will be — I’m going to speak it into existence — part of the solution to end poverty for good in this country.” Samra said the mayors’ group believes an expansion of the child tax credit to include cash payments to parents would be a natural progression. “We’re seeing that as the most politically feasible tool,” she said. West said people have grown increasingly comfortable with the idea of a guaranteed income. Andrew Yang made it part of his run for the Democratic nomination for president in 2020. And during the coronavirus pandemic, the federal government sent stimulus money to more than 150 million households. “We all received a guaranteed income then,” she said. She envisions cities continuing to serve as “incubators of invention,” experimenting with how to build on guaranteed income pilots and work towards a goal that should be beyond politics. Baltimore, other cities try to answer: Can a handout ease the burden of poverty, and for how long?](https://basicincometoday.com/wp-content/uploads/2024/08/breanna-klemm-1nVBujxVJXU-unsplash-225x300.jpg)
