Around 800 people experiencing homelessness in Denver began receiving direct cash payments in December, ranging from $50 to $1,000 per month for a year. The payments are part of the Denver Basic Income Project (DBIP), a program that gives direct cash, no strings attached, to people in need.
Three months into the program, staff interviewed 24 participants. They talked about being able to shelter in a motel, put food on the table, secure housing and pay off debt. Others talked about saving for the first time, purchasing a car and supporting their children.
"It's frustrating to not have anything to give," said one unnamed participant in an initial report released by DBIP Wednesday. "I think that's the hardest part of poverty. Not only are you seen as without value -- you also don't have that kind of value to contribute to other people's lives, and it's frustrating. I wouldn't have been able to do those Christmas gifts without DBIP."
A lot of public benefits money comes with transaction tracking and restrictions on purchases. Universal basic income programs, which many cities across the country are trying, take a different approach: trusting people in need to know what they need best.
The program in Denver was founded by resident Mark Donovan and funded through a mix of private donors, foundations and city funding. It got off the ground with its first cohort last fall. The program partnered with nonprofits to help people apply, then chose a group that represents the demographics of people experiencing homelessness in the city.
As the first initiative of its kind in Denver, DBIP participants can opt-in for a research study through the University of Denver (DU), which is measuring the effects of universal basic income on people in need. While staff are still working on quantitative results, DU and DBIP released its first qualitative research report Wednesday.
Interviews with participants showed "significant benefits" to direct cash payments, according to the report.
"What strikes me the most about the report's findings is the sense of hope described by so many program participants," said Cathy Alderman, chief communications and public policy officer for Colorado Coalition for the Homeless, in a statement Wednesday. "That sentiment is often missing from the community we serve, but to see how people are now making plans for the future is truly encouraging."
Participants used the money for a wide range of needs. One group is receiving $1,000 monthly, while another received $6,500 up front and then $500 monthly, both totaling $12,000 over the course of a year. A third control group receives $50 per month.
The report said that comparing interview outcomes with the control group showed how significantly the larger sums helped people. Participants receiving $50 per month said the money "comes in handy," while those receiving the full $12,000 over time often called the money a "godsend."
Some participants talked about initially thinking DBIP was a scam, and that their inclusion in the program created tension with friends not in the program. But many quoted in the report talked about strengthening relationships with family, decreased stress and added hope.
"It's going to rent, to my car, to be able to afford living," said one participant in the report. "To be able to go to this little program I'm going to for 22 weeks [of job training], to be able to make 50-60k a year. For me, that's living life. That's where I need to be. [...] Right now, the way I'm striving, I just feel proud. There's nothing that can take this away from me. I have a serious tunnel vision goal just to get these classes finished."
The report also showed that many of the people who obtained housing using the cash were already involved in support programs.
Because of Denver's housing crisis, the money was most helpful in securing homes for people already on waitlists. For example, one person used the cash to pay off debts in order to get accepted into subsidized housing.
While the cash came without strings attached, it did affect public benefits for some recipients. When income goes up, people using programs like SNAP or housing assistance often see benefits reduced and rent costs increased. Some participants talked about choosing the cash assistance knowing they would see other assistance reduced.
Program staff also worry about a "cliff effect," or an end to positive outcomes once the cash assistance ends in the fall.
"We have well established data that shows that there is a cliff effect, and so what we would like to do is to try to sustain this type of programming as long as possible so that we can learn what happens if you do not have to face that," Donovan said.
But the future of the program beyond year one is unclear. Donovan said DBIP is looking into a potential second year and adding more participants, but that will depend on additional funding. In addition to private funds, DBIP is currently receiving $2 million from the city through federal pandemic recovery funds. Denverite reached out to Mayor Mike Johnston about whether the city might continue to support the program.
For now, DBIP will continue giving out cash payments through October, and it plans to release a full report of research findings at the end of the program in the fall.
