An experiment to see how no-strings-attached cash payments will change the lives of people who are homeless in Denver is showing some promising results, according to the project’s organizers.
The Denver Basic Income Project has handed out more than $5 million to 846 people since November, an attempt to help people make changes that would get them closer to stable living. Six months in, participants reported that they’ve used the money not only for basic needs such as transportation and groceries, but for life-altering items including housing and cars.
The more than 800 people, selected while they were living on the streets, in shelters, on friends’ couches or in vehicles, were separated into three groups. One group receives $1,000 per month for a year. A second group received $6,500 the first month and gets $500 for the next 11 months. And a third group, the control group, receives $50 per month.
At first, many of the people approached with the offer assumed it was a scam.
“They didn’t believe it was real,” said Maria Sierra, community engagement manager for the project.
The project is funded by a mix of public and private money, including $1.5 million from The Colorado Trust and $2 million from the City of Denver’s pot of federal pandemic relief money. The University of Denver’s Center for Housing and Homelessness Research is collecting personal stories from the participants and studying the outcomes of the project, with a more comprehensive analysis expected in late October. (The Colorado Trust funds a reporting position at The Colorado Sun.)
The research does not include finding out what happens to people after the year is up and the cash payments stop, though that is a concern for project organizers, said Daniel Brisson, executive director of the DU center and the project’s lead researcher.
“We are aware that there is a very potential cliff effect, meaning that after 12 months people who are receiving cash may experience some real drop in positive outcomes,” he said. “That’s deep in mind for us.”
The hope is that the project will receive additional funding and the payments could continue beyond 12 months for people who need it. Organizers also want to expand the program to more people who are homeless in Denver, as well as other areas of Colorado.
Project founder Mark Donovan said he hopes to work with new Denver Mayor Mike Johnston, who declared a homelessness state of emergency on Tuesday, his first full day in office, to find a sustainable funding source for the project. He said he is also meeting with Colorado’s U.S. Sens. John Hickenlooper and Michael Bennet, both Democrats. Nationwide, there are about 100 cash-assistance pilot projects, though Denver’s is unique because it’s providing the payments exclusively to people who are homeless.
People were eligible to apply for the project if they were homeless and had no unaddressed mental health or substance abuse issues. They were referred by 19 community organizations that already work with the homeless population, including the Colorado Coalition for the Homeless, which signed up more than 150 of the participants.
Some of those people were living outside or in shelters or motels, while others were doubled up with family members or friends, said Cathy Alderman, the coalition’s public policy officer. She said the coalition invited people who visited its Stout Street Health Center to apply for the payments. That news brought several new clients into the clinic who previously hadn’t been receiving services.
Many of the participants were burdened by debt and financial struggles. “Imagine that feeling, day after day after day, sometimes for years, and then suddenly being given the opportunity to have that lifted,” she said.
“That’s what we want to see because we want people to have the opportunity to make decisions about their life, not to just survive.”
Besides being able to pay bills, participants reported that they were able to spend more time with their children and grandchildren and spend some money on things that brought them joy. “Which is a really big deal,” Sierra said. “We kind of put that to the side when we’re struggling.”
Project organizers have not yet released numbers showing how many people who were homeless were able to find housing or enroll in job training after receiving the payments. Those details are expected in the fall.
Participants receive loaded debit cards or, if they have bank accounts, can have the cash deposited. The group was selected to match the demographic makeup of the city’s homeless population, including those in shelters, cars or couch surfing — 67% of participants are people of color, 49% are women, nonbinary or transgender, and about 23% are families with at least one child.
Among the 846 are 39 participants who received payments in 2021 as part of a “soft launch” of the project.
Donovan, the project director and founder, said he was thrilled that 92% of participants agreed to participate in the research study, even though that was not required to receive the money. They were given phones or stipends to pay their phone bill in exchange for participating in regular check-ins and interviews. Researchers have been able to collect data from 75% of the participants, he said.
“It was truly unconditional,” Donovan said. “We started from a place of saying, ‘We believe in you. We trust you. And we’re going to give this to you unconditionally.’”
One participant was a client of Servicios de la Raza, which helps people access social services and mental health care. She is part of the group of participants receiving just $50 per month, but the support reportedly added to her positive outlook.
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Servicios helped her find a bed in a sober-living home and sign up for a job training program to become an asbestos removal supervisor.
“Within two weeks, she had a job making more money than I do,” said Nick Pacheco, program coordinator for Servicios. “Let me just say that she’s doing really well. She’s thriving in the community right now, and she is very grateful to this program.”