Canadian researchers gave $7,500 to people without a home — and the results show the power of universal basic income

Marguerite Ward

The New Leaf project studied what would happen if people without a home were given a large cash infusion. Alexey Malgavko/Reuters

The Foundation for Social Change, a Vancouver-based charity, partnered with the University of British Columbia to identify 50 people who had recently become homeless.

Researchers gave them a one-time payment of $7,500 and studied their spending habits and living situation over the next 12 months.

The recipients were able to secure stable housing faster than those who didn't receive the cash infusion, saving the shelter system $8,100 per person.

A Canadian charity recently conducted a bold social experiment: giving people experiencing homelessness a one-time cash infusion of $7,500.

According to the researchers, the results were "beautifully surprising."

The study, entitled the New Leaf project, speaks to the power of an interim universal basic income to lift people out of poverty. A universal basic income is essentially a cash handout from the government, often for the purposes of rehabilitating those in poverty.

More jurisdictions across the world are experimenting with the policy, including the US's recent trial in upstate New York and the ongoing study run by the NGO GiveDirectly in Kenyan villages.

The Foundation for Social Change, a Vancouver-based charity, partnered with the University of British Columbia to identify 50 people between 19 and 64 years old who had recently become homeless. The recipients were identified as not having significant substance abuse or mental health issues.

Researchers studied their spending habits over 12 months and compared their outcomes to a control group who did not receive the cash payment.

Those who were given the cash largely spent the money on food, rent, and transportation and moved into stable housing faster over the course of the year, according to the findings. Spending on "temptation goods," such as drugs, cigarettes, and alcohol declined by 39%, on average. And recipients were able to keep an average of $1,000 in savings, according to Canadian news outlet CBC.

The cash payment saved the shelter system $8,100 per person over the course of the year, a total savings of $405,000.

It also gave some participants the chance to update their job skills.

"When I found out I had been accepted to receive the cash transfer, I was living in an emergency shelter, trying to find a way forward," a New Leaf project participant whose identity was kept anonymous said in a press release. "The money gave me the resources I needed to get out of the shelter and push for the social programs and the computer class I needed. It was an important stepping-stone and it gave me a choice. It gave me a chance."

Eventually, the Foundation for Social Change hopes to expand the study with a $10 million fundraising effort, to deliver the same impact to many more people across Canada.

"Homelessness can happen to anyone," Williams wrote in the study's impact statement, noting that many people are just one paycheck away from losing their homes or cars, and being forced to find other ways of living. "While the economic impact of homelessness costs everyone, ultimately it is the human cost that is so devastating."