In Denver, a $10 million initiative was launched in 2021 to explore the efficacy of guaranteed income, combining private donations and $4 million from the city.
The Denver Basic Income Project aims to test the impact of such payments on individuals experiencing homelessness.
How the Denver Guaranteed Income Project was Implemented
The process began by collaborating with local nonprofits to identify eligible participants who were homeless but did not have severe, unaddressed substance abuse or mental health issues.
Participants were selected to mirror the racial and gender demographics of the homeless population, ensuring representation from various minority groups.
Participants were divided into three groups:
- Group A: Received $1,000 monthly.
- Group B: Received an initial $6,500 and then $500 monthly.
- Group C: Control group, received $50 monthly.
The funds were primarily used for basic needs such as transportation, hygiene products, groceries, housing, healthcare, and paying off debt.
The program underscored that recipients of unconditional cash transfers utilized resources just as housed individuals do, focusing on essentials and aiming for stability.
Findings and Insights
The study recorded considerable improvements in housing stability, demonstrating that around 45% of participants transitioned to their own apartments or houses within a year.
All three groups displayed reductions in the need for public services like emergency rooms and shelters, indicating potential cost savings for public funds.
Financial well-being among participants improved, with a notable rise in full-time employment rates.
Other aspects such as sleep quality, food security, anxiety levels, parenting stress, and access to transportation were also monitored, with the full qualitative and quantitative data available online.
Observational data suggested a promising reduction in the instances of homelessness as participants received ongoing payments. This signifies that consistent financial support was instrumental in providing a sense of stability and hope, leading to more positive long-term outcomes.
Future Directions for Denver’s Guaranteed Income Initiative
The project has been extended for a second year with an additional $2 million from the city. The intention is to secure funding for a third year while also replicating the study in other cities to assess scalability.
Other cities are also exploring basic income experiments, yet Denver’s stands out due to its scale.
Securing sustained funding remains a challenge, with the program needing another $2 million to complete the second year and $8 million for the third year.
There is a broader vision to incorporate guaranteed income into public policy.
Mark Donovan, the founder of the Denver Basic Income Project, emphasizes that the first year delivers a foundation of stability, and continued support could drive more transformative changes.
He highlights the significance of extending financial aid beyond short-term assistance to observe the compounded benefits over time.
