An innovative study in Vancouver challenged common stereotypes about homelessness by providing 50 recently homeless individuals with $7,500 Canadian dollars each—no conditions attached. The results revealed that most recipients prioritized housing, food, and essential expenses, significantly reducing their time spent homeless compared to those who received no cash.
- Participants used funds mainly for rent, food, and transportation
- Cash recipients ended homelessness faster and saved more money
- Spending on alcohol, cigarettes, and drugs dropped by 39%
What happened
In 2018, the New Leaf Project in Vancouver gave 50 people who had recently become homeless a lump sum of 7,500 Canadian dollars each, without any conditions on how the money should be spent. This was part of an experiment conducted by Foundations for Social Change together with the University of British Columbia. A control group of 65 individuals received no cash to provide comparative data.
Over the course of a year, researchers observed that those who received the cash ended up spending fewer days homeless, moved into stable housing more quickly, and accumulated some savings. Contrary to common assumptions, spending on alcohol, cigarettes, and drugs decreased by 39%. Instead, the money was predominantly used for practical needs such as rent, food, clothing, and transportation.
Why it feels good
This experiment challenges prevailing stereotypes about homelessness and financial responsibility. Rather than continuing harmful habits, recipients invested the cash in ways that helped regain their footing and build a more stable life. One participant, Ray, even used the opportunity to take a computer course and pursue a career supporting others with addiction problems.
The study also revealed broader social biases: the public tends to mistrust homeless individuals' ability to manage money, but this suspicion diminishes when presented with real examples or data. The human story behind the numbers highlights dignity, hope, and the potential for transformation when barriers like immediate access to funds are removed.
What to enjoy or watch next
The success of the New Leaf Project has led to its expansion, now reaching hundreds of participants and distributing over a million dollars in unconditional cash transfers. It is a promising model for policymakers considering effective strategies to alleviate homelessness and reduce pressure on emergency shelter systems.
While not a cure-all for chronic homelessness or addiction, this approach offers a faster, more cost-effective, and respectful way to support people during critical moments of need. Future research and programs may build on these insights, exploring how direct financial aid can be part of a broader solution that includes social services, mental health care, and community support.