Bread for the City's CashRx

 Guaranteed income (GI)   is a policy consisting of recurring, unconditional cash payments to individuals or households. This differs greatly from Universal Basic Income (UBI) which each provides recurring cash payments to individuals regardless of income or other characteristics. GI programs are more targeted and direct payments to people in poverty, people living in specific disinvested communities, or people facing other systemic disadvantages.

Guaranteed income has repeatedly been shown to  improve people’s lives,   with evaluations of GI programs showing consistent and significant:

• Decreases in poverty 
• Improvements in food security
• Improvements in physical and mental health
• Positive effects on school performance and cognitive development among children

Despite the recent buzz surrounding guaranteed income stemming from Andrew Yang’s UBI proposal during his 2020 presidential campaign, GI is not a new idea. Economic justice via guaranteed income and other social insurance policies were significant aims of the Civil Rights Movement of the 1960s. Policies for cash transfers through negative income taxes have been in place for over 50 years.

Evaluations have found recipients of guaranteed income consistently use the extra money to meet their basic needs. Researchers at the University of Pennsylvania  found  that recipients spent most of their money on food, housing, and other essentials. Guaranteed income also made recipients more than   twice as likely   to gain full-time employment, despite criticisms that the payments serve as work disincentives.

  Bread for the City  , a non-profit in Washington, D.C., aims to help low-income residents to develop “power to determine the future of their own communities.” They do so through programs that:

• Provide food, clothing, medical care, and legal/social services to reduce the burden of poverty
• Seek justice through community organizing and public advocacy
• Work to uproot racism
• Commit to treating clients with the dignity and respect all people deserve

Following the success of a guaranteed income program they worked on in conjunction with other D.C. based non-profits (  THRIVE  ), Bread for the City has launching an in-house guaranteed income project; “CashRx”, with funds from a   Health Equity grant   of $400,000 over two years.

The CashRx program is in its first phase, with one, small cohort of X participants. These participants work with the care management and the behavioral health team at Bread for the City. They receive equity-based cash transfers based on their needs on a monthly basis.

CashRx program consist of a small group of participants who work with the care management and the behavioral health team at Bread for the City. They receive equity-based cash transfers based on their needs with a goal of improving their health outcomes with a specific focus on the social determinants of health. In addition to improving the health outcomes of participants, Bread for the City aims to shift the narrative around guaranteed basic income to a positive one for participants and the community through ethical story-telling techniques focused on the program and participants.

The program distributes monthly cash disbursements without a formal limit. No formal limit was shared with participants, but, in program design, there was a loose monthly maximum of $2000.

Participants' social determinants of health were assessed during intake and they completed a worksheet that examined their income versus their expenses to calculate their monthly needs in order to determine the amount of their disbursement. Average monthly disbursements have ranged from $1,100 to $1,400.

Participants have spent the funds from the program mainly on housing and food needs. They have also reported that funds have allowed for increases in time spent with family and has provided help with financial emergencies.

Bread for the City had to intentionally exclude Supplemental Security Income (SSI) recipients from being eligible for the CashRx program because their SSI benefits would have been terminated due to the low income and asset qualifications associated with the program.

The organization also faced major hurdles in clearing particular IRS doctrines for nonprofits pertaining to direct cash giving programs. The main doctrine was around private inurement which indicates that people who are at the decision-making table should not benefit financially from the program nor that there be private benefits which is concerned with ensuring that benefits that flow through the program benefit the public at large and not a smaller, pre-determined private group. Crossing these doctrines risked the possibility of the organization losing their status as a non-profit. It took about a year after receiving the grant funding to work around the legal hurdles and thus begin disbursing funds to participants.

To overcome these challenges, Bread for the City consulted with multiple legal counsel teams. One group even helped them think through both short and long term options for advocating for changes in IRS doctrine so that organizations can do guranteed income work without such limitations. The legal teams helped the organization think through ways to avoid the issue of private inurement (though, this contradicts a core value of Bread for the City, people with lived experience SHOULD be at the decision-making table).

Participants have been receiving transfers since November 2023. The program is designed to give each participant 12 monthly transfers, though, with increased funding that will extend the project two more years, the organization is looking into prolonging participants' disbursements in order for them to receive disbursements for at least two years.

Bread for the City completed their first round of check-ins with participants in March 2024. During these check-ins, they had participants re-complete the questionnaire that assessed their social determinants of health and share about their experience with receiving the cash transfers so far. These check-ins will be completed on a quarterly basis, and they will also engage participants in narrative change/ethical storytelling projects. The organization is looking forward to enrolling a second cohort of participants in Summer 2024.

Bread for the City shared the following lessons with the Policy Innovation Lab:

1. They learned that there are many barriers that have been put in place that make the implementation of guaranteed income programs challenging.
2. Program planning and implementation is time consuming - the Health Equity Fund grant is for (2) years, but the group spent a whole year navigating legal barriers. If they could go back in time, they would have first, consulted with more guaranteed income programs to plan for such challenges.
3. Bread for the City is very conscious of other cash transfer programs and their outcomes. With CashRx, they aim to demonstrate something new. Narrative change has become a guiding light in the project, therefore, CashRx was built around participant self-determination and collection of both quantitative and qualitative data that shows that people are the experts of their own lives.

Guaranteed income improves the lives of individuals, families, and communities.