Cash Payments to People Experiencing Homelessness

Emerging studies have shown that unrestricted cash-transfer programs can effectively prevent homelessness and save more money than they cost. Cash transfer programs can be one-time payments to help avert a potential crisis and stabilize families or individuals or longer-term income payments to make housing more affordable. Previously, most government and nonprofit efforts to prevent or solve homelessness have offered goods and services like shelter, housing vouchers, food, and health care to vulnerable people to lift them out of or prevent them from falling into homelessness. While these approaches can be impactful, they carry the assumption that people in poverty don’t know what they need to survive or can’t be trusted to make decisions to help themselves (Schonfeld, Brown, Weniger, & Gordon, 2003). Recent programs focused on providing direct, unrestricted cash transfers to people in poverty accomplish two primary objectives. Cash transfers are more efficient than traditional support services; they cut out the “middleman” and save organizations money by virtually eliminating these programs’ administrative costs (Blattman & Niehaus, 2014). Additionally, these transfers remove some of the paternalistic oversight inherent in traditional philanthropic and government approaches to homelessness; they give the recipients the freedom to determine for themselves how to spend the money (Ingram & McArthur, 2018). Though the evidence for the effectiveness of cash transfers in international development is well-established, their use in preventing homelessness domestically is still being studied. Several studies have measured the effectiveness of cash transfers to people experiencing homelessness, both one-time payments to avert a crisis and long-term income payments. Initial evidence on the efficacy of these cash payments on preventing homelessness has been positive and warrants further study.

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