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How do cash stipends help address homelessness?

ARI SHAPIRO, HOST:

A $9 million experiment in Denver holds some clues for how the nation might address the growing crisis of homelessness. Adrian Ma and Wailin Wong from NPR's daily economics podcast, The Indicator, walk us through how it worked.

ADRIAN MA, BYLINE: Mark Donovan is, by most people's standards, a pretty financially well-off guy. And back in 2020, Mark says he was struck by the vast economic disparities exposed by the pandemic.

MARK DONOVAN: As COVID was hitting, I was seeing people losing their sources of income and their stability. And at the same time, I was seeing this incredible appreciation in wealth.

WAILIN WONG, BYLINE: And that was especially true for a very large bet Mark made on a certain auto company.

DONOVAN: I put almost all of my investable net worth into Tesla.

WONG: And he found himself sitting on this massive increase in wealth in the middle of a pandemic. And he thought, maybe I can do some good here.

DONOVAN: And so I just started doing $1,000 individual grants to people who had been impacted by COVID. I wasn't thinking about it from any other standpoint than - what can I do to have immediate impact in this moment?

MA: He began digging deeper into research on things like direct giving and universal basic income.

DONOVAN: It's completely, in my opinion, underutilized. And, you know, I think it can really help us to create a more thriving society.

MA: And Mark thought we should try something like this in Denver. But it can't just be him just helping out a couple people here and there. It had to be bigger in scale. And so to get the ball rolling on this UBI experiment, Mark says he put in $500,000 of his own money.

WONG: With additional funds from foundations and the city of Denver, Mark raised about $9 million for what would become the Denver Basic Income Project. And to make it scientific, they teamed up with researchers like Katie Calhoun.

KATIE CALHOUN: I'm an assistant professor at Ohio State University's College of Social Work.

MA: With the help of local nonprofits, Katie and her colleagues recruited about 800 people experiencing homelessness. These people were then divided into three groups. Group A would receive a thousand bucks a month for 12 months.

WONG: Group B would get $6,500 the first month and 500 a month thereafter. So they received the same total amount as Group A, but they got about half of it upfront.

MA: And finally, Group C - sort of the control group - only got $50 a month.

WONG: The payments started rolling out to participants in November of 2022, and they weren't told how to spend the money. About a year in, a picture is starting to emerge of how these payments affected people's lives. For instance, people who got the larger payments were more likely to say they could cover their bills and find full-time employment than those in the $50 group.

MA: But what's almost even more interesting, Katie says, is how these payments affected people's experience with homelessness.

CALHOUN: Folks in all three of the payment groups improved their housing situation.

MA: Each group saw a big decrease in the number of nights they spent unsheltered. And 10 months into the project, almost half the participants in each group found access to independent housing. Mark and Katie are careful to say that it is still early in the project, and it'll take time to tease out what other factors might have made a difference for participants, such as access to other services or access to a smartphone. But they say they're still encouraged by the results.

WONG: Right now, the plan for the Denver Basic Income Project is to continue for a second year, and participants will continue to get payments even if they find housing and jobs.

MA: Adrian Ma.

WONG: Wailin Wong, NPR News.

(SOUNDBITE OF ELMIENE SONG, "MARKING MY TIME") Transcript provided by NPR, Copyright NPR.

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Adrian Ma
Adrian Ma covers work, money and other "business-ish" for NPR's daily economics podcast The Indicator from Planet Money.
Wailin Wong
Wailin Wong is a long-time business and economics journalist who's reported from a Chilean mountaintop, an embalming fluid factory and lots of places in between. She is a host of The Indicator from Planet Money. Previously, she launched and co-hosted two branded podcasts for a software company and covered tech and startups for the Chicago Tribune. Wailin started her career as a correspondent for Dow Jones Newswires in Buenos Aires. In her spare time, she plays violin in one of the oldest community orchestras in the U.S.