Let Them Eat Cash
nytimes.com
nytimes.com
> I haven’t spent any time with the homeless in the United States. Maybe I’d see that the differences are profound. But I ask myself: If homeless people and drug users in Liberia don’t misuse cash, why would we expect the homeless in New York to waste it?
Some percentage of people are homeless simply because they lack resources. The others are homeless because they have trouble functioning in normal society, either because of mental health issues, severe addictions, disabilities and trauma from war, etc. I would not be surprised if, due to the disparity in the overall wealth of the two places, homeless people in New York skewed much more into the latter group than homeless people in Liberia.
Some statistics: http://www.washingtonpost.com/wp-dyn/content/article/2010/07....
Note that the vast majority of the homeless are not what we think of as "chronically homeless." But about 5-6% of them are, and that subset accounts for about 60% of the resources spent fighting homelessness. And of that subset, 30-40% have "severe mental illness."
Its the same deal with disinterest in the prison industrial complex. 1/4 of all black men in or have been in prison, well... lots of people not seeing a problem with that. If the demographics inside and outside prison were (at least racially) identical, lots of people would have a problem with "the system" as it is. But as long as its a Black problem... no problemo (if you're not Black, anyway)
(edited to add, and needless to say the example of middle vs lower doesn't mean any of the other classes like any other class very much)
What kind of culture are you talking about? The culture of being friends and neighbors with the police officers and politicians who can shield you and your children from the consequences of their actions?
So, while I'm not arguing about the absolute number, it's the proportion that affects my perceptions. Frankly, it's demoralizing.
I would. Mainly because Liberia, from 1989 to 1996, was in the middle of a civil war that claimed the lives of 200,000 and displaced millions more into refugee camps. Liberia has been the center of coup and counter-coup and counter-counter-coup since 1980. I would be extraordinarily surprised if the incidence of PTSD and disabilities from trauma were lower there than they are here.
And given that neither USA nor Liberia have significant mental health facilities for those without the means to obtain it (we just dump them in jail), I doubt the incidence of other mental illness, as a percentage of population, are any different.
He's not saying there are more people with mental health issues in NY, but rather than there are more homeless people for other reasons (i.e. economic) in Liberia.
Most homeless here in the states are transitionally homeless - usually for less than a month. Usually they're families, homeless for economic reasons. I'd be willing to wager that the ratio of mentally ill (I consider alcoholism and drug addiction to be mental illnesses) homeless to economically homeless are similar in both countries.
You also touch on another important topic, which is mental health is also sorely needed for many people. It is very expensive, not widely available and essential to those who are suffering with those type of illnesses. Especially if they do not realize it.
Anecdotally, an overwhelming number of the "visible homeless" in America have mental illness or at least behave in a unemployable manner.
I imagine there is another (larger?) slice of homeless that live in shelters/elsewhere and are less obvious and could function "normally" in society given the means.
The 'visible' homeless are typically chronically homeless, and have been for decades.
In 2010, Jim Rankin, a reporter for The Toronto Star, asked
himself the same question. So he handed out five $50 prepaid
Visa and MasterCard gift cards to panhandlers. What did they
buy? Mostly food. Some phone minutes and clothes. A couple
bought liquor as well.
Waste can't be completely eliminated, and giving the cash to an organization also doesn't eliminate waste.
But a dice is the antithesis of human behavior. The example I was talking about was almost completely subjective in nature and with 5 samples from an (assumingly) untrained observer (given he/she was a reporter, not a clinical researcher) leads to a whole lot of observation/experimenter bias.
So while my original if n=5, reject may not have been 100% accurate, in the case of human behavioral analyses, I stand by it.
People put money to productive use when productive uses are available and they won't be penalized for long term planning.
The first article never explained that he was blocked by the charity that helped in the first place.
I'm saddened that the charity didn't go as planned. In most cases people know what they need best, rich or poor.
I mean, I'm just making numbers up, but you aren't even doing that.
I'm more skeptical of the efficacy of cash for the chronically homeless, who often suffer from debilitating conditions like profound schizophrenia that intuitively one would think would need to be treated first. I say this with compassion, I live at the edge of the tenderloin and have a number of neighbors who are homeless and ill. That said, intuition is one thing and experimental results are another. I think it's an experiment that should be tried, and if a donor wants to do it I'm disappointed in an organization that would get in the way.
http://www.thisamericanlife.org/radio-archives/episode/503/i...
In Liberia I can't imagine that there are many soup kitchens or organizations like the NYC Rescue Mission. Thus, when an individual receives cash they will spend it on items such as food and clothing because these are basic neccessities. Perhaps the disutility of not having anything to eat or to wear is greater than the utility gained from using drugs. This also depends on the type of addiction.
Now imagine that you're homeless in NYC. Being homeless your standard of living is relatively poor, however you can still scour the bins for pizza leftovers or go to a place like the NYC Rescue Mission and get a meal. Homeless people might not be adequately dressed to withstand winter, but they do have something. So now when you get money, you spend it on your addiction because while life is painful, it's not painful enough to give up drugs.
I haven't read through the 19+ studies implicitly mentioned in the article, but this is definitely something that should be taken into consideration.
The jarring thing was that, only when I stopped to interact with him did I discover that, while he appeared physically healthy and of a working age with all limbs intact, he had an extreme speech impediment which was no doubt largely responsible for his homeless predicament.
That was less than 10 hours ago.
Another time, I went to a homeless shelter in London and met an Iranian man with a PhD and better English than most English people. He said he'd become homeless for economic reasons, the government had never helped him to get a foot in the door for another job, and nobody wanted to employ an older man from what they perceived as a funny country. The guy I went with, an older homeless dude I'd been chatting to now and then, used my presence to smuggle spoons out of the place for heroin.
