COMPTON, CALIFORNIA - APRIL 26: An aerial view shows a pedestrian on a quiet neighborhood street as residents continue to stay at home to fight the coronavirus pandemic on April 26, 2020 in the East Rancho Dominguez section of Compton, California on April 26, 2020. Los Angeles County has extend its stay-at-home order through at least May 15 and warned that restrictions could be extended into the summer. Officials have forecast that up to 30 percent of LA County residents could be infected by mid-summer without improvements to social distancing behavior. (Photo by David McNew/Getty Images)
An aerial view of a street in Compton, CADavid McNew/Getty Images
  • At least 11 cities across the US have adopted guaranteed basic income programs for a select group of their citizens.
  • The universal basic income-inspired programs have been gaining popularity as COVID increases financial insecurity
  • The group running Compton's program says UBI-like programs help people cover basic expenses without the downsides of welfare.

Christine Sasner had no savings and was running low on funds from her last unemployment check when she heard about the Compton Pledge, the largest city-based guaranteed income program in the United States.

The $1,800 check that she has received every three months since January has rehabilitated her family and enabled her to assist others in her neighborhood through a homeless nonprofit she founded in partnership with her church. 

"That money didn't just save me but it helped all the other people I see in Compton every day," she told California news site Capital & Main. "Soap. Something to eat. Band-Aids. Whatever they need."

This year, guaranteed income programs like Compton Pledge have seen a surge in popularity throughout the US. At least 11 direct-cash experiments will come into effect by the end of the year, Bloomberg CityLab reported in January. The group behind Compton Pledge argues that guaranteed income payments supplement government welfare programs and highlight what's wrong with those more traditional — and often underfunded — approaches to fighting poverty. 

"Guaranteed income makes a case for investing in our undocumented neighbors and formerly incarcerated residents," Nika Soon-Shiong, a Compton Pledge Co-Director, told Insider. "In doing so, it addresses the reality of the nation's fragmented, punitive welfare structure."

Compton Pledge is looking to expand its mission nationwide by partnering with similar programs in other cities such as Eat Chicago, which supports formerly incarcerated residents in Chicago with monthly checks. Soon-Shiong says Compton Pledge is in talks to act as a partner for two additional cities by this January. 

UBI could be a crucial addition to government welfare programs

Compton Pledge and other programs like it bet on their money being a crucial addition to government welfare programs, which are often underfunded and come with strings attached.

Funds from the Compton Pledge does not impact one's other benefits, and its payments aren't taxable. The payments also aren't considered to be "public charge," which affects some immigrants' abilities to become American citizens. Similarly, undocumented residents and formerly incarcerated people also benefit from Compton Pledge, people who would otherwise be ineligible for government welfare programs.

The Compton Pledge secured government waivers to ensure that participants can maintain their access to existing benefits, Soon-Shiong told Capital & Main. "In instances when the government waiver does not apply, the Pledge has also set up what's called a hold harmless fund to support those who may potentially face financial losses from participating," she said. 

Guaranteed income programs are gaining steam throughout the country 

The COVID-19 pandemic caused widespread financial strife and uncertainty, with many arguing that the federal government wasn't doing enough to meet newfound — and worsening — income gaps. That explains why guaranteed income programs, which aren't a new idea, have been getting a second wind this year from politicians and activists. 

Former 2020 U.S. presidential candidate Andrew Yang gained a large grassroots following thanks largely to a platform centered around a universal basic income. Yang proposed that every American adult should receive $1,000 a month as a way of ending poverty and boosting the economy. 

The experiments transpiring throughout the country this year have been less broad, offering stipends to a select number of families over a finite period of time, like the Compton Pledge. The group has dispersed $4 million in funding so far, out of the $9.2 million they've raised. Currently, they're supporting 800 low-income households in Compton, each of which will receive funds for two years. 

Recipients of Compton Pledge funds have been able to pay for food and rent, save money toward mortgages, and start small businesses, Soon-Shiong said. Three recipients, including Christine, have even used portions of their funds to launch non-profit organizations in Compton. 

"Christine is a wonderful testament to participants using these funds to actually start local non-profits and support their neighbors," Soon-Shiong said. "it goes one step further than disproving harmful welfare stereotypes… Not only are people not buying drugs and alcohol, but we're seeing them use the funds to give back to their communities." 

Read the original article on Business Insider