The financial upheaval caused by thefor millions of Americans is spurring an increase in a form of charitable giving that has proven very effective in helping people through calamity: giving them money with no strings attached.
so calledhave been launched in 40 cities across the United States under which individuals and families living near the poverty line receive monthly allowances that they can spend as they wish.
“The pandemic has really shown people that the existing economic arrangement just isn’t good enough,” said Michael Tubbs, former mayor of Stockton, Calif., and founder of Mayors for a Guaranteed Income. “People not being able to get to work because their businesses have been closed has shown that a guaranteed income is a form of economic resilience and a smart response to the pandemic.”
Such programs are on the rise as the economic fallout from the pandemic — business closures, job losses and dwindling incomes — is now exacerbated for many Americans by soaring prices for food, housing and other costs.
“Who do we give money to?”
Government programs designed to support struggling Americans during the first phase of the pandemic included federal and expanded stimulus checksin the form of monthly cash payments.
“With these injections of money, the question has changed from ‘Are we giving money to people?’ to ‘Who are we giving money to?’ which is a huge leap in the public imagination,” Tubbs said.
Mary Bogle, a researcher at the Urban Institute and an expert on programs that lift Americans out of poverty, said the pandemic has also helped shine a light on the power of direct donations.
“We saw that people who received money in this country were able to get through a serious crisis,” she told CBS MoneyWatch.
For example,provided to most low- and middle-income Americans put money in people’s pockets and reduced financial hardship, while providing a lifeline for the wider economy as consumers increased spending .
“We even saw some measures of well-being for low-income people increase,” Bogle said. “Certainly the pandemic has a lot to do with these cities starting programs.”
A bridge to a better life
In June 2021, New York’s first guaranteed income program, called The Bridge Project, enrolled 100 low-income mothers who began receiving monthly payments of $500 or $1,000. Payments will continue for three years.
Recipients approaching the first anniversary of receiving their first checks say it has helped ease their financial worries. Manhattan resident Tynisha Coleman, 31 years old, has been unemployed since the birth of his son.
“When he came, I just didn’t decide to go back,” she said of her work with autistic children. Instead, Coleman relied on unemployment and Supplemental Nutrition Assistance Program (SNAP) benefits before logging on with The Bridge Project.
Applying for SNAP benefits was “needlessly time-consuming” and “essentially a roller coaster ride,” she said. “You just have to plead your case all the time, and I feel like with Bridge Project, I didn’t have to.”
The stipend helps Coleman cover his $1,825 a month rent and pay for daycare and other necessities for his son.
Another program participant, Lisa Chin, uses part of her allowance to pay for transportation to her baby’s doctor’s appointments.
The power of money
The Georgia Resilience and Opportunity Fund, founded to address financial insecurity, recently launched a $13 million guaranteed income program called In Her Hands that will give 650 Georgian women an average of $850 a month for 24 months. It’s powered by a partnership with GiveDirectly, a non-profit organization that raised funds for the program.
Evidence that direct cash payments to families during the pandemic have been effective has helped fuel support for the program, according to executive director Hope Wollensack.
“An unprecedented number of Americans have received direct cash payment through stimulus checks or the Child Tax Credit, so we’ve started talking about cash support in new ways,” she said. . “People were experiencing firsthand the power of direct cash assistance.”
Similarly, Embrace Mothers in Birmingham, Alabama, supported by a Mayors Guaranteed Income Grant, gives 110 single mothers $375 a month for 12 months.
“We’ve seen how the stimulus payments that individuals and families have received from the federal government in response to the pandemic have lifted children and families out of poverty,” said the director of civic design for the program, Amelia Muller, at CBS MoneyWatch. “The Child Tax Credit is a stark example of what it means to give individuals the flexibility to spend money on the things that matter most and are most urgent to them. it is a platform of economic opportunity for individuals.”
Previous guaranteed income pilot programs in other cities have also shown clear gains. An analysis of the(SEED) showed that benefit recipients experienced less income volatility each month, were better able to secure full-time employment, and even saw improvements in their overall health and well-being.
Not all programs are aimed at women and mothers – some target more general segments of a city or county’s population. In Cook County, Illinois, the $42 million Guaranteed Income Pledge pilot, announced earlier this month, is the largest state-funded guaranteed income initiative in the nation. Supported by funds from the American Rescue Plan Act, it will provide 3,250 participants with $500 per month for two years.
“People move their lives forward”
Toni Preckwinkle, chairman of the Cook County Board of Commissioners, said while the concept of guaranteed income has been around for decades, the COVID-19 crisis has helped make it mainstream.
“The pandemic has brought to light the huge inequalities in this country and put more emphasis on what can be done about it,” Preckwinkle said, adding that she believes a guaranteed income can help bridge the gaps. gaps in financial security left by existing social protection programs.
“If you give people more money, it gives them economic stability. It means they can pay their rent, buy food, invest in education for themselves and their children. All the things that everyone does with their money,” she said.
In Newark, New Jersey,offers residents $6,000 per year for two years. Launched in 2021, it is supported by a mix of private and public funds from the American Rescue Plan.
Program director Kaleena Berryman said the program’s focus is in its name.
“These are the people who move forward in their lives on that extra income, whether it’s advancing their children through school or moving to a better home or a better job, advancing their education or ‘raise their credit score. The most important thing is, “Are people able to This is how we assess the impact.
For example, a former homeless benefit recipient uses his money to rent a room.
“Once he’s in this room, let’s see what he does next,” Berryman said.