Government assistance to households traditionally comes with restrictions. You can fill your shopping cart with potatoes, but not popsicles. Some grants are for prescription drug co-pays, not for a dental cleaning.
A shift in thinking about aid among some lawmakers and nonprofits has led to the creation of pilot programs across the U.S. where households receive cash, with no strings attached, to spend as they see fit.
San Diego County is at the forefront of these initiatives.
A local nonprofit, Jewish Family Service of San Diego, has been testing versions of this approach in four programs. Two of them awarded different amounts of money to different groups of low-income San Diegans — some who were raising families and others who were at risk of homelessness. One program, which is still ongoing, targets families at risk of intervention by the foster care system. A fourth, which is in the planning phase, will work with black women who have entrepreneurial goals.
The programs, largely funded by county, state or federal funds, have so far served more than 2,800 households in San Diego County and made cash payments totaling more than $11.7 million.
They all raise a similar question: Can cash grants, or grants combined with mentoring and guidance, help improve the economic well-being of low-income people more efficiently and effectively than other types of aid?
And New report on the programsreleased by Jewish Family Service this week, argues that “unrestricted cash support acts as a systemic buffer, providing economic security during economic downturns, helping families cope with financial emergencies and enabling them to plan for the future.”
Cash payments can also be a catalyst for upward economic mobility, the report says: “For many, having enough cash on hand makes the difference between pursuing that new business idea, booking that dental appointment, enrolling in a part-time college course or paying their monthly rent.”
The report also shares some preliminary findings. Researchers found that low-income families and individuals who received cash support used that money to pay for essential needs: food, housing, consumer goods and transportation, said Khea Pollard, director of economic mobility and opportunity at Jewish Family Service of San Diego.
While one grant program is still underway and long-term results are not yet known for two others that have concluded, these early results show that people used their cash grants to help their families, not for frivolous purchases, Pollard said.
“It’s debunking a lot of the myths and the disbelief and really the hesitation around giving cash to families,” Pollard said.
Kimberly Giardina, director of the county’s Department of Child and Family Welfare at the county’s Health and Human Services Agency, said new research about a guaranteed income pilot in Los Angeles. Its participants were better able to cover a $400 emergency, compared to the control group, and were better able to afford the food they needed.
The California Department of Social Services has seven guaranteed income pilot programs, with one more in development that will focus on seniors, she added.
“I think there’s a lot to learn about how we can use cash assistance programs to really mitigate some of the impacts of poverty,” Giardina said.
Can increased income keep at-risk families together?
Programs operated by Jewish Family Service test different hypotheses around cash payments.
The Family Income Empowerment Program, which is now enrolling participants, targets families who are at risk of interacting with the foster care system. It is part of a randomized controlled trial with the County of San Diego and Casey Family Programs, a foster care service.
Through this pilot, the county hopes to find out if cash payments are “really successful in reducing the number of families that become involved with the foster care system, because we can mitigate a lot of those factors associated with neglect, through cash assistance,” Giardina said. Another question is whether this program — an upfront investment in vulnerable families’ finances — is more cost-effective compared to foster care and other safety net programs, she added.
To find out if an unrestricted cash boost makes a difference, more than 400 families will receive $500 a month for 24 months. Participants must be referred by the county Child and Family Welfare Department, earn 200 percent of the federal poverty level or less, have at least one child living with them and be local. Because of their income level, families in this program and the others are likely already receiving government subsidies.
While guaranteed income has been widely studied, much less work has been done on the link between this type of support and reduced interaction with the foster care system, Giardina said.
“To approach it this way is really new. As far as we know, we are only the second program of this kind in the country,” Giardina said. The other is in Chicago, she added.
The study period has not ended, so it is too early to know whether it helped prevent intervention by Child Protective Services.
One early finding, however, is that people spent the grant funds on retailers, services, food and groceries. This is significant, Pollard said, because two-thirds of participants reported in an initial survey that they skipped meals before receiving these cash payments. Not having enough food can be a trigger for a malpractice investigation.
“People can be referred for a number of reasons: they don’t have food at home, they can’t feed their child, maybe their children are going to school hungry,” Pollard said.
Can money plus selected services help build wealth?
The Black Women’s Resilience Project plans to combine two types of support: monthly payments of $1,000 for 18 months, plus support for professional and personal development in the form of “mentoring, coaching, and social enterprise opportunities that help build economic mobility and wealth.”
This support will be provided in four areas: finance, health, community building and civic engagement.
In the finance category, participants will receive mentoring in entrepreneurship, finance, and professional skills. In health, they will have access to culturally competent medical care, an example of this being doulas who understand how the potential for racial bias can lead to tragic results for black women during childbirth.
“We expect to see increased food and housing security, better health outcomes” and career growth that will lead to higher incomes, the report says.
How does cash assistance help when there are no strings attached?
Two programs that have concluded provided cash to households using different models: one as a steady stream of $500 a month for two years, and the other as a lump sum of $4,000.
In the second program, the Recovery Action Fund for Tomorrow Program (RAFT), four out of five beneficiaries were families with children, and about one-fifth were older people. More than one-fifth were identified as at risk of homelessness.
Most of the money in that program went toward housing, the report said.
Pollard said people used the money to quickly resolve problems that would otherwise have been devastating, such as losing their housing because they were behind on rent.
“There are people who were in precarious and unstable housing situations, were at risk of losing their housing, and they chose to spend this money on rent,” she said. “A large portion of that $4,000 was spent on rent that they needed to catch up on, and they were able to make that choice.”
The other program, San Diego for Every Child, gave money to families in low-income ZIP codes. Food, groceries, consumer goods and services were the top spending categories. Similarly, in RAFT, people most often spent their money on food, although housing was the largest expense by amount.
This points to a bigger concern, Pollard said, because there are already programs in place to provide food assistance to low-income people.
The report echoed that: “57% of RAFT participants responded that they ate less than they felt they should because there was not enough money for food, even though 66% of participants reported receiving CalFresh/SNAP benefits.”
The fact that people who were enrolled in CalFresh still used cash to buy food shows that people need food beyond what they can access through current assistance programs, Pollard said. CalFresh is California’s public food assistance program for low-income people.
“They’re accessing the resources that everyone tells them to access,” she said. “… I think we need to start with that baseline and say, OK, people in our program are buying more food, and they’re already on CalFresh. There’s a gap there that still needs to be filled. And the need for flexible cash to do that is also a complement to that social safety net. We want to strengthen the social safety net, not dismantle it.”
A county spokesperson noted that CalFresh is meant to be supplemental. That’s implied in the name at the federal level: Supplemental Nutrition Assistance Program, or SNAP.
“CalFresh is an important supplemental food program, but not one designed to meet all of the nutritional needs of an individual or family,” she said.
Original story in SDUT:
In experiments, San Diego researchers gave cash to low-income people. Here’s what they learned.
