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50 people battling homelessness were given $5,700. What they did with it might surprise you

Posted at 1:37 PM, Oct 19, 2020
and last updated 2020-10-19 13:37:35-04

The risk of homelessness looms large for many across the country as people deal with job loss and economic uncertainty brought on by the coronavirus pandemic.

The National Alliance to End Homelessness estimates, right now, there are 567,000 people who call the streets their home, a number that has only risen since March.

There are shelters, soup kitchens, and myriad charities to help, but the group Foundations for Social Change, a charitable organization based in Vancouver, Canada, suggests one source of help trumps the rest: money.

“Sometimes a little bit of a hand up can mean all the difference in whether or not someone is going to stabilize and get into housing or not,” said chief public policy officer for the Colorado Coalition for the Homeless Cathy Alderman.

It might seem like an obvious solution, but it is challenged by the preconceived notion that people battling homelessness might squander the money or spend it on harmful habits like alcohol, drugs, or cigarettes.

“I think it’s not surprising at all that people who are struggling with the cost of living and forced to sleep outside would use dollars given to them to get inside into a home,” said Alderman.

In September, Foundations for Social Change wrapped up nearly two years of research that suggests those in less fortunate circumstances would use money to help secure food and housing, rather than illicit substances.

Back in 2018, the group gave 50 people battling homelessness in Vancouver a lump sum of $5,700, without restriction, to see what they would spend it on, and they compared the findings to a group of 60 homeless individuals who were not given any lump sum.

Foundations for Social Change found that in the first month, the group that received the payment, 70 percent of them were able to access a sustainable food source that they maintained for the rest of the year. They also found stable housing at a rate that outpaced those who had not received the payments by 12 months.

The researchers also found that spending on items like drugs, alcohol, and cigarettes decreased by 39 percent.

“The key findings were phenomenal and were even well beyond my expectations,” said one of the head researchers, Dr. Jiaying Zhao. “This actually is counter to our common assumptions of how these folks will spend their money and cash, so that was very good to see.”

“I would save a third, spend a third on things I know I needed, and then give a third away,” said Benjamin Dunning, who was homeless for nearly five years following the Great Recession in 2008. “There just wasn’t any work available and I was like, 'well, better dig in for the long haul.'"

Dunning says following an injury that prevented him from working he was no longer able to afford rent in the Denver suburb where he lived. He says he moved from shelter to shelter, trying to weather the storm before he was able to find a community of other people in a similar situation that offered a little more stability and a consistent roof over his head.

“One thing I found out is [the homeless people I was around] were just like my neighbors in the suburbs,” said Dunning. “Most of them were people who had gotten stuck on hard times and trying to figure out how to deal with it.”

The study by Foundations for Social Change focused on people who had been homeless for a year or less and who had been screened for a low risk of mental health challenges and substance abuse. So, Dr. Zhao says this is not a silver bullet, but an encouraging sign to help solve an issue that has several layers of complexity.