What do homeless people do with cash aid? A new study found out.

Excerpt:

In 2002, the then San Francisco supervisor Gavin Newsom proposed legislation to cut welfare assistance to nearly 3,000 homeless people living in the city from $395 a month to $59 a month, and divert the budgetary savings toward shelters and other services. It was promoted with the name “Care Not Cash”…

The results of a new study in Vancouver, Canada, test this stereotype. Through its New Leaf Project, the charitable organization Foundations for Social Change gave people who have been homeless for less than two years a one-time deposit of $7,500 in Canadian dollars (about US$5,600). They also received coaching and workshops about spending. Other groups received the money and workshops with no coaching, while some received the training but no cash and no resources at all.

The foundation then analyzed the program’s effect on the 115 participants, who were identified through local shelters. Not only did its findings contradict the conventional wisdom about giving poor people money, the results also suggest that cash transfers may actually reduce government spending.

Those who received money in the trial increased their spending on rent, food and clothing. They didn’t buy so-called “temptation goods” like alcohol, drugs and cigarettes.

Read the whole story here: https://www.theguardian.com/us-news/2023/sep/27/canada-study-homelessness-money