Vancouver New Leaf Project Study Shows One-Time Direct Cash Transfers Positively Impact Homeless
James faced the challenges and frustrations of being homeless in Vancouver (Source: New Leaf Project)
BY Rich Weiss & Jeneane Vanderhoff
Thousands of people experience homelessness in Cleveland and Akron every year. But what if these people were given money? Money that they could use to dig their way out of poverty and turn a new leaf?
When the Poverty and Homelessness Beat Reporter for The Tremonster, Jeneane Vanderhoff (currently experiencing homelessness along with her husband, Adam), was considering reporting on any existing solution that might help alleviate the problem of homelessness in Northeast Ohio, she said, “I read a study—I think it was Canada—they just recently gave homeless people $7,500 and saw how the people spent it. It basically got them out of homelessness. It did quite a bit to turn their lives around; they really didn’t waste the money—it’s a recent study.”
Our research led us to The New Leaf project in Vancouver, Canada, which recently published the study Vanderhoff had noticed. The Vancouver-based project demonstrated that money from one-time cash transfers was spent wisely and provided stability in the lives of individuals recently experiencing homelessness.
Co-Author Jeneane Vanderhoff and her husband Adam.
In Northeast Ohio, our homelessness statistics reflect an alarmingly large problem for our region’s population and economy. The Northeast Ohio Coalition for the Homeless (NEOCH, which supports The Cleveland Street Chronicle, a NEOSOJO member outlet and partner on this report) published census data citing about 23,000 people experiencing homelessness in 2018 in Cuyahoga County, and Akron Citizens Coalition for Emergency Shelter Services (ACCESS, Inc.) published data from the Point in Time count, which found 546 homeless individuals in Summit County on one night in January 2019. In a 2017 study, the National Alliance to End Homelessness found a chronically homeless person costs the tax payer an average of $35,578 per year, and a homeless person in supportive housing costs on average $12,800 per year. Vanderhoff was curious if the solution in Vancouver could be applied to help reduce homelessness in Northeast Ohio. In January, we were able to reach Claire Williams, the Co-founder and CEO of Foundations for Social Change, which launched the New Leaf project.
Jeneane Vanderhoff: Claire, could you start off with a basic explanation of the New Leaf project for us?
Claire Williams: The New Leaf project was the world’s first randomized, controlled trial to test the power of direct cash transfers with people experiencing homelessness. What that looks like is we gave 50 people who were recently homeless a one-time cash gift of $7,500. That amount was benchmarked against the 2016 income assistance rate (or the welfare rate, I think you call it in the United States)—so, people basically got a year of income assistance in a one-time lump sum, which was directly deposited into a no-fee checking account with our local credit union. Then, we collected data on people over the course of 12 months to two years, depending on when people were enrolled. What we saw is that—very quickly—people in the cash group moved into stable housing faster, they spent fewer days homeless, they retained over $1,000 through 12 months—which is incredible in a place like Vancouver, in the Lower Mainland, it’s really expensive to live here. We saw that there was an increased spending on food, clothing, rent, and that people were achieving greater food security. Then, what I call the darling of our data set: we saw that people made wise financial choices with the money, so we saw a reduction by 39% in spending on drugs, alcohol, and tobacco. I call this “The darling of our data set” because it just flies in the face of the mainstream cultural narrative around people living in homelessness or poverty that they can’t be trusted to make wise financial choices, where in fact our data shows that is not the case.
In Canada, when the pandemic hit, we, as a federal government, offered everybody initially $2,000 a month, which, to me, communicates that’s the bare minimum you need to exist in society, so why are our governments not providing that support? Poverty is not cheap. It’s not free to maintain the status quo, it’s incredibly expensive, and that’s on top of the human suffering.
What we love about direct cash transfers is that they are an elegant and simple approach to poverty reduction and, in this case, ending homelessness—we’re empowering people to move beyond homelessness. We privately fundraise the dollars and we can put money into people’s hands very quickly.
Vanderhoff: Did you see an increase in Vancouver homelessness with the COVID-19 pandemic?
Williams: I have not seen any numbers, Jeneane, but absolutely—there’s no way that we are not seeing an increased number of folks entering homelessness. I know just from news reports that a number of people are living in economic precarity in Canada. I know it’s more expensive to get groceries now, so when people are facing reduced working hours or full unemployment altogether, we’re just going to see people entering homelessness more often. I haven’t seen any proven statistics yet, so it’s more anecdotal and a hunch as opposed to anything I’ve seen in the news.
Vanderhoff: Do you think that your country’s perspective on homelessness differs from our perspective on homelessness? I personally experience homelessness—I’m still in the midst of it—I came from a middle-class family, I’m 40 years old, I went to college, and then to see how people looked at me and treated me…I felt so at home when reading on your website that you’re doing something like this, I’m just so amazed that I just want to thank you. Do you feel Canadians see homeless people in a different way than we do in the United States?
Williams: I absolutely do not. No. First of all, I want to acknowledge what you shared, and I’m sorry for those experiences. It’s hard. I know, just from the folks we’ve talked to, when you are experiencing homelessness, people often feel invisible, they feel like they’ve had their dignity taken away, so I just want to express my heartfelt compassion for that experience. Do I think that Canadians regard homelessness differently than our American brothers and sisters? Absolutely not. I think it’s natural, when you first tell people you’re going to hand out a large sum of cash, people are a little bit in shock. I try to empathize with people who are initially like, “You can’t just give away money!” Then we have a conversation and I say, “Actually, you can.” And on top of reducing suffering and empowering folks to move beyond homelessness, it actually saves money. So, why the heck aren’t we doing this?
For more information about Foundations for Social Change or the New Leaf project which demonstrated the power of cash-transfers to provide stability to the lives of people experiencing homelessness in Vancouver, visit https://forsocialchange.org/new-leaf-project-overview.
This story was sponsored by the Northeast Ohio Solutions Journalism Collaborative (NEOSOJO), which is composed of 20-plus Northeast Ohio news outlets including The West Park Times, The Cleveland Street Chronicle, and The Tremonster, each of which contributed significantly to this report.