Canadian study shows how investing directly into people can help municipalities save money while improving their lives dramatically.
Two years ago, Foundations for Social Change, a Vancouver-based charitable organization, started a research project, with the help of the University of British Colombia, by handing out cash payments of thousands of dollars to 50 homeless people, ranging in age between 19 and 64. The idea was to check on recipients over the course of a year to see how they were getting on.
Those 50 people were chosen at random out of a pool of 115 participants, with the other participants forming a control group. All the participants were homeless for at least six months and were not struggling with serious substance use or mental health issues. What the researchers found after 12 months was “beautifully surprising.”
Not only did those who received the $7,500 CAD (roughly US$5,600) spend fewer days homeless than those in the control group, but they also moved into stable housing after an average of three months, compared to those in the control group, who took an average of five months.
According to CBC, cash recipients spent 52 percent of their money on food and rent, 15 percent on other items such as medications and bills, and 16 percent on clothes and transportation. Almost 70 percent of the people who received the payments were food secure after one month. In comparison, spending on alcohol, cigarettes, and drugs went down, on average, by 39 percent.
"I had no expectations and really high hopes," said Claire Williams, CEO of Foundations for Social Change. She said that people dismiss the idea of giving homeless people money because they assume it will be mismanaged. This study, however, challenges that idea and shows how financial support can help people living on the margins. And, in extra good news, the project data showed that by finding stable housing more space was freed up in shelters, which saved the shelter system $8,100 CAD per person over those 12 months.
Therefore, this Canadian study shows how investing directly into people can help municipalities save money while improving the lives of people dramatically.