Homelessness Decreased, Safety Increased After Social Experiment Grants People $1,000 a Month: Study

A social experiment in Denver that gifted people $1,000 a month last year discovered that while money does not always buy happiness, it does lead to more security.

The Denver Basic Income Project, an experiment by a nonprofit organization studying the impact of providing cash to vulnerable people, began providing payments to homeless people in December 2022 to see how the participants would choose to spend their money.

So far, many individuals have reported feeling safer, experiencing better mental health, and having access to more stable living arrangements.

"Many participants reported that they have used the money to pay off debt, repair their car, secure housing and enroll in a course," Mark Donovan, founder and executive director of the Denver Basic Income Project, told Insider.

"These are all paths that could eventually lead participants out of poverty and allow them to be less dependent on social support programs," he added.

The study recruited about 800 individuals to participate in the program, and each person was assigned to one of three groups:

One group is receiving $1,000 a month for a year, another gets $6,500 up front and then $500 a month for the remainder of the year, and another receives just $50 a month.

Researchers found in the October report that more than a third of participants in the $500 group were able to live on their own by the six-month mark. At the start of the study, just 10% of that group was living independently.

The percentage of participants in the $1,000 group sleeping outside dropped from 6% all the way to zero six months later.

The percentage of people sleeping outside in the $500 and $50 groups declined as well, dropping from 10% to 3% in the $500 group, and 8% to 4% in the $50 group.

Out of all the groups, the number of people sleeping in shelters was cut in half, and 34% of people in the $1,000 group now have their own home or apartment.

“I went from being depressed, not having the things that I needed for me and my kids, to now being able to get what I need for my kids. ... I still have anxiety, but not as bad as I used to, just knowing that my kids will be okay," an unnamed participant told the nonprofit in a July report.

The Denver Basic Income Project, founded in 2021, obtained the money for the study through Donovan’s clothing business Wooden Ships, an investment in Tesla, a $2 million dollar donation from the city and other donations.