Anecdotally, the Denver Basic Income Project has saved lives. According to new research, the first-year pilot program that provided no-strings-attached cash to 807 homeless adults also saved taxpayers significant money.
The savings manifested in program participants staying in homeless shelters less frequently, requiring fewer ambulance rides, emergency room visits and hospital stays, and spending fewer nights in jail or drug and alcohol treatment centers, a report released Tuesday shows.
Decreases in those categories added up to more than $589,000 saved, according to estimates from researchers with the Center for Housing and Homelessness Research at the University of Denver.
For a project that has paid out $9.4 million to participants since it was launched, that total may not look like much.
But Mark Donovan, the Denver Basic Income Project’s founder and executive director, is confident the stability the program has helped to create in many recipients’ lives will only continue to bear fruit both for them and the Denver community.
His hope is that the pilot program — already extended into Septemeber — will continue to draw financial support that will allow for a three-year experiment in how providing people with a basic income can change lives.
“We’re really excited about the initial foundation that we built. We’re already seeing (recipients’) household incomes continue to improve, month to month, and we believe that the second year and even beyond can be even more profoundly transformational,” Donovan said during an online news conference Tuesday.
The pilot program was the largest of its kind studying the impact of direct cash on people who are homeless, organizers said.
The program split enrollees into three cohorts. The first group received $1,000 per month over 12 months, the second group received a $6,500 lump sum at enrollment and then $500 a month for 11 months, and members of a third control group received $50 per month over 12 months.
Payments for the pilot program began in November 2022 and continued into January of this year on a rolling basis.
While none of the participants were obligated to participate in the research, hundreds did. Researchers kept up with them through regular surveys, including long-form questionnaires at enrollment, after six months of payments and after 10 months, according to a summary released Tuesday.
Survey participation did fall throughout the study period. While 631 participants completed surveys at enrollment, just 457 did so at the six-month mark and fewer still — 396 — did so in the final survey after 10 months of payments. Researchers attributed that decline to typical attrition.
Even with the wide variances in monthly payments, researchers found a significant increase in housing security across all three cohorts after 10 months of payments. Just 8% of participants who filled out the survey at enrollment reported living in a house or apartment they rented at that time. At the 10-month mark, that increased to 45% of enrollees surveyed, including 43% of those receiving just $50 per month.
Perhaps unsurprisingly, researchers saw substantial improvements in recipients’ feelings of financial well-being.
But the research also tracked an increase in employment among recipients. Roughly 23% of recipients had full-time jobs at enrollment. At the 10-month mark, that total had increased to 27%.
The biggest increase in that category came among people who received the $6,500 lump sum at enrollment — 24% to 37%. Justin Searls, one of the people in that group, told The Denver Post last year that he used his upfront money to buy a car that allowed him to better search for jobs.
Full-time employment dropped among recipients in the $50-per-month category, from 26% to 21%.
Daniel Brisson, one of the leading members of the research team, chose to focus on the bigger picture of employment when asked about the possible reasons for that control group having lower rates of full-time jobs after 10 months.
“One of the bigger critiques of a program like this is, ‘Why are you going to give people money and disincentivize them from working?’ ” Brisson said. “In fact, that’s not what we saw. We gave people money and work increased.”
The pilot program was not the end of the Denver Basic Income Project’s efforts.
The city has dedicated another $2 million to the project this year. That matches Denver’s contributions to the pilot phase in 2023.
That additional city funding coupled with other sources, including $3 million from the nonprofit Colorado Trust, has allowed the Denver Basic Income Project to extend payments to 673 previous recipients through at least September. Supporters are hopeful about carrying the program into 2025.
The biggest barrier beyond ongoing funding is stigma, Maria Sierra, the project’s community engagement manager, said Tuesday.
Society defaults to more restrictions when providing benefits, Sierra said. The Denver Basic Income Project’s early outcomes demonstrate strict oversight is not necessary or even what’s best when seeking to help people out of poverty.
“(It’s) a huge challenge to change the mindset, change the narrative around the community that we’re serving,” Sierra said. “They know what’s best for themselves and they do make the right decisions when they have access to a resource like direct cash to change their lives.”
Stay up-to-date with Colorado Politics by signing up for our weekly newsletter, The Spot.
Originally Published: June 18, 2024 at 10:00 a.m.
