Urban Wire Greater DC Region Nonprofits Created Cash Transfer Programs to Support Workers Excluded from Federal Pandemic Assistance
Sonia Torres Rodríguez
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Transferring cash directly to people who need it is an old idea. Since the early 1800’s, Black mutual aid societies have provided intracommunity support to cover health and education needs. Leaders, including Martin Luther King, Jr., have explored the idea in a public policy context, and more recently, others have proposed a universal basic income. But the idea of redistributing wealth remains controversial, in part because of unfounded fears that it incentivizes “temptation good” consumption or those with low incomes to work less.

During the pandemic-initiated economic crisis, private funders and local government in the greater DC area used direct cash transfers to help workers excluded from federal pandemic assistance for a variety of reasons. These excluded workers, who are disproportionately Asian American and Pacific Islander (AAPI), Black, and Latinx, were more likely to face unemployment and economic hardship.

Between the pandemic and the increased attention to anti-Black racism and disparities following the murders of George Floyd and Breonna Taylor, philanthropies and local governments turned to direct cash transfers as a speedy, inclusive, and equitable way to address inequities in income, employment, and housing. As the pandemic continues, it’s imperative that philanthropies and local city and state governments consider whether direct cash transfers are part of the answer in securing economic justice for families with low incomes.

Federal pandemic relief excluded thousands of workers in the greater DC region

Federal pandemic relief efforts, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus checks and expanded unemployment insurance, were not available to all Americans, and the majority of these excluded workers were AAPI, Black, and Latinx workers with low incomes.

The CARES Act did not cover undocumented people or US citizens and legal immigrants in mixed-status families until December 2020, which led to about 5.1 million US citizens and legal immigrants who were children or spouses of unauthorized immigrants waiting eight months for federal assistance. The Migration Policy Institute estimates 25,000 undocumented immigrants are living in the DC area. 

Workers who could not demonstrate income loss—such as street vendors, domestic workers, and day laborers—were also excluded from federal pandemic assistance. The National Domestic Workers Alliance estimates more than 100,000 domestic workers (PDF) are employed in private households throughout the greater DC area, but reliable estimates for the day laborer and street vendor workforce do not exist. Cash-based workers, such as sex workers, were also excluded because their participation in the informal cash economy is ineligible for unemployment insurance coverage. Although we generally lack accurate data on sex workers’ experiences, the community-based organization Helping Individual Prostitutes Survive (HIPS) estimates that there are at least 100 sex workers in DC.

Workers unemployed before the pandemic, including citizens who had been unable to obtain a job after recent incarceration, were also excluded from federal measures. In the DC area, there are between 1,800 to 2,200 returning citizens released each year by the Federal Bureau of Prisons. 

Combined, the exclusion of these workers creates a large gap in federal assistance coverage and contributes to the income and racial wealth gaps. Additionally, the delay many experienced before receiving assistance has dwindled savings and worsened families’ economic precarity.

Direct cash transfers as an equity-based solution

Covering the basic needs of the workers excluded from federal assistance demands a speedy alternative, which direct cash transfers provide.

A variety of new cash transfer programs arose as a result of local advocacy. The Greater Washington Community Foundation has facilitated multiple direct cash transfer efforts during the pandemic, including the DC Cares Program, which was inspired by the advocacy of DC’s Excluded Worker Coalition, which includes more than 60 nonprofit partners. On average, these programs distributed one-time, $50–$2,500 prepaid debit cards to excluded workers with low incomes, providing $26 million in total funds and engaging 60,000 greater DC residents.

Direct Cash Distribution Facilitated by the Greater Washington Community Foundation during the COVID-19 Pandemic

Approximate amount of cash transferred and people reached via each fund and program

ProgramAllocated funds ($)People engaged
DC Cares, phase 15.15 million5,250
DC Cares, phase 28.10 million8,100
Fairfax County Excluded Workers Program1.10 million~1,227a
Montgomery County Emergency Assistance Relief Payment10 millionn/aa
Neighbors in DIRE Need680,0001,776
BMC Cares1.05 million530
COVID-19 Emergency Response Fundn/aa43,864
Totalb~26 million~60,000

Source: Bogle, Mary, and Sonia Torres Rodríguez, Direct Cash Transfer as a Vehicle for Speed, Inclusivity, andEquity (Washington, D.C.: Urban Institute, 2021).
Notes: BMC Cares = Bernstein Management Corporation.
a Values are missing or estimated because of data collection challenges associated with rapid response and flexible reporting requirements.
b Total excludes missing values.
 

Evidence suggests this model ameliorates needs during a crisis, especially in conjunction with expanded eligibility for federal assistance programs and nonprofit services. But even outside a crisis, local philanthropists and policymakers can work to alleviate the disproportionate precarity certain workers face. As the pandemic continues, direct cash transfers can be a part of the solution to assist families with low incomes, providing these families enough stability to begin overcoming poverty.

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Research Areas Greater DC
Tags COVID-19 Homelessness