Story at a glance
- Researchers found that those who received the money on average were able to find stable housing faster, maintain financial security and stability, and increased their spending on food, clothing and rent.
- Spending on alcohol, cigarettes and drugs fell by an average of 39 percent.
- Foundations for Social Change CEO Claire Williams said the findings were “beautifully surprising."
Preliminary findings from a new study out of Canada are pushing back against common misconceptions of social programs and those experiencing homelessness.
The “New Leaf Project” is a joint study spearheaded by Vancouver-based charitable organization Foundations for Social Change in partnership with the University of British Columbia.
Researchers behind the bold new study that kicked off in 2018 gave a one-time lump sum of 7,500 Canadian dollars — about $5,700 — to 50 people who had recently become homeless, and allowed them to choose how to spend the money while following their lives over 12 to 18 months.
A control group of homeless people who did not receive any funds was also followed by researchers conducting the study.
Researchers found that those who received the money on average were able to find stable housing faster, maintain financial security and stability, and increased their spending on food, clothing and rent.
Cash recipients spent just over 50 percent of their funds on food and rent, 15 percent on items like medications and bills, and 16 percent on transportation and clothing. Spending on alcohol, cigarettes and drugs fell by an average of 39 percent.
The study also found the funds freed up space in shelters and saved the shelter system $8,100 per person over a year.
“When I found out I had been accepted to receive the cash transfer, I was living in an emergency shelter, trying to find a way forward,” said Ray, a participant in the study, according to a statement.
“The money gave me the resources I needed to get out of the shelter and push for the social programs and the computer class I needed. It was an important stepping-stone and it gave me a choice. It gave me a chance,” Ray said.
Foundations for Social Change CEO Claire Williams told Canadian news outlet CBC that the findings were “beautifully surprising,” as people often dismiss the idea of putting money in the pocket of homeless people because they believe it will be squandered.
“It challenges stereotypes we have here in the west about how to help people living on the margins,” she told the news outlet.
It’s worth noting that the study included a relatively small sample size and participants in the randomized controlled trial were screened for a low risk of mental health challenges and substance abuse.
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