Study shows direct cash transfers may help solve homelessness

Organization calculates that cash transfer recipients saved shelter system $8,100 per person

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VANCOUVER, British ColumbiaA recent study concluded that cash transfers provided to recently homeless individuals had a direct impact on financial stability and provided relief to the shelter system by empowering individuals.

The New Leaf Project, conducted by the Foundations for Social Change, a Vancouver-based charitable organization, in partnership with the University of British Columbia, provided a one-time lump sum direct cash transfer of $7,500 to 50 people who had recently become homeless.

According to the organization, recipients chose how to best spend the funds and found that over a 12-month period, they increased their spending on food, clothing and rent.

The organization calculated that, on average, the cash transfer recipients saved the shelter system $8,100 per person over the course of the year for a total savings of $405,000.

Claire Williams, CEO of Foundations for Social Change, said the organization wanted to illustrate the viability of direct cash transfers to impact change.

“To prevent people from becoming entrenched in homelessness, we need to provide meaningful support as close to the time of becoming homeless as possible,” Williams said in a statement. “Our research shows that cash transfers allowed people to access housing faster, improving stability and lowering the risk of trauma.”

Jiaying Zhao, the study’s principal investigator and a UBC professor, said that the study was based on people who received direct cash transfers and individuals who did not receive outside support.

“To receive a direct cash transfer, participants had to meet criteria that showed no misuse or abuse of substances,” Zhao said. “These individuals also demonstrated no major symptomology for mental health disorders, and showed a readiness for change.”

The organization said that by “empowering individuals to meet their own needs, research shows that participants reduced spending on goods such as alcohol, cigarettes, or drugs, spent fewer days homeless, and achieved greater food security.”

To learn more about the study and the study’s parameters, click here.

Watch some of the participant’s experiences below:

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About the Author:

Jakob Rodriguez is a digital journalist at KSAT 12. He's a graduate of Texas State University, where he served as the editor-in-chief of the student-run newspaper, The University Star.