Where I normally live, in China, a good portion of the homeless are on the street due to the lack of mental and other forms of health care.
Cash-in-hand, truth be told, fixes few of these problems... in every case the problems are generally societal and related to an absence of decent health care and government services, and logical drug laws.
When he handed out the micro-loans in Detroit (adjusted for local purchasing-power), people just pocketed it and walked without any consideration of paying back the loan. Hopefully, like in the article, they spent it mostly on useful things for themselves, like food or toothpaste.
He had several possible explanations for why they didn't keep with the program. One was cultural differences in entrepreneurship between the poor communities in the developing world vs those in the US.
But a more interesting reason I thought of is that there may not be much room for micro-financeable cottage industries in the US (like raising chickens for egg distribution, etc).
Mass produced (and lower quality) food and other goods are so cheap here that it's not clear how a micro-financed business could compete at the low end of the market like they potentially can overseas in a less developed society.
In fact, I think most cottage industries I've seen exclusively cater to the high end (maca root chocolate truffles made in handmade in Marin county, anyone?)
EDIT: wording
But not here: "Efforts to replicate solidarity lending in developed countries have generally not succeeded."
I think it could work here among the right groups. E.g. in the last century credit unions were very popular. These weren't just formed by employers and unions, but also by various immigrant groups in the big melting pot cities like New York. Those immigrants weren't desirable customers by existing banks, and so they were forced to form their own banks for both deposits and loans. And were quite successful.
What "qroup" did the borrowers in Detroit belong to?
The closest we have around here is "very small business owners". I see landscaping, housekeeping, small restaurants (e.g. yogurt shops), food carts, etc. They all involve a lot of hard work for relatively low pay!
It's possible to start a landscaping business with a microloan. But most other small businesses require more capital than that. Even a food cart requires thousands of dollars in equipment.
The "NYC homeless" on the other hand often are mentally ill, have no ties in the community, no home (duh...) and are usually unemployed, quite a few are or have been addicts.
The idea that these people could use the money for drugs and alcohol is actually a lot more warranted than in the general case.
Homelessness in developed countries is a completely different problem from poverty in developing countries. Still, it's hard to imagine that this charity is doing a better job with the money than they could do for themselves.
1. Giving cash to individuals or targeted groups in need is called cash transfers in the nonprofit sector. More specifically, conditional cash transfers or CCTs and governments spend more than $50 bn a year on this (depending on the definition, this can go up to $400bn a year!)
2. It would make sense for a lot of nonprofits to NOT EXIST in their current forms and instead be there to identify individuals and give them cash. If philanthropy was treated as a science with the objective of finding a method to maximize impact per dollar, there are good arguments to say that the null should be cash transfers for many cases. It's sad that that's not at all the case, especially for organizations funded by small private donors.
3. There are very few organizations/nonprofits/NGOs that do cash transfers in a way that you can reasonably know that almost all of your money is going to the poor: GiveDirectly and New Incentives.
GiveDirectly gives unconditional cash transfers (no strings attached) to people in need. New Incentives gives conditional cash transfers (based on fulfilling pre-defined health goals) to poor pregnant women with HIV.
4. The biggest issue with giving cash to the poor is to make sure that most of it goes to the poor instead of spending on either verifying these transfers, or transferring the cash to the beneficiaries. This may sound easy but since cash is so liquid, it has a tendency of getting "lost" with very little of it actually making it the beneficiary.
Very often people argue that poor people are poor because they don't know how to manage money and that they will do the same with the money you give them. Maybe they will, most likely they won't. They will likely use it in a way that benefits their life the most - to fulfill their greatest needs - which very often is food, shelter, and clothing. Still, if that's your only argument, than it should make sense to give to the very poor in developing countries who have likely not had the chance to escape the rigid cycle of poverty.
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If you think this article has merit beyond just being a great read, I would encourage you to donate to organizations doing cash transfers: www.newincentives.org www.givedirectly.com
Looks like administrative costs are about 10% of overhead (fundraising is a net positive, so I wouldn't hold it against them).
Disagree. Fundraising is net positive for the financials of an individual organization but not for society. Donors have a finite amount of money to donate to charity so convincing them to give it to you often just means they don't give it to someone else.
And even in the alternative that the donors would have spent the money in the general economy, that has obvious societal benefits as well, e.g. job creation or easier access to capital. It is better to have half as much money going to charities that spend 90% of it on programs than to have twice as much going to charities that only spent half of it on programs, because in the first alternative the other half of the money is at least going to something potentially productive rather than a zero sum competition between charities for donors.
That's not always true. Sometimes a potential donor doesn't give at all, so if you convince them to give, then this is a donation that would not otherwise exist.
You're making an assertion that needs some citations to back it up - on a prima-facie view, wealth not spent on charities generally sits in coffers or is used to make more money, which does nothing or little directly for the poor.
The view isn't whether the money is "being put to use" but of what qualitative use it's put to. For every angel investor or VC there is out there funding startups, there are 10x or more wealthy individuals who don't invest their wealth with any goal other than increasing what they have.
There is a side dish of distraction. You don't want bored masses of poor people wondering why the system picked them to be the bored masses of poor people. Better, cheaper (in the long run) to have them wait in line for 8 hours per day to get some .gov cheese. Why are all our people so poor? Who set us up to fail, and set them up to win? Who cares man, get in line for the cheese with the rest of us, only another two hours in line, I can taste that cheddar already.