Mark Donovan said he watched people lose jobs and paychecks during the pandemic while the balance in his bank account only rose higher. He started handing out money in Denver.
Donovan, an entrepreneur and founder of the Bali-based Wooden Ships clothing company, wants to go a step further through his newly formed nonprofit, the Denver Basic Income Project.
In a fairly unique move, Donovan wants to give a $6,500 one-time payment to people experiencing homelessness, followed by monthly payments of $500 for a year.
He has the blessing of Denver Mayor Michael Hancock, though a spokesman for the mayor said the project won’t receive any city funding.
“The Denver Basic Income Project is an opportunity to explore how the philanthropic community and the private sector can augment public support for those living in poverty, particularly our unhoused neighbors, and extend that hand up to stability,” Hancock said Thursday in a news release about the project’s launch.
The project is looking for large and small donations with the hope of