THE EVIDENCE
You are probably wondering if it’s really wise to share resources, and especially cash, directly with people. Will they waste it? Isn’t it better to teach someone to fish rather than give them the fish? These are fair questions.
It turns out that the answers have been studied rigorously for decades by researchers and in many cases directly sharing resources is more effective, and empowering.
“Children with college savings between $1 and $499 are three
times as likely to attend college and four times as likely to
graduate as those without any college savings.”
– THE INSTITUTE FOR HIGHER EDUCATION POLICY
“A $50 per month stipend in East Tennessee more than DOUBLED college persistence.”
-THE UNIVERSITY OF TENNESSEE
Additional findings
Direct payments are quite effective, much of the time. Dozens of rigorous studies have shown positive return-on-investment. (1)
Individuals typically have a much better understanding of how to maximize the positive impact of cash compared with nonprofits and/or the government. Nonprofits and the government spend billions each year for programs that don’t work, aren’t valued by people in poverty, and/or are too expensive.
Cash creates the capacity for people to invest in their future, including tutoring, training, education, and their health. They are best positioned to decide where, when, and how to invest given the context of their lives.
Recipients of cash do not systematically waste or misuse it. That said, reliable approaches are needed to avoid fraud and abuse. That’s one reason All Flourish partners with institutions that validate people and their needs.
Cash combined with other goods, services, and/or programming can be powerful.
Our friends at givedirectly.org have compiled the best set of evidence we’ve seen:
They provide a summary of findings here. And here. They have created a database of 300+ peer-reviewed papers, working papers, and program reports. They cover countries all over the world and investigate a wide range of outcomes, as well as various payment structures, including UBI, conditional, and unconditional cash transfers, and vouchers, among others.
We also thought it helpful to share this article, which summarizes the impact of a cash payment program in Stockton, CA.
You can also read about the progress at our partner Backrs here.