| Hey readers, This week, I talked to Ray, a 55-year-old Indigenous man in Vancouver, Canada. He used to live in an emergency homeless shelter. But over the past year, he's been able to afford a place to live and is training for his dream job — in part because he participated in a study called the New Leaf Project. The study — conducted by the charity Foundations for Social Change in partnership with the University of British Columbia — was simple yet bold. It identified 50 people in the Vancouver area who had become homeless in the past two years. In spring 2018, it gave them each one lump sum of $7,500 (in Canadian dollars). And it told them to do whatever they wanted with the cash. Over the next year, it followed up with them periodically, asking how they were spending the money and what was happening in their lives. Because they were participating in a randomized controlled trial, their outcomes were compared against those of a control group: 65 homeless people who didn't receive any cash. The results? The people who received cash transfers moved into stable housing faster and saved enough money to maintain financial security over the year of follow-up. They decreased spending on drugs, tobacco, and alcohol by 39 percent on average, and increased spending on food, clothes, and rent, according to self-reports. "Counter to really harmful stereotypes, we saw that people made wise financial choices," Claire Williams, the CEO of Foundations for Social Change, told me. The study, though small, offers a counter to the myths that people who become poor get that way because they're bad at rational decision-making and self-control, and are thus intrinsically to blame for their situation, and that people getting free money will blow it on frivolous things or addictive substances. Studies have consistently shown that cash transfers don't increase the consumption of "temptation goods"; they either decrease it or have no effect on it. Plus, according to Foundations for Social Change, giving out the cash transfers actually saved the government money. By enabling 50 people to move into housing faster, they saved the shelter system $8,100 per person over the year, for a total savings of $405,000. "People think that the status quo is cheap, but it's actually incredibly expensive," Williams said. "So why don't we just give people the cash they need to transform their lives?" Williams developed the idea for the New Leaf Project when her co-founder sent her a link to a 2014 TED talk by the historian Rutger Bregman, titled "Why we should give everyone a basic income." It argued that the most effective way to help people is to simply give them cash. The general idea behind basic income — that the government should give every citizen a monthly infusion of free money with no strings attached — has gained momentum in the past few years, with several countries running pilot programs to test it. And the evidence so far shows that getting a basic income tends to boost happiness, health, school attendance, and trust in social institutions, while reducing crime. Recipients generally spend the money on necessities like food, clothes, and utility bills. But Williams and her collaborators decided that rather than give people monthly payments, they'd give one big lump sum. "The research shows that if you give people a larger sum of cash upfront, it triggers long-term thinking," as opposed to just keeping people in survival mode, she explained. "You can't think about maybe registering for a course to advance your life when you don't have enough money to put food on the table. The big lump sum at the front end gives people a lot more agency." That's what it did for Ray. In addition to getting housing, he used the cash transfer to take the courses he needed to become a frontline worker serving people with addictions. "Now I can work in any of the shelters and community centers in the area," he told me, adding that receiving a cash transfer had felt like a vote of confidence. "It gives the person their own self-esteem, that they were trusted." Next, Foundations for Social Change is trying to raise $10 million to scale up its cash transfer approach. It hopes to work with other populations, like people exiting prison and people exiting sex work. To Williams, the time feels ripe. "I think the pandemic has really softened people's attitudes to the need for an emergency cash payment when people fall upon hard times," she said. Although the study's findings seem promising, a peer-reviewed publication detailing the methodology isn't available yet, so we shouldn't leap to conclusions. Plus, it's worth noting that cash on its own probably isn't enough to end homelessness. "While I have no problem with providing cash to people who need money, the solution to homelessness is housing," Gary Bloch, a Canadian doctor who helps people who are homeless access housing, told me. "Especially in a city like Vancouver where housing supply is low and rents are astronomical, it will be very hard to sustain a homelessness intervention without offering long-term affordable housing." That said, Bloch added, "If this study serves to counteract some people's perception that people who are homeless and/or low-income can't be trusted with extra income, that's great. It's a myth we need to bury once and for all." —Sigal Samuel, @SigalSamuel | 
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