Denver Basic Income Project Will Test Giving Money to Homeless

Hundreds of homeless individuals in Denver could soon receive cash payments via the Denver Basic Income Project.
As the pandemic descended, Mark Donovan, a 53-year-old Denver resident, watched lots of people lose their jobs while his own net worth skyrocketed. "I couldn’t reconcile that personally," says Donovan, who particularly benefited from his investments in Tesla, a company whose stock soared last year.

So he decided to use some of his money to help others. In June 2020, Donovan doled out personal grants of $1,000 a month through the end of the year to twelve individuals. "I was struck profoundly by what a difference it made for them and how simple and immediate it was for them," he recalls.

And now the entrepreneur, who co-founded a Bali-based clothing company in the early 1990s, has much loftier goals.

Early this year, Donovan formed the Denver Basic Income Project, which will provide 520 people experiencing homelessness in the city with cash, no strings attached. Donovan has already anted up $500,000 of his own money for the project, which he hopes to launch in partnership with the University of Denver in September. Since the total price tag will be an estimated $6 million, he's also fundraising and says he has gotten sizable commitments from foundations and individual donors.

The recipients will be split into two groups: one cohort of 260 individuals receiving $1,000 a month for twelve months, and a second of 260 individuals receiving $6,500 up front and $500 per month for the remaining eleven months. There will also be a 300-person control group, with each member getting $50 per month for participating in the project.

The concept of giving cash directly to people struggling financially has gained traction in recent years. Andrew Yang, a 2020 presidential candidate, made establishing a universal basic income level part of his platform.

The New Leaf Project in Vancouver, which started in the middle of 2018 and involved doling out $7,500 to people experiencing homelessness, led to "measurable improvements" for participants, according to the New Leaf Project website.

"Cash recipients moved into stable housing faster than non-cash participants and overall, spent fewer days homeless," New Leaf reports, and "for those who received the cash, food security increased in the first month and remained steady over time." The project followed 115 total participants across the cash recipient and non-recipient categories.

"Most people that are working in this space already feel that the efficacy of direct cash continues to be proven study after study, but how to do that with different communities and different circumstances is not a one-size-fits-all solution," notes Donovan. "The money in all of these programs is largely spent on essentials, whether it’s food, rent, fixing a car, or taking advantage of some type of opportunity that they couldn’t previously take advantage of."

Donovan is working with the DU Center for Housing and Homelessness Research to arrange for those receiving money through the program to also participate in a randomized control trial.

"We’d like to invite every single person to participate in the research," says Jennifer Wilson, one of the leads on the research project, who will soon be awarded her Ph.D. in social work from DU. "All of the researchers on the project, we’re all social workers. We care deeply about this work. A lot of us have a practice background around working with folks who are unhoused or in community-based settings or with nonprofits."

Donovan, Wilson and others working on the project say they'll ensure that the pool of recipients is diverse and representative of Denver's homeless population, which has an over-representation of Black and Native American individuals relative to the city's population as a whole. They plan to work with a collective of service providers on the recruitment process.

Not everyone who is homeless will necessarily qualify for the program, particularly if it seems that an infusion of cash might adversely affect their lives. "We’re not looking to outright exclude anyone who reports any type of substance use or any type of severe mental illness symptoms," explains Wilson. "We just want to make sure that people are able to safely maintain in a program like this. So we are asking questions about treatment."

The Denver Basic Income Project has won the support of Mayor Michael Hancock, who refers to it as "an opportunity to explore how the philanthropic community and the private sector can augment public support for those living in poverty, particularly our unhoused neighbors, and extend that hand up to stability.”

Donovan would like to see others step up to support the project, too.

"We’re hoping that the community responds to this message of 'We can do it now on our own. We don’t need to wait for anyone else,'" he says.