How a guaranteed income pilot impacted the lives of low income DC residents

During the pandemic several local organizations piloted a program offering cash transfers to low income residents mostly in Ward 8. THRIVE East of the River was created to assist residents most vulnerable to negative economic and social impacts of the pandemic, and help provide a financial bridge for people now and through recovery.

Unlike other assistance programs, there are no restrictions on how participants can use the funds. That means researchers were able to see how a guaranteed income pilot program impacts a participant’s well being, housing status, and spending. Now a recent report sheds light on the effectiveness of the initiative.

What were participants’ experiences like during the program, and what insight does this pilot provide for future cash-transfer programs? Here are a few takeaways from the report.

What exactly is THRIVE East of the River?

As a response to economic and other social burdens increased during the pandemic, four community-based organizations — Bread for the City; the Far Southeast Family Strengthening Collaborative; Martha’s Table; and the 11th Street Bridge Park (Bridge Park), a project of the Ward 8 nonprofit Building Bridges Across the River — launched THRIVE East of the River.

Between July 2020 and January 2022 the pilot distributed over $3 million to 590 families. Each participating household received $5,500, either in one lump sum or in five $1,100 monthly payments, according to THRIVE documents. Other services like unemployment insurance, financial literacy training, mental health support, and workforce training were also provided.

Funding and services were provided by a variety of privately funded foundations, corporations, and individual donors, according to the report.

The program focused largely on Ward 8, where a third of households have incomes below the federal poverty line, and the median income is less than half of the District average. The pandemic also disproportionately affected industries that employ Ward 8 residents.

From July 2020 to July 2021, researchers from the Urban Institute, an nonprofit research organization, set out to evaluate the program and offer ways to improve the pilot during its implementation. Researchers looked at three primary areas:

• How THRIVE funds impacted housing stability food security, mental health and child well-being,
• What methods were used to provide cash and services to participants, and
• How participants intersected with other local state and federal resources

Researchers used a combination of three surveys, interviews, and programmatic data to evaluate about 85% of participants in the program (about 15% of residents participated in the program after the evaluation period).

About 86% of participants resided in Ward 8, with 13% living in Ward 7 and a little under 2% coming from other parts of the District. Over 90% of participants had a household income of less than $35,000. About 72% had at least three people living in the home, and just over 52% had family members under 18 years old.

About ⅔ of participants said they were unemployed, and 30% of those participants reported that they lost their job because of business closures, layoffs, or other pandemic related issues.

Food, transportation, and housing were the top costs for participants

Almost 90% of participants reported using some portion of their THRIVE funds on housing costs, according to the report. Renters were nearly twice as likely to spend all or almost all of the payment on housing costs as those who live in a home owned by a household member. Most of the THRIVE participants were renters.

Some participants also used the funds to pay for utilities. Estelle Herndon, who lives in Anacostia, said she chose the lump sum option, and used it to pay for some utilities in advance.

“Because I knew the lump sum wasn’t going to last, I was like, let me stay ahead for a couple of months,” Herndon said.

Nearly all participants also spent at least some of their cash transfer on transportation. Food was another top priority for participants with 42% of THRIVE residents spending “all or almost all” or “a lot” of their THRIVE cash payments on food. This ran counter to THRIVE partners’ intention to also offer additional food distribution. Participants spoke of inconvenient pick up times and wishing the offering were different, the report says.

Naimah Gholson, a participant who lives near Congress Heights, said she spent the majority of her funds on food (she also received food stamps). She was also able to pay utilities and other house expenses, and said the program helped her as she was trying to navigate a rough time for her family.

THRIVE also helped participants pay for various other needs. Herndon, for instance, used the funds to pay off credit card debt. And the program also connected her to services to get furniture during a move and helped with her STAY DC application.

The report also shows that the methods participants used to cover household needs before the pandemic, like borrowing from friends or family or digging into personal savings, dropped after receiving THRIVE cash transfers.

Cash transfers alleviated some immediate challenges

THRIVE participants reported lower rates of food insecurity and better mental health than other people with low incomes, both nationally and in DC, after receiving the cash payments, according to the report. Before the cash transfers, 34% of participants reported they sometimes or often did not have enough to eat. The number dropped to 19% after receiving their payments.

The number of participants who used their personal savings to meet household needs dropped from 60% to 50%, according to the report.

Overall, researchers in the report stated that “cash was flexible enough to meet the unique needs of diverse households,” while many safety-net programs often “restrict people’s choices to “in-kind” basics such as food and shelter.”

The program wasn’t a panacaea — participants still reported financial difficulties after it ended. But for many, it helped.

“The whole program was very nice,” Herndon said. “I got a lot of benefit from it.”