An experiment gave homeless people a lump sum of cash, no strings. Most went to rent and food.
In a groundbreaking experiment conducted by the New Leaf Project in Vancouver, homeless individuals were given a lump sum of CAD 7,500 with no conditions attached. The outcomes defied common stereotypes: recipients primarily spent the money on essentials like rent and food, leading to quicker transitions into stable housing and increased savings. Notably, there was a 39% decrease in spending on alcohol, cigarettes, and drugs, challenging the prevailing assumption that cash transfers to the homeless would be squandered on such items.
The study, meticulously vetted and published in the Proceedings of the National Academy of Sciences, highlights a critical insight: direct cash transfers can be an effective, dignified tool for helping those who have recently become homeless. By addressing the immediate financial barriers, the experiment helped participants stabilize their lives, demonstrating that with the right resources, individuals are inclined to make prudent choices. This approach not only aids recipients but also offers systemic savings by reducing reliance on shelters, suggesting a scalable, economically sound model for tackling homelessness.
Constructive analysis
The constructive-journalism lens: not just what happened, but what works.
- The problem
- The challenge of effectively addressing homelessness with dignity and efficiency.
- The actions
- The New Leaf Project provided unconditional cash transfers to recently homeless individuals as a means to facilitate their transition back to stable housing.
- Evidence of progress
- Participants spent fewer days homeless, moved into stable housing sooner, and saved more money, with a 39% decrease in spending on substances.
- What we can learn
- Direct cash transfers can be a cost-effective, dignified approach to support those recently homeless, reducing reliance on shelters and shifting public perceptions about financial responsibility.
PERMA wellbeing profile of this story
Seligman's five pillars of wellbeing, as expressed in this story.
- Positive Emotion
- 8
- Engagement
- 9
- Relationships
- 7
- Meaning
- 9
- Accomplishment
- 8
Character strengths in play
Top VIA strengths this story embodies.
Hope
Ray expressed his aspiration to 'give back to where I've came from' and become 'an important person that has a powerful voice.'
Gratitude
Ray's decision to use part of his cash to take a computer course and help others with addictions reflects his appreciation for the opportunity to change his circumstances.
Courage
The study's design itself was a bold challenge to societal assumptions about homelessness and financial responsibility.
Try this today
Reflect on a personal stereotype you hold about a group of people. Challenge this by seeking out stories or examples that contradict your assumption, much like the New Leaf Project did with perceptions of homelessness.