Funding The Front Lines – Philanthropy For A Guaranteed Income

Should philanthropy – especially those anchor institutions whose mission is to lift up their communities – be getting into more direct action in support of our societies most vulnerable? 

I’m really buoyed right now by the successes of several smaller community trials of buying medical debt, providing a guaranteed income for the homeless and participatory budgeting/grantmaking. I think we are close to the point where philanthropy needs to ask themselves whether the results of these initial programs warrants larger investment & a larger test case and identifying whether these new approaches to community investment yield higher returns than that of strategic grantmaking or even impact investing.

Given I relayed my thoughts recently on the issue of buying debt as a strategy to lift people out of poverty, I wanted to focus my attention on guaranteed income programs delivered via nonprofit organizations. 

The bottom line is that we need to break from what is perceived as best practices in the traditional sense and re-imagine what assets and vehicles we have at our disposal to make a real difference in our community.

Someone making a real difference right now Kevin Adler, CEO and founder of Miracle Messages. I met Kevin back in 2016 when we were both participants in the Unreasonable Group’s Business Model Validation Lab which provided social sector initiatives (programs & products) in the early/idea-stage with a step-by-step methodology to rapidly and systematically validate each venture’s business model. Kevin drove all the way down from San Francisco for the three day accelerator on a real mission. It’s amazing to see now the impact his organization has had given that at the time he was simply trying to build out the organization from their initial premise of connecting homeless folks through simple, yet powerful recorded phone messages of hope.

Fast forward 5 years and with 500+ unhoused neighbors (as they affectionately known) reunited with loved ones via volunteers & partner referrals, and also a buddy system (Miracle Friends) of which 150+ unhoused neighbors have been befriended by volunteers via weekly phone calls and texts, the next progression of the organization has come in the form of ‘Miracle Money’ – a program that gave 15 people $500 a month for 6 months. 

The majority of funds for this pilot was raised by 267 donors in a wildly successful crowdfunding campaign.

Participants of the program (who were selected across 8 different criteria) ended up using the money on essentials like food, medication and transportation. Others used it in a very surprising fashion from what organizers had envisaged. One person used it to adopt a service dog to help prevent seizures. Another helped his daughter pay for college tuition, and one even donated a portion of their funds back to Miracle Messages. 

In the end Sixty-four percent of participants said that the money helped reduce their stress and worry about finances. And despite the relatively small amount of assistance, more than a third of the participants were able to move into housing.

Should any of this have come as a surprise though? Especially since some economists argue that giving cash to families with no strings attached is the best way to end poverty after all.

In a recent Fast Company article Kevin gave some background to what made the pilot evidently work. ‘He says that the group’s approach of developing true relationships with unhoused people is part of what makes the program work well, because the volunteer friends can help identify people who can make the most use of the funds and give them support as they spend it. But cash transfers could become a bigger part of what the organization does.’

Philanthropic institutions would be well served by exploring the options available to them and actively questioning the best uses of its endowments as a catalyst for civic vitality and mobility. This could include an annual fund focused on these approaches, forming giving circles similar to the one that propelled Miracle Money forward and one in which they can learn about the issues and support accordingly. More grant funding (and structured for multi-year support) could also help build out further research and evidence on the merits of this approach and hopefully spark other more technical methods & investments such as loan loss reserves and providing loan guarantees in support of the organizations administering these innovative programs. 

Philanthropy often serves as the entity that provides the seed money to innovative nonprofits such as Miracle Messages but in this case, and on this issue they have largely come late to the party. Homelessness is a funding area that is largely driven by empathy for those affected. Apart from organizations such as Funders Together to End Homelessness (which is looking at systems, structure, policy, and capacity), smaller, location-based gifts are predominantly enabling service providers to triage the problem on the front lines rather than providing the capacity to tackle the problem at large.

It’s actually cities (and the innovative mayors that are driving them) that could be the public – philanthropic key here to building out a guaranteed income. 

A great example was Michael Tubbs who served as the seventy-ninth mayor of Stockton, California. He was elected to this position in 2016, becoming the youngest mayor and first African American mayor in Stockton’s history. He has openly embraced the partnership of organized philanthropy, engaging actively with funders and associations, being a vocal proponent for a universal basic income, and overseeing a pilot project in his city that provided a no-strings-attached stipend of $500 over eighteen months.

While he lost his re-election bid, his work and leadership in this area has continued in earnest through Mayors for a Guaranteed Income (MGI) – a network of mayors advocating for a guaranteed income to ensure that all Americans have an income floor.

In a recent Twitter exchange with Mayor Tubbs we asked him what philanthropy might do to support the efforts of MGI of which he replied, “We def need more support for research and narrative efforts!”

Which in simple terms is to support efforts like Miracle Messages and/or partnerships with similar organizations and possibly the 42 or so mayors that are currently signed up with this coalition. I think an additional conversation should also include funding advocacy, but I digress.

One thing I definitely agree upon with Mayor Tubbs is if data is more readily available for funders to understand some of the root causes at a more nuanced level, philanthropy could then look more strategically at the larger problem in tandem with curbing the short-term effects. Either way, I’m all for efforts that are tackling inequities in our society in new and unique ways, and for funding that builds on programs that are showing early promise around issues that seem to be in a perennial state of flux, it just looks like it’s going to take bold and courageous leadership to achieve real success.

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