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INSIDE PHILANTHROPY: How the Economic Security Project Is Rallying Funders to Support Guaranteed Income

02. 08. 2023

“This idea of a guarantee of income has gone from the margins to the mainstream in three or four years. And that is like political warp speed.”

This article was originally published by Inside Philanthropy.

A few years ago, the idea of the United States providing people with guaranteed income — a set dollar amount each month with no strings attached — would have been unheard of. If the federal government regularly attempts to gut funding for existing public benefits, how could it possibly establish guaranteed income for all Americans?

But thanks to the efforts of philanthropic funders, advocates and local governments — along with the extraordinary circumstances brought on by the pandemic — guaranteed income is a movement that is rapidly gaining support. 

One funder in particular is leading the charge on the philanthropic front. The Economic Security Project (ESP) works to advance economic prosperity by providing research, supporting campaigns to get from pilot to policy, and working to change narratives about economic inequality and poverty. ESP serves as an intermediary funder and works with people from across sectors, including academics, researchers, organizers, practitioners and donors. Since 2017, the organization has moved more than $15 million to seed pilots, launch and run campaigns, and invest in the general guaranteed income field.

“We live in a country where one job is not enough, where people have to have two jobs to put food on the table,” said Natalie Foster, ESP’s president and founder. ”A guaranteed income would take a step forward to say, ‘People have the inherent worth and dignity that they deserve to work with financial freedom.’” 

ESP receives support from a long list of funders, including California Community Foundation, Ford Foundation, JPB Foundation, Kresge Foundation, Robert Wood Johnson Foundation, Rockefeller Foundation, W. K. Kellogg Foundation and Melville Charitable Trust. To date, Kresge has committed more than $5 million to supporting ESP’s guaranteed income work.

The two guaranteed income pilots ESP supported were some of the first in the nation, launching in 2017 and 2018. Now, there are more than 100 guaranteed income pilots across the U.S.

“This idea of a guarantee of income has gone from the margins to the mainstream in three or four years. And that is like political warp speed,” Foster said. 

Two pilot programs

ESP helped launch and fund guaranteed income pilot projects in Stockton, California, and Jackson, Mississippi.

The Stockton Economic Empowerment Demonstration (SEED) provided $500 every month for two years to randomly selected families in the city. The program was led by then-mayor Michael Tubbs. The Goldhirsh Foundation was the first funder outside of ESP to support the SEED program. In 2017, it committed $250,000 for the Stockton pilot. In 2019, Goldhirsh made a separate grant to ESP of $100,000 for its Earned Income Tax Credit work. 

“[Guaranteed income] was not in the modern mainstream lexicon. It was a little controversial,” said Tara Roth, president of the Goldhirsh Foundation. Goldhirsh recognized that as one of the first funders, its initial investment would provide traction for other funders to come in with their own support, leveraging much larger dollars and elevating the concept.

In addition to its support for ESP, Goldhirsh awarded $15,000 to the Compton Pledge, a California-based project of the Fund for Guaranteed Income during the foundation’s LA2050 Grants Challenge. 

“Something like a guaranteed income can make a difference between someone living on the street or in an apartment, someone eating, someone feeding a family, someone preventing a mental health or substance abuse crisis,” Roth said. “The peace of mind that can come from knowing that some basic needs can be met with this money is crucial to human survival, especially in this modern world.”

The second pilot ESP backed is the Magnolia Mother’s Trust by Springboard to Opportunities, a nonprofit located in Jackson, Mississippi, that provides programs and services for families that live in federally subsidized affordable housing.

Concerned that they weren’t moving the needle on poverty, Springboard partnered with ESP in 2017. The pilot focuses on Black mothers who make less than $12,000 a year and are 200% below the poverty index. The pilot launched in 2018 with 20 mothers.

“When we look at the data, Black women within this country are some of the most financially insecure. So recognizing that, we wanted to see what it would look like if we centered Black women or Black mothers specifically into the narrative around economic justice and economic security,” said Aisha Nyandoro, CEO of Springboard to Opportunities. Nyandoro also serves on ESP’s board.

Magnolia Mother’s Trust provides $1,000 a month for 12 months to Black mothers living in federally subsidized affordable housing. Springboard also opened a savings account and seeded it with $1,000 for every child of a Magnolia mother.

“We can demonstrate that we actually can trust families. You can trust families with limited financial resources with money, and they will go about doing what it is that they need for themselves and their families,” Nyandoro said. 

Now in its fourth cohort, Springboard has supported 300 women to date. 

What we’re learning about guaranteed income

ESP and other funders have learned a great deal from guaranteed income pilots. Aside from discovering that it is an incredibly popular idea, ESP has found that the additional money significantly improves people’s overall wellbeing.

“When people have even $500 they can count on coming in each month that sits alongside their wages, there is a significant reduction in stress,” Foster said. “What we heard from participants all around the country is that there’s room to breathe… and that impacts all kinds of things across their lives.” 

According to Foster, birth rates went up, hospital visits went down, people were able to see their doctor for regular checkups to prevent future health issues, which many often put off when they had limited time and money. 

“We’ve learned that it is possible to put in place efforts like guaranteed income that reduce burdens on families, reduce families entering into poverty, and other factors that support them in both their education as well as in the workforce,” said Chantel Rush Tebbe, who serves as managing director of the Kresge Foundation’s American Cities Program. “So it’s been a really important partnership and I think we’ve learned that we can design and implement these programs with input from the communities.”

One of the most common concerns about guaranteed income is that if people are given money, they will stop working. The pilots have shown that this is simply not true. Participants were able to save money, pay off debts and be prepared for unexpected situations. In the case of the Stockton pilot, people not only kept working, but they were able to search for better jobs. According to Foster, the group of people who received checks found full-time work at a 50% higher rate than the control group. 

“When the $500 started coming in, people knew they could, in fact, do that and carve time out to take that risk, and found the types of jobs that they want, that either worked for their schedule, that paid more, that were closer to home, had less of a commute, whatever it was. It gave workers more agency and I think that is a really important finding,” Foster said.

In addition, the money afforded individuals and families hope. In the case of Magnolia Mother’s Trust, 81% of the women reported feeling better about their future. 

Nyandoro said, “The powerful part of guaranteed income that I don’t think we talk about enough is that for many families, it gives you the ability to dream and it gives you the ability to lean into joy.”

From pilot to policy

One of the factors that has made guaranteed income more palatable is the pandemic. Not only did the majority of Americans receive some type of aid, often in the form of stimulus checks, a vast majority of families received the Child Tax Credit.

The Child Tax Credit has shown that not only can the federal government get money out to people, it can do so with speed, said Dr. Raquel T. Hatter, who is the managing director of the Human Services Program at the Kresge Foundation.

The Child Tax Credit also made a significant impact on child poverty. A study by the U.S. Census Bureau found that the Child Tax Credit lifted 2.9 million children out of poverty, with the expanded 2021 tax credit being responsible for 2.1 million of the total. 

Despite its popularity, efforts to restore the Child Tax Credit enhancement failed in Congress, with the measure being removed from the $1.7 trillion federal spending package signed into law late last year. 

That defeat underscored the challenge of translating a temporary benefit into a permanent one, even with the success of the expanded Child Tax Credit and guaranteed income pilots. Groups like ESP are crucial to closing this gap, since they can make connections between those who worked on the pilots and interested policymakers.

One way ESP is doing this is through the Guaranteed Income Community of Practice (GICP), which convenes policy experts, advocates, researchers, funders, practitioners and elected officials to collaborate in the effort of advancing unconditional cash programs. GICP is co-convened by ESP, Springboard to Opportunities, Standard Basic Income Lab, Mayors for a Guaranteed Income, the Center for Guaranteed Income Research at the University of Pennsylvania and Asset Funders Network. 

Part of this work involves challenging the narrative that people in poverty simply do not deserve help. ESP and other funders have been working to change this narrative to one that says everyone deserves the opportunity for economic prosperity, but the work is difficult.

“Changing narratives doesn’t happen overnight. When you’re talking about narrative, it really is a lie that individuals value, and they are entrenched ideologies. So doing the hard work of shifting ideology, shifting values, shifting narrative, that’s the long work. That’s the long arc of what it is that we’re doing,” Nyandoro said. 

As popular as guaranteed income is, it’s also crucial for those involved to sustain the public support and keep the pressure on. 

“I believe we are at the beginning of rewriting our social contract,” Foster said. “We know that the last 50 years of economic policymaking didn’t work for most families, and we are at the beginning of a new economic system… It’s hard, but I believe we will get there.”

Philanthropy’s role

Philanthropy is uniquely suited to advance guaranteed income, in that it can fund pilot projects while supporting policy, narrative change and power-building. And it meets many funders’ missions to improve Americans’ economic security. 

“Any given philanthropist who prioritizes economic success and wellbeing of families could see themselves in this space rapidly,” said Hatter. “The investment in this kind of work is essential. And I think there’s an avenue for philanthropy no matter what they select.”

Indeed, it has been popular among many mega-donors in recent years, including some surprising figures from the tech world, such as Jack Dorsey and Mark Zuckerberg. That’s caused some progressives to express concern about guaranteed income and philanthropy’s support for it as a patch for a broken economic system that still keeps the wealthiest at the top.

Hatter cautioned that as important as it is to enact a federal guaranteed income, it’s just as necessary to change the economic system that allows so many to struggle economically in the first place. 

“All that work, if we don’t change the system in and of itself, is pointless. We have to be clear about that,” Hatter said. “Even though we have all these pilots, what we’re not suggesting is that we can pilot our way out of this. There has to be a fundamental shift in the way the system is designed, that is driven and informed by people and community and partnership with others who are doing the work.”

Foster echoed Hatter’s belief that patchworking together enough pilots to create nationwide guaranteed income will not work. Rather, the pilots serve as demonstrations of what’s possible, of how guaranteed income helps people, in the hopes that it can influence policy at the state and federal level. 

”That’s the only way we will take this momentum that’s happening and make sure that it actually changes people’s lives.”