A Boston guaranteed income program gave payments of nearly $600 a month for two years to 50 families. By the end of the program, some families were able to buy their first home.
In August 2021, Camp Harbor View, in partnership with UpTogether, launched the Direct Cash Program, one of the largest privately funded US guaranteed income programs. The program distributed monthly payments of $583 to families considered “too rich to be poor and too poor to be rich” to improve their quality of life and give them additional resources to succeed. These families were invited to apply if they earned under $70,500 per adult household member.
According to a report released this week, participants reported being able to pay off credit card debt, drop second jobs, and devote more money to 529 college savings accounts and tutoring. The program was funded by 107 donors who collectively contributed $750,000, and it included optional workshops on topics such as taxes and investing.
“Pilot programs and studies in more than 100 cities nationally have shown that programs that offer a steady source of income for low-income or historically marginalized communities, with minimal strings attached, lead to major leaps in wellbeing and opportunity,” the report reads. “The traditional safety net is inadequate, and the growing body of evidence is clear — trusting people to make the right financial decisions for their families is an extremely effective path to success and stability.”
To be sure, short-term guaranteed income programs don’t always set participants up for long-term financial success. Some are too short to see consistent long-term results, while others may provide too little money to have significant impacts.
Boston officials have considered adopting a guaranteed basic income program for low-income residents. While some city councilors argued a citywide program could assist the nearly 19% of Boston residents living in poverty and help them find housing, others cautioned such a program would be too expensive during “uncertain economic times.” Some said the city should further look into several dozen other pilot programs nationwide, including one in Cambridge in which low-income families receive $500 per month for 18 months as part of Rise Up Cambridge.
The CHV report found that participating families were more than twice as likely to cover their household needs as the control group who did not receive monthly payments, including housing, utilities, food, childcare, medical, and transportation. Additionally, families reported a 23% decline in the risk of psychological distress, compared to an increase of 8% for families in the control group. Families said they were more satisfied with their lives than those not receiving payments.
Participating families reported more financial security than non-participants. About 45% of families saved enough for an emergency, compared to 14% of those not receiving monthly income. Families further reported a 50% increase in the ability to save, while this value declined by 44% for families not receiving payments.
With the extra payments, families were 17% more likely to pay their bills on time and had some money left over for big purchases — there was a 23% increase in purchases of a house, car, or other assets, while families not in the program reported a fall of 11%.
Sherene Blake, a participant from Dorchester, said she’s saving up more to buy a house, in addition to paying off her credit card bill and buying a new car, according to the report.
CHV said it’s preparing for a second fund that will launch in early 2024.
“The public safety net is riddled with gaping holes. The path out of inequity for Boston — and we believe for many American cities and towns — are investments in broad programs guaranteeing direct income for the families who need it, with no strings attached,” the report reads.
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