Insights from a DC Cash Relief Program Can Inform Discussions about Federal Cash-Based Policies
Public awareness for cash-based social policies was growing before the COVID-19 pandemic, and public support for them has proliferated since the pandemic first started to roil the US economy in March.
During the presidential campaign, nearly 400,000 people signed an online petition calling on Joe Biden to support a program like universal basic income (UBI) during the pandemic. By early April, more than 250 community groups, nonprofits, philanthropists, and local government agencies (PDF) across the country had partnered with the #GiveTogetherNow campaign to raise and distribute dollars for COVID-19 relief. By November, Andrew Yang’s Humanity Forward foundation had delivered nearly $10,000,000 in cash relief to more than 20,000 American families affected by the COVID-19 pandemic.
Though a majority of Americans still oppose UBI, a recent Pew Research Center survey showed that the gap is closing and that 45 percent of Americans would support a universal basic income of $1,000 per month for all Americans.
The Urban Institute is evaluating THRIVE East of the River, which, based on our preliminary scan of the field, appears to provide the largest payment of short-term private emergency cash relief ever offered in the US. Since July, THRIVE has delivered just under $2 million in cash to 353 households in Washington, DC’s Ward 8, where most residents are Black and one-third have incomes below the federal poverty level. THRIVE aims to allocate $5,500 to at least 400 families, if not more, by early next year. Households can choose to receive the cash as a single payment or in five equal, monthly installments. THRIVE’s single-payment option exceeds other privately funded COVID-19 and hurricane relief efforts, which typically pay out about $1,500 (PDF) or less. Its monthly payment option of $1,100 is similar to what is offered by a few of the country’s more well-known guaranteed-income efforts such as the Magnolia Mother’s Trust in Mississippi, but THRIVE’s relatively short payment period means THRIVE participants will receive a smaller total amount than participants in these longer-running demonstrations.
As part of a series featuring updated findings on THRIVE, we’re lifting up a few insights on the benefits of cash-based social policy we’ve learned through our evaluation.
- Cash delivers fast results. Our social insurance and safety net failed to keep pace with the pandemic. Many Americans, especially Black Americans, who lost their jobs have had trouble accessing unemployment insurance (PDF) and have experienced sustained food insecurity, especially among families with children. Early stimulus checks and later, private efforts like THRIVE’s have been able to fill some gaps. The federal stimulus checks of $1,200 per adult plus $500 for children younger than 17 authorized back in April likely kept 8.3 million Americans from falling into poverty by year’s end. Our analysis suggests just one more similar payment would have kept another 6.3 million out of poverty in the final five months of 2020 and would have substantially reduced projected poverty, particularly among Black and Hispanic people.
- Cash is flexible enough to meet need as it arises. THRIVE values treating participants with respect. Participants make their own decisions about how to spend the money. In contrast, safety net programs require people with low incomes to surmount numerous eligibility restrictions and other barriers. (PDF). Because of largely inaccurate public perceptions that recipients will spend cash benefits on illegal drugs or gambling, programs like the Supplemental Nutrition Assistance Program are designed to restrict people to accepting help “in-kind” for basics like food, when it may be rent, car repair or a utility payment they need to keep their lives intact.
- Cash offers great promise for closing disparities. Households of color have been disproportionately affected by the economic hardships brought on by COVID-19, which is exacerbating existing health and economic disparities. A key THRIVE goal is to help Ward 8’s households maintain stability during the pandemic since Black households are slower to recover from large economic setbacks due to longstanding systemic discrimination.
A range of cash-based policy options are being discussed around various tables. Deliberations about providing additional coronavirus aid (likely additional unemployment benefits, but not necessarily another stimulus check) look promising, but Congress has yet to strike a deal. Meanwhile, the Movement for Black Lives, a network that includes Black Lives Matter, endorsed a guaranteed-income proposal called Universal PLUS Basic Income, which would take funds out of our broken prison system to provide a small cash allotment to everyone, with a prorated additional amount for Black Americans.
So far, insights from efforts like THRIVE can contribute evidence to any discussion of how cash infusion might alleviate crisis, reduce income inequality, and advance equity. Anecdotal data already tell us some THRIVE participants are using their cash payouts to keep roofs over their heads, start small businesses, and maintain hope of getting through the pandemic without falling further into economic distress. We look forward to sharing more formal data on outcomes in our series highlighting lessons from THRIVE over the coming months.