Andrew Yang ran for president on the single issue of universal basic income (UBI), which then seemed like a reasonably fringe idea. Months later, the government sent out $1,200 checks to millions of Americans devastated by the economic downturn, in a move that vaguely resembled Yang’s concept of a “Freedom Dividend.”
In reaction to the pandemic-produced recession, a number of nongovernmental, philanthropic cash relief programs have sprung up, including The $1K Project which has just partnered with Yang. Started by venture capital investors Alex Iskold and Minda Brusse, the initiative is a direct-giving service that matches “trusted” cash donors to those in current economic distress—and whose needs were not met by the government’s paltry actions.
So, in April, Iskold thought: “What if, instead of waiting for the government to provide aid, we could just get Americans who have the means, to help families who are devastated by this pandemic?”
Connecting those benefactors to the families happens via a process of nominations and sponsorships. Families can be nominated to receive cash by people or organizations who know and can vouch for them. Small business employers may nominate workers they’ve been forced to lay off or furlough. To reach a wider span of recipients, the group has also partnered with 37 nonprofits, representing different industries, geographic locations, and communities, which can nominate people in their networks.
“The core of what we were trying to accomplish was: how can we fund families fast?” Brusse says. The “trusted connection” model helps with the speed. The nominees have already been vetted by trusted people or groups. Approved families join a short queue and are contacted once matched with a “sponsor,” a person who’s volunteered to send money to a beneficiary.
Usually, that’s in the form of $3,000, over a three-month period or in a lump sum. The team sets up a GoFundMe page for each match, and using that page the recipient gets direct transfers from an anonymous donor. As of August 6, 395 people had received the $3,000, totaling almost $1.2 million. Givers who don’t have the full $3,000 can also donate smaller sums via text, starting at $50.
Humanity Forward, Andrew Yang’s nonprofit created to further the UBI movement after his presidential run, announced last week it would set aside $1 million to match all donations going forward, essentially doubling the number of families able to receive funds. Yang tells Fast Company that part of the appeal was the direct transfer model, allowing sponsors to feel like they’re actively helping specific individuals, without any of their dollars going to organization overheads or fees. “People just like to help other people,” he says. “It’s wired into our humanity.”
Yang views the government’s stimulus distribution as a “UBI trial,” but “insufficient.” He would have repeated the payouts every month and, instead of means-testing folks, he’d have sent checks to “just about everyone under the sun.” Iskold agrees on the major shortcomings of the state response, which generated an urgent need for a charitable alternative. “It wasn’t a fair system,” Iskold says. “It wasn’t a thoughtful system. They dispatched the money in a dysfunctional way.”
The $1K Project isn’t strictly UBI, because it’s not public or universal, but Yang says it shows the positive impact that UBI could have. “We’re seeing now that cash in people’s hands has an incredibly powerful effect,” he says. Iskold reports that recipients have been spending their sums on essentials like food, rent, and electricity. Rather than a long-term solution, he views the payments as a “bridge to help families get back on their feet.”
Yang agreed that the government still has a responsibility to provide a safety net and basic affordable public programs like housing, healthcare, and education, but he says “we need to reduce those costs to the American people,” he says, “because they’re making everyone miserable and destitute.”
But, so far, there’s little sign of the government’s response progressing any further from its half-hearted state. “I believe that gap is going to persist for a while, unless we have some massive systemic change,” Brusse says. “It’s an unfortunate reality that I think we’re going to continue to need philanthropy to fill in.”
Iskold envisions that the program will have to continue for some time to come, noting a particular concern about a looming eviction crisis ahead. “I think it’s going to be needed for at least 12 [more] months,” he says. “Potentially longer.”