One of the old adages people say is that giving money to the homeless is a waste because they'll just indulge the vices that lead them to be homeless in the first place. But a new study has found that giving people cash actually helps people find a way out of homelessness much easier.
A study out of Canada gave 50 recently homeless people a lump sum of 7,500 Canadian dollars (nearly $5,700) and followed them for 12-18 months alongside another control group that weren't given anything. The 115 participants in the randomized controlled trial were between the ages of 19 and 64, and they had been homeless for an average of 6 months. Participants were screened for a low risk of mental health challenges and substance abuse.
The preliminary findings, which are still up for peer review, were able to find stable housing, whereas the control group lagged behind 12 months in their effort to find a place to live. The group given money were also able to find food stability at a rate of 70% higher than the control group. Finally, the group who received the money spent 39% less on drugs, liquor, and cigarettes.
"The homeless population continues to grow, and we keep applying the same old approaches," said Claire Williams, the CEO and co-founder of Foundations for Social Change.
"We really think it's important to start testing meaningful risk-taking in the name of social change," WIlliams added.
"One of the things that was most striking is that most people who received the cash knew immediately what they wanted to do with that money, and that just flies in the face of stereotypes," Williams told CNN
"People very much know what they need, but we often don't equip them with the intervention or the services that really empowers them with choice and dignity to move forward on their own terms," Williams said.
Direct cash transfers are not "a silver bullet for homelessness in general," and the program focused on "a higher functioning subset of the homeless population," Williams said. "There are these hidden impacts that we just don't anticipate and aren't necessarily quantifying, but now we're seeing that this is having an exponential effect on people's lives," Williams explained.
In addition, there are benefits to the taxpayer. Rreducing the number of nights spent in shelters by the 50 study participants who received cash saved approximately 8,100 Canadian dollars per person per year, or about 405,000 Canadian dollars over one year for all 50 participants.
"There's a common misconception that the cost of doing nothing is free or cheap and it absolutely is not," Williams said.
This study has been vital in the era of the pandemic, where people are losing housing due to job loss.
"We're hearing that from homeless providers in a lot of places, people who have never been homeless before are coming into shelters and have no idea what to do," Steve Berg, a vice president with the National Alliance to End Homelessness, an American nonprofit organization, told CNN.
"It's a brand new experience for them, and they never dreamed that when they'd be talking about homeless people they'd be talking about themselves," said Berg, who was not involved in The New Leaf Project study.
"There are certainly people who are homeless who have deeper, more severe problems," Berg explained, "but for many people, it's simply a matter of -- they ran out of money, lost a job, fell on hard times, became homeless. Once they're homeless, it's very difficult to get enough money saved up in order to find a place to live."
"People can be relied on, if they get the money upfront, to take care of the problem themselves," Berg added.