The financial upheaval caused by the COVID-19 pandemic for millions of Americans is spurring a rise in a form of charitable giving that has proved highly effective in helping people navigate calamity: Giving them money with no strings attached.
So-called guaranteed income programs have launched in 40 cities across the U.S. under which individuals and families living near the poverty threshold receive monthly stipends that they can spend however they want.
“The pandemic really showed people the existing economic arrangement was just not enough,” said Michael Tubbs, formerly the mayor of Stockton, California, and founder of Mayors for a Guaranteed Income. “With folks not being able to get to work because their businesses were shut down, it showed a guaranteed income is a form of economic resilience and a smart pandemic response.”
Such programs are sprouting up as the economic fallout from the pandemic — shuttered businesses, lost jobs and diminished income — is now being exacerbated for many Americans by soaring food, housing and other costs.
“Who do we give money to?”
Government programs designed to buoy struggling Americans during the first phase of the pandemic included federal stimulus checks and expanded child tax credits for parents in the form of monthly cash payments.
“With these cash infusions the question changed from, ‘Do we give people money?’ to ‘Who do we give money to?’ which is a huge jump in the public imagination,” Tubbs said.
Mary Bogle, a researcher at the Urban Institute and an expert in programs that move Americans out of poverty, said the pandemic also helped to shine a light on the power of direct giving.
“We saw that the people who got cash in this country were able to weather a serious crisis,” she told CBS MoneyWatch.
For example, stimulus payments provided to most low- and middle-income Americans put cash in people’s pockets and reduced financial hardship, while also providing a lifeline for the broader economy as consumers boosted their spending.
“We even saw some measures of well-being for people with low income rise,” Bogle said. “Definitely, the pandemic has a lot to do with these cities starting programs.”
A bridge to a better life
In June 2021, New York City’s first guaranteed income program, called The Bridge Project, enrolled 100 low-income mothers who began receiving monthly payments of either $500 or $1,000. The payments will continue for three years.
Recipients who are approaching the one-year anniversary of receiving their first checks say it’s helped ease their financial worries. Manhattan resident Tynisha Coleman, 31, has been unemployed since the birth of her son.
“When he came I just didn’t decide to go back,” she said of her job working with autistic children. Instead, Coleman relied on unemployment and Supplemental Nutrition Assistance Program (SNAP) benefits before she connected with The Bridge Project.
Applying for SNAP benefits was “time consuming for no reason” and “basically a roller coaster,” she said. “You just have to plead your case all the time, and I feel like with Bridge Project I didn’t have to do that.”
The stipend helps Coleman cover her rent of $1,825 per month and pay for daycare and other necessities for her son.
Another program participant, Lisa Chin, uses some of her stipend to pay for transportation to her baby’s doctor’s appointments.
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