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.
