Direct Cash Assistance Funds

There is a growing body of evidence that suggests one of the most effective ways to support people in moving toward economic security is to provide direct cash. The fundamental philosophy behind cash transfers is a belief that people should be trusted to make decisions for themselves. Unrestricted, cash payments that do not require recipients to participate in certain programs  — like education or workforce training —  to remain eligible, give people power and agency over their futures.

There is a long history demonstrating how large scale cash assistance programs in the U.S. have created positive outcomes for individuals. Using 30 years of data, researchers Bastian and Jones concluded that the Earned Income Tax Credit is one of the least expensive anti-poverty programs in the U.S. The Alaskan Permanent Fund Dividend pays a yearly dividend of around $1,600 to state residents since 1982. There has been no evidence of a decrease in labor market participation. The Eastern Band of Cherokee Basic Income, started in 1996, provides $500 plus per person per year and has shown many positive effects like reduced behavioral and emotional problems in children, and less depression, anxiety and alcohol dependence in adults¹.

Last year, millions of families across the U.S faced a crisis during the pandemic: job loss, eviction, child care, health issues, and more. In response, there was an explosion of emergency direct cash transfer programs. Cash transfers proved to be a much more cost effective and efficient solution in enabling families to solve their problems. Since then, many nonprofits, philanthropic organizations, and government agencies have transitioned to identifying opportunities to regularly use cash transfers as a tool for economic stability.

In 2020, former Mayor Michael Tubbs of Stockton, California founded Mayors for a Guaranteed Income, a network of mayors advocating for a guaranteed income to ensure that all Americans have an income floor. There are now 57 Mayors who have joined the network, 25 of which are in the midst of implementing or planning a guaranteed income pilot. Likewise, in the last few months, dozens of other pilots led by community-based organizations and philanthropy across the U.S are getting off the ground. Many of these pilots target specific populations, like low-income families, families with young children, transitional foster care youth, those experiencing homelessness, pregnant women, or recently incarcerated. While we know that cash transfers are effective in reducing poverty, we do yet have a grasp on how they impact other outcomes. These pilots play a pivotal role in informing policy that could offer solutions to addressing the root causes of poverty.

The experience of Impact Charitable with the Left Behind Workers Fund, the first of its supported Direct Cash Assistance programs, prompted interest and ideas in other projects where the process and technology created during COVID-19 could be used for additional focus populations. This growing body of work currently has two active funds, the Left Behind Workers Fund and the Denver Basic Income Project, and other projects in the development phase.  Impact Charitable remains committed to utilizing the Direct Cash Assistance Fund model to continue to support families and communities. If you are interested in learning more about establishing a DCAF, please contact us. 

¹Jain Family Institute. 2021. “Guaranteed Income in the U.S: A toolkit of best practices, resources, and existing models of planned and on-going research in the U.S.” https://www.jainfamilyinstitute.org/assets/JFI-U.S.-Guaranteed-Income-Toolkit-May-2021.pdf.