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  5. Here's where funding comes from for guaranteed basic-income programs giving money with no strings attached to low-income Americans

Here's where funding comes from for guaranteed basic-income programs giving money with no strings attached to low-income Americans

Allie Kelly,Noah Sheidlower   

Here's where funding comes from for guaranteed basic-income programs giving money with no strings attached to low-income Americans
  • Guaranteed basic-income pilots across the US give no-strings cash assistance to low-income families.
  • Funding often comes from foundations and federal relief funding, not just taxpayer dollars.

Across the US, guaranteed basic-income pilots are giving hundreds of dollars a month unconditionally to help thousands of low-income families secure housing and pay off debts.

The money for those programs might not come from where you expect. Each pilot has different funding streams, but the money often comes from foundations and federal relief funding — not just local taxpayer dollars, according to the Economic Security Project, an organization that advocates for guaranteed income and cash tax credit programs.

Income inequality is high, many areas are experiencing an affordable housing crisis, and Census data shows that about 40 million Americans live below the poverty line.

Cities like San Antonio, Austin, Denver, Boston, and Minneapolis have turned to basic-income pilot programs to explore ways to reduce those poverty levels. GBI offers participants no-strings cash payments for one to three years.

The programs differ from traditional social services because participants can choose to spend the money where they need it most instead of on a specific spending category like SNAP or Medicaid. Many have used the funds — often between $500 and $1,000 a month — to pay rent, afford groceries, pay off debt, and support their children.

"You're deciding what's best for your family, you're the expert on your family," Monique Gonzalez, a mother of six and participant in the San Antonio pilot, told BI. "Being able to utilize these funds in a manner that puts you back into control boosts your confidence."

Still, basic income has been met with opposition by some local leaders and lawmakers, often citing concerns about the cost of the programs. Republicans in Texas, Arizona, Iowa, and South Dakota are making efforts to ban GBI programs at the municipal and state level. Some worry that cash payments will make people too reliant on the government.

"Are we going to rob from taxes that fund our streets, bridges, law enforcement, and government function?" Arizona Rep. John Gillette told BI. "Are we going to raise taxes for people that are not working or don't want to work? I think this disincentivizes people from getting a job."

States and cities sometimes fund basic-income programs

Many basic-income programs receive funding directly from state and local governments.

On the state level, California budgeted $35 million in 2021 for cities to put into effect guaranteed-income programs over five years. This has allowed thousands of participants in Los Angeles, San Francisco, and Sacramento to receive monthly payments.

In Michigan, Flint announced a plan to give new and expecting moms a $1,500 lump sum and then $500 monthly for their baby's first year. The program comes from government money and is supplemented by grants.

Biden's economic relief plans also fund the programs

GBI pilots in Massachusetts and Texas have also pulled from federal pandemic relief funds to support participants.

President Joe Biden signed the American Rescue Plan Act, also known as ARPA, in 2021. The funds — which amount to $1.9 trillion — were intended to alleviate the negative economic impacts of COVID-19. ARPA partially funded pandemic stimulus checks, and local governments have also received money to spend on local education, childcare, and housing assistance.

In some cases, these local governments chose to spend the money on basic income.

The City of Chicago's Department of Family and Support Services committed $31.5 million in ARPA funding to assist 5,000 residents via the Chicago Resilient Communities Pilot, the nation's largest pilot.

Somerville, Massachusetts is also allocating $1.8 million in ARPA funds toward GBI, with other ARPA funding going to affordable childcare programs and public transit. The local pilot is giving 200 low-income families currently experiencing housing insecurity $750 a month for a full year.

Harris County, which includes Houston, is budgeting $20.5 million in ARPA funds to give low-income households $500 a month for 18 months.

Nonprofits and philanthropy play a key role in basic-income funding

Other basic-income programs are organized through a nonprofit, or receive funding from foundations and private donors.

For instance, former Twitter CEO Jack Dorsey donated $15 million in 2020 to help fund pilot programs assisted by Mayors for a Guaranteed Income, which encourages local leaders to implement GBI programs. Organizations like GiveDirectly have helped deliver $250 million in unconditional cash payments to over 220,000 low-income Americans since 2017.

In San Antonio, the nonprofit UpTogether first piloted GBI in 2020 by giving low-income families $5,108 total over 25 months. UpTogether is also giving a smaller group of families $500 a month for 18 months, set to end in December 2024. The nonprofit organized money through the city of San Antonio, philanthropic foundations, and donors.

Similarly, the poverty solutions nonprofit Georgia Resilience and Opportunity Fund is giving cash payments to low-income Black women in Atlanta. The $13 million initiative is funded by GRO Fund and individual donations.

A basic-income pilot in Denver was so successful that its funding was extended. The city, the private foundation Colorado Trust, an anonymous foundation provided over $7 million to continue the program for another six months.

Along with funding cash payments, the Economic Security Project said that philanthropic donations can help a GBI programs pay for income policy research. Most GBI pilots interview participants throughout their program about how cash payments are impacting their financial situation.

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