{"id":7780,"date":"2022-12-07T10:13:00","date_gmt":"2022-12-07T15:13:00","guid":{"rendered":"https:\/\/www.nptrust.org\/?p=7780"},"modified":"2025-02-07T11:33:21","modified_gmt":"2025-02-07T16:33:21","slug":"direct-cash-giving-and-basic-income-a-primer-for-donors","status":"publish","type":"post","link":"https:\/\/www.nptrust.org\/philanthropic-resources\/philanthropist\/direct-cash-giving-and-basic-income-a-primer-for-donors\/","title":{"rendered":"Direct Cash Giving and Basic Income: A Primer for Donors\u00a0"},"content":{"rendered":"
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Direct cash giving, an approach for reducing poverty which provides unconditional, recurring payments to low-income individuals and households, has gained momentum in philanthropy circles over the past decade. Although the ideas behind direct cash transfers and basic income have long histories, the model was previously somewhat restricted to public policy and advocacy circles. But the combination of rising inequality and the impact of COVID-19 on low-income households has philanthropists\u2014foundations as well as individual donors and families\u2014paying attention.<\/p>\n\n\n\n

In the past, direct cash giving was more common in international development efforts and giving overseas, but the practice has gone domestic. In recent years, advocates, researchers, municipal governments and local nonprofits have been convening pilot programs and case studies across the U.S.<\/p>\n\n\n\n

The concept is simple: instead of giving to an organization or program working to alleviate poverty by addressing healthcare, education, food insecurity or housing, donors give funds to organizations who then route the cash directly to eligible recipients, no strings attached. According to the philosophy of the approach, recipients themselves know best how to use these funds and can direct them how they please; whether they go toward rent or utilities, a child\u2019s school supplies or paying down a healthcare bill. The practice is being adapted to fit new and emerging charitable needs. For example, in March 2022, UNICEF launched a direct cash transfer program<\/a> in collaboration with the Ukrainian government to support Ukrainian households with young children. In the U.S., new programs offering direct cash transfers are focused on youth experiencing homelessness<\/a>.<\/p>\n\n\n\n

While the concept of direct cash giving may be straightforward, putting it into practice can open a universe of questions about charitable impact, public policy and personal agency. In her book on the topic, Give People Money<\/a><\/em>, journalist Annie Lowrey calls cash transfers a \u201ccomplicated, transformative, mind-bending” approach to poverty. So, what should donors who are interested in direct cash transfers know before committing their own charitable capital? We have assembled a short primer on the practice, including its basic tenants, recent examples and some of the debates and ongoing conversations within the emerging world of direct cash giving.<\/p>\n\n\n\n

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Principles<\/h3>\n\n\n\n

The practice today goes by many names: direct giving, direct cash transfers (DCT) or unconditional cash transfers (UCT). The work also intersects (but does not completely overlap with) both microfinance and advocacy supporting a guaranteed, basic or universal basic income (UBI) as a matter of public policy.<\/p>\n\n\n\n

No matter what it is called, certain basic principles apply:<\/p>\n\n\n\n