When Ray got the news that he’d been chosen to receive the cash, he was living in an emergency shelter and trying to find a way out. Unlike what most people tend to assume, he did not buy drugs or drink it away. In actuality, he took a computer course, found housing, and started working toward a job helping people with addictions.
“I kind of want to give back to where I’ve came from,” Ray told CBC, his last name withheld for privacy. “I might one day be that important person that has a powerful voice … a seed can grow into an oak tree.”
The Experiment
Ray was one of 50 people in the New Leaf Project, an experiment run in Vancouver by the charity Foundations for Social Change in partnership with the University of British Columbia. The premise was almost provocatively simple: take people who had recently become homeless, hand each one a lump sum of 7,500 Canadian dollars, attach no conditions whatsoever, and see what happens. A separate group of 65 people received no cash and served as the comparison.
The study ran back in 2018, and its results were striking enough that it took years and a peer-reviewed journal to fully vet them. The findings were published in the Proceedings of the National Academy of Sciences (PNAS) in 2023, and the program has since grown well beyond the original pilot, expanding to hundreds of participants and more than a million dollars in cash transfers.
The Findings
What the researchers found cut against a stubborn assumption. Over the following year, the people who got the cash spent fewer days homeless than the control group, moved into stable housing sooner, and ended the year with more money saved. Crucially, there was no rise in spending on alcohol, cigarettes, or drugs. By the study’s accounting, spending on those things actually fell by 39%. The money instead went toward rent, food, clothing, and transportation, the ordinary machinery of getting back on your feet.
“It challenges stereotypes we have here in the West about how to help people living on the margins,” said Claire Williams, CEO and co-founder of Foundations for Social Change. She described the early results to CBC as “beautifully surprising,” and the surprise is really the point. The study wasn’t only measuring what homeless people do with money. It was measuring the gap between that reality and what the rest of us assume they’ll do.
The researchers actually put that assumption to the test. Alongside the cash experiment, the PNAS paper included additional studies showing that the public broadly mistrusts homeless people’s ability to manage money, the very bias Ray’s computer course quietly refutes. The team also found that this mistrust softens when people are shown counter-stereotypical examples or are walked through the math, which is its own small lesson about how stereotypes get dislodged.
There’s a worthwhile and honest caveat here, and it’s part of what makes the study credible rather than a feel-good headline. Participants weren’t a random cross-section of everyone sleeping rough. To take part, all 115 had to have been homeless for less than two years and were screened to exclude people struggling with serious substance use or mental health problems. In other words, the experiment tested whether a cash infusion could help people who had recently fallen into homelessness avoid getting permanently stuck, and for that group, it worked. It is not evidence that cash alone solves chronic homelessness or addiction, and the researchers have been careful to say cash transfers are not a cure-all.
Refuting the broad brush
What it does suggest is that for a meaningful slice of the homeless population, the barrier really is the obvious one: a lack of money at the moment it would do the most good. Lead investigator Dr. Jiaying Zhao of the University of British Columbia has argued the findings should push policymakers to take direct cash seriously as a tool. It won’t be the whole answer, but it is a faster, cheaper, more dignified piece of it. The economics back the dignity. By moving people out of shelters more quickly, the cash transfers generated net savings to the system, meaning the intervention partly paid for itself.
It’s the kind of result that’s easy to nod along with and surprisingly hard to internalize, because it asks us to extend a basic assumption we make about ourselves. When given resources and a little room, most people will try to build something despite our assumptions that a particular group will habitually do the opposite. Ray put it more simply: The money, he said, was a seed.
