This blog was originally published by Philanthropy California.
The idea of guaranteed income has a long history but its modern, progressive origins in the U.S. are rooted in the racial and gender justice movements of the 1960s. Guaranteed income (GI) is a cash payment provided on a regular basis to members of a community with no strings attached and no work requirements. The pandemic showed us that cash can mitigate economic precarity, bolster family incomes, and prevent poverty. Between pandemic stimulus checks, the expanded Child Tax Credit, and the expanded Earned Income Tax Credit, the U.S. government provided nearly $1 trillion in direct, unrestricted cash payments to individuals. These efforts moved 11.7 million people out of poverty.
In recent years, GI programs have launched around the US at a record pace spurred by heightened economic precarity brought on by COVID and deepening interest in addressing root causes of economic inequities. There are now over 70 mayor-led GI pilots in the US, which are part of the Mayors for Guaranteed Income movement created by former mayor of Stockton Mayor Michael Tubbs, who launched the first mayoral-led GI initiative in California – Stockton Economic Empowerment Demonstration (SEED). Research on early pilots like SEED showed that GI reduces month-to-month income volatility, which increases participants’ financial security, opportunities for self-determination, and improves emotional health. It also improves employment, as well as people’s ability to cover unexpected expenses. There are also anecdotal cases where individuals have been able to increase their assets by paying down debt or purchasing a home.
Guaranteed Income: A Primer for Funders
To capitalize on the growing funder interest in GI, Asset Funders Network (AFN), Economic Security Project (ESP), Springboard to Opportunity and the Center for High Impact Philanthropy at the University of Pennsylvania co-produced a primer to highlight strategic investments funders can make to advance evidence-based GI solutions, which include funding:
- Direct service efforts to test and refine what a scaled-up program could look like;
- System and capacity-building efforts that build the broader field;
- Policy and advocacy to ensure the long-term political viability of cash-based policies;
- Research and innovation to build evidence and strengthen the case for cash.
In California, there has been a groundswell of GI initiatives and with that tremendous opportunities to support this vital work, including an innovative public/private collaboration to match public dollars to support GI pilots.
California Guaranteed Income Fund
In California, home to more than 20 GI pilots, Governor Newsom announced a groundbreaking $35 million investment in 2021 to support local and tribal governments and community-based organizations to establish new guaranteed income pilots or expand existing ones in California. The funding will prioritize pregnant individuals and youth aging out of extended foster care, and will include a rigorous statewide impact and implementation evaluation led by the Urban Institute. This funding opportunity requires a 50% match, providing funders a rare opportunity to leverage state funding and ensure the success and equitable implementation of state-guaranteed income pilots.
Seeing the opportunity to galvanize funders throughout CA, the Governor’s Office of Public Private Partnerships, AFN, ESP, MGI, and Social Finance are collaborating on a California Guaranteed Income Fund (the Fund) to leverage state funding. This $5 million pooled philanthropic fund will:
- Provide matching funds for the Guaranteed Income Pilot Program Grantees and Preserve Access to Critical Benefits, as philanthropic matching funds will help ensure payments to participants do not count as income
- Enable Geographic Equity by focusing support on under-resourced communities such as Tribal nations, the Central Valley, and the north state; and
- Advance Learnings on Benefits Interaction to Inform Safety Net Policy, supporting conversations about the role of GI within a broader suite of policies for economic justice
This fund can help us better understand the change that GI creates and how it advances racial equity for communities disproportionately impacted by poverty and wealth disparities. It will shape how GI can interact with existing local policies, benefits, and labor markets while outlining best practices for design, implementation, and infrastructure needs.
In California, philanthropy has a golden opportunity to leverage public sector dollars which are usually the hardest to unlock. This is a critical time and opportunity for funders to act. To ensure economic security for all, our public safety net and policies need to evolve, and that means getting serious about unrestricted cash support at the federal and state levels. Strategies exist to provide direct cash support to those who need it most, yet there are critical policy levers that can be implemented now to ensure those who need it most have the resources they need to be resilient, to build and preserve wealth, and ultimately thrive.