- A charitable organization helped homeless people turn their life around by giving them $7,500 each.
- The cash recipients were able to control their spending compared to non-recipients.
- The project showed that the direct cash aid saved the state of British Columbia an average of $600 per person, compared to providing a year of emergency services.
Most people tend to avoid giving money to homeless people, thinking that they might just spend it on vices such as drugs or alcohol.
The New Leaf project, a Vancouver-based charitable organization, challenged these stereotypes by giving the homeless people in Canada financial aid to turn their life around.
The project involved 115 homeless people who did not have serious mental or substance abuse problems. They then gave 50 of them $7,500 each to see how they would fare.
The study yielded promising results.
After a year, most of the beneficiaries held on to about $1,000 in savings. Around 67% of them were able to continue feeding themselves.
Among the recipients, the average age was 42. The average length of homelessness was six months. About 1 in 4 was employed, and around 1 in 3 reported having a child.
The study involved monthly and quarterly self-reported surveys to monitor the recipients’ conditions and expenses.
The study suggests that the beneficiaries recognized that this opportunity could help them turn their life around.
The allowance recipients controlled their spending compared to non-recipients: they reduced their spending on drugs or alcohol by an average of 39% and were able to move into housing two months faster than non-recipients, according to an impact report done by the Foundation for Charitable Giving.
The recipients made the most of their allowance throughout the year. About 52% of their expenses went to food and rent and 15% went to transportation and medication. They spent an average of $700 on one-time cash purchases like a computer or bike.
The study concluded that providing $7,500 to homeless people saved the state of British Columbia an average of $600 per person, compared to providing a year of emergency services.
The report explained, “By spending fewer nights in shelters, the cash group saved the shelter system approximately $8,100 per person for a total of roughly $405,000 over one year. Factoring in the cost of the cash transfer, that’s a savings of $600 per person for society.”
A recipient shared that the allowance provided them the hope and foundation they needed to start over.
Another recipient told CBC News that the money allowed him to take a computer course that set him on his dream career path. He has since become a community counselor for those with substance addictions.
A policy suggestion based on the project’s data stated, “Cash transfers provide choice, control, and purchasing power at a critical time in people’s lives. This is not merely a gesture of help. It is a signal that society believes in them.”
“By preventing people from becoming entrenched as homeless, NLP transforms lives while saving community resources that could be better spent elsewhere.”
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Source: Good News Network