As Congress grapples with how to pay Americans affected by the coronavirus downturn, this non-profit is giving them $1,000 immediately
- As Congress debates providing American workers with direct cash transfers, one non-profit is taking matters into their own hands and giving needy Americans cash immediately.
- The non-profit organization GiveDirectly is mailing Americans enrolled in the Supplemental Nutrition Assistance Program (SNAP) $1,000 checks beginning with 200 recipients next week.
- GiveDirectly's chief financial officer Joe Huston said the organization has enough funding to send 200 checks out immediately, and hopes to expand the program to help more people.
- Advocates of direct cash transfers and universal basic income hope that giving cash to the poor as a policy becomes less stigmatized and deployed more often as a result of the coronavirus crisis.
- Visit Business Insider's homepage for more stories.
As congressional leaders debate legislation to provide American workers with direct cash transfers amid the novel coronavirus outbreak, one organization is taking matters into their own hands and piloting a program to give vulnerable Americans $1,000 beginning next week.
The novel coronavirus' rapid spread has already resulted in thousands of Americans either losing their jobs, getting laid off, or having their hours cut. There are at least 16,000 cases of the virus reported in the US so far, with 213 deaths.
While the travel and hospitality industries were initially hit hardest, workers across the US, such as waiters, bartenders, and freelance workers in all industries, are out of work after multiple states have no ordered most public places to close down, including restaurants, bars, movie theaters, concert halls, and gyms.
Some economists now estimate that one million American workers could lose their jobs in the month of March alone, the Washington Post reported. Already, unemployment insurance claims are surging in multiple states, with a Friday Goldman Sachs report projecting that total unemployment claims are on track to smash an all-time record and could total 2.5 million this week alone.
Since 2009, the non-profit organization GiveDirectly, has pioneered a charitable model of direct cash payments to individuals in need, mainly located in the developing world. And now, it's stepping in to provide emergency assistance to as many of those workers as possible.
On Thursday, the organization announced they are rolling out a program to mail Americans enrolled in the Supplemental Nutrition Assistance Program (SNAP) $1,000 checks beginning with 200 recipients next week - no strings attached.
The organization is identifying SNAP recipients in coordination with the firm Propel, which develops technology to help SNAP recipients. The operation says that 90% of donations to the coronavirus emergency relief program will go directly to recipients' pockets and the remaining 10% to administrative and logistical costs.
In a Friday interview with Insider, GiveDirectly's chief financial officer Joe Huston said the organization has enough funding to send 200 checks out immediately, and hopes to expand the program to help more people, particularly undocumented and elderly Americans who often slip through the cracks of other government relief programs.
Huston told Insider that while the federal government has previously doled out emergency cash assistance before, he was surprised to see so many different lawmakers on both sides of the aisle, ranging from GOP Sen. Mitt Romney to Democratic Rep. Ilhan Omar, introducing their own direct cash assistance proposals.
After passing an initial relief package including emergency sick leave, the GOP-led US Senate is now taking up a proposal to give means-tested cash assistance to most Americans based on 2018 tax returns. Since it's unclear how long it'll take for the details of the legislation to pass and go into effect to start sending out checks, GiveDirectly is stepping in to fill the gap in government action.
Advocates of the policy hope that giving cash to the poor become less stigmatized
Former Democratic presidential contender Andrew Yang, who largely ran on making cash transfers a component of the US policy landscape, also celebrated the developments in Congress.
Yang rose up from being a little-known presidential candidate to a national sensation, partly because of his unique policy platform, which included a universal-basic-income program he called the Freedom Dividend. The initiative would give every American adult $1,000 a month, no strings attached.
On Monday, Yang said he had "been in touch" with the White House about devising an emergency cash transfer plan and that his team was "eager to offer our support to make sure this process runs as smoothly as possible."
"I think he helped a lot," Huston said of Yang. "He obviously didn't invent basic income and he didn't invent cash transfers...but he was at so many Democratic debates talking about basic income and getting that into the forefront."
The measures being floated in Congress are temporary cash assistance programs in direct response to the ongoing crisis as opposed to a fixed, permanent policy like Yang's Freedom Dividend. But Huston told Insider he's cautiously optimistic that the current crisis could bring about a long-term shift in US public policy towards direct cash transfers.
"My hope is that one good impact that could come out of this horrible thing is that we start to go to cash sooner as the tool in the toolbox for how to help people," he said.
Hurston noted that even though Yang's revival of the national discussion around universal basic income got the most attention, Yang and other candidates helped make direct cash plans more reasonable and achievable by incorporating them into their campaign platforms.
Those plans included Sen. Kamala Harris' LIFT The Middle Class Act, a significant extension of the earned-income tax credit that would give monthly cash payments to middle-class people and families, and Sen. Cory Booker's Baby Bonds plan, in which the government would create and contribute to "opportunity accounts" for children from low and middle-income families to help make up the wealth gap.
Huston argued that in recent years, both GiveDirectly's work in the developing world and in disaster situations and other economic research has produced concrete, data-driven evidence to counter common stereotypes that low-income people are irresponsible with money, won't spend it on essentials, and will be even dis incentivized from working.
For decades, many of those same messages have been levied as arguments against social welfare programs including welfare benefits and SNAP. Indeed, the US Department of Agriculture is currently fighting in federal court to impose work requirements for SNAP recipients that could kick an estimated 700,000 off the rolls.
Instead, GiveDirectly argues their research and track record in both international aid and disaster relief shows that low-income people themselves are best qualified to directly spend on their own needs instead of having outside organizations spending on their behalf.
"So much of our conditioning is to start with the assumption that you can't just give people money. Like we even have that aphorism around 'you should teach a man to fish, not give them a fish.' I feel like we've all kind of been conditioned to say like, well, that's not possible," Huston said.
And while some Americans may be first inclined to donate to large charitable organizations and wary of giving cash, Huston argued that direct cash is "unusually well-suited" to a devastating, all-out economic crisis like the coronavirus.
"While it's the proximate cause of a medical crisis, the way many of us will be hurt first is economically, that we'll lose jobs or have new childcare costs or other unforeseen costs," Huston said. "For the people in need, their needs are very diverse. The advantage of cash we can do one thing: get cash to a lot of people and then enable a lot of priorities or fill a lot of gaps for different people."
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