An innovative Canadian project that gave one-time cash payments to homeless people has proved a resounding success, increasing their food security and reducing their time spent sleeping rough.
The New Leaf Project, led by the Vancouver-based Foundations for Social Change (FSC), gave 50 homeless adults $7,500 in cash (US $5,870 US or €4,830). In a collaboration with the University of British Columbia, these people’s progress was then compared with a control group of 65 homeless people who did not receive any money.
After a month, the days spent homeless by the cash group dropped from 77 percent to 49 percent, with the non-cash group seeing a rise of 14 percent. Additionally, 67 percent of the cash group were food secure—a rise of 37 percent from the baseline—compared to a far smaller rise of two percent in the non-cash group. Over the course of a year, those given money moved out of homelessness at a faster rate than the control group.
The FSC published a report—Taking Bold Action on Homelessness—that argues direct cash transfers to the homeless confer ‘choice, control and purchasing power at a critical time in people’s lives.’
“[Cash assistance] is not merely a gesture of help. It is a signal that society believes in them. By preventing people from becoming entrenched as homeless, [the project] transforms lives while saving community resources that could better be spent elsewhere.
Of the total $7,500 provided, cash recipients retained around $1,000 in savings by the end of twelve months. The savings of those in the control group remained mostly flat.
The findings of this project are especially relevant, given July 2020’s COVID-19 in an Urban World briefing from the United Nations reported that worldwide, 1.8 billion people are homeless, or living in overcrowded or inadequate housing, or slum-like conditions that make social distancing especially challenging. Australia—which is taking the opposite approach with its so-called ‘cashless welfare cards’—could take a leaf out of Canada’s book.
The pandemic has impacted national economies. Job losses, widening income gaps and an acceleration of social inequalities are to be expected. If the world is to rebuild—and ideally build back better—sustainable solutions to these problems are needed. Cash assistance has long been a tool used by the UN Refugee Agency, allowing refugees to ‘meet their needs in dignity’, and the New Leaf Project is a strong indicator that cash handouts can also be used to empower the homeless.