* From Catholic Charities…

Hi, Rich -

I hope you are doing well! Wanted to send you a blog post idea related to the continued state budget mess.

Catholic Charities just completed a major study with the University of Notre Dame that was featured in the Journal of Science last week. It proves that homeless prevention programs work and save tens of thousands of taxpayer dollars per person. However, the State budget impasse continues to threaten funding to this program. In fact, last year none of the funds were released and we have yet to receive funds for this fiscal year, putting thousands of Chicagoans in danger of becoming homeless.

We are the only city in the country where this study could be conducted because of our linked databases with those who call the homeless prevention call center and the shelter system.

The study shows that those individuals and families who receive short term homeless prevention financial assistance are more than 70% less likely to enter a shelter within 6 months than those who do not receive the assistance. This program works yet funds are not being released from the state.

* Science Magazine…

If someone is about to become homeless, giving them a single cash infusion, averaging about $1000, may be enough to keep them off the streets for at least 2 years. That’s the conclusion of a new study, which finds that programs that proactively assist those in need don’t just help the victims—they may benefit society as a whole. […]

Homelessness isn’t just bad for its sufferers—it shortens life span and hurts kids in school—it’s a burden on everyone else. Previous studies have concluded that a single period of homelessness can cost taxpayers $20,000 or more, in the form of welfare, policing, health care, maintaining homeless shelters, and other expenses. To combat homelessness, philanthropic organizations have either tried to prevent people from losing their homes in the first place or help them regain housing after they are already destitute. But there aren’t many data on whether giving cash to people on the brink of becoming homeless actually prevents them from living on the street.

So economist James Sullivan of the University of Notre Dame in South Bend, Indiana, took advantage of a natural experiment. Funding for homelessness prevention programs is highly unpredictable, and thus many programs are often temporarily unable to give money to people about to lose their homes, even if they qualify for the assistance. That allowed him and his colleagues to compare the eventual fate of individuals and families who called into a homelessness prevention call center in Chicago, Illinois, when funds were available versus those who called when funds were not.

The programs work by giving one-time cash quantities to people on the brink of homelessness who can demonstrate that they will be able to pay rent by themselves in the future, but who have been afflicted by some nonrecurring crisis, such as a medical bill. Recipients need to be able to demonstrate consistent future income, and the amount given needs to actually cover their housing expenses for the month. The average amount paid out, according to Sullivan, is about $1000.

The team tracked the two groups for several months. Those who called when funding was available—and received the cash infusion—were 88% less likely to become homeless after 3 months and 76% less likely after 6 months, the researchers report today in Science. “We found no evidence that this effect fades away,” Sullivan says. “There is evidence that it’s a sustained impact up to 2 years later.”

Although it might seem obvious that giving people money would keep them off the street, many antiwelfare critics have argued that such charity only prolongs the decline into homelessness. But that appears not to be the case, Sullivan says.

The study is here.

* From a Catholic Charities press release…

In a groundbreaking new study conducted in Chicago and published last Thursday in the Journal of Science, it is revealed that when homeless prevention funds are available, an individual’s chance of becoming homeless within 6 months is reduced by 76 percent. The study proves that a minimal investment averaging $2,400 per person to prevent someone from becoming homeless saves more than $20,000 per person, per year in taxpayer funds that are needed to support a person in a shelter and with other services.

However, the State budget impasse has meant funding for homeless prevention programs is in limbo and more than $1 million in preventive funding was not available in fiscal year 2016. In Chicago, homeless prevention funds are disbursed to dozens of agencies through All Chicago, which receives about $2 million per year in funding, more than $1 million of which comes from the State of Illinois. In 2014, homeless prevention funds ensured 5,000 individuals and families did not become homeless. Because of the state budget impasse, that number was reduced to 3,000 last year. […]

The study followed 4,500 Chicago individuals and families from 2010 – 2012. The callers who received funding were significantly less likely to enter a shelter within 6 months. In particular:

Those calling when funds are available are 76 percent less likely to enter a shelter within 6 months
Those calling when funds are available spend 2.1 fewer days in a shelter over a 6 month period
Callers with especially low incomes (those with incomes below $750 per month) who call when funds are available are 88 percent less likely to enter a shelter

Discuss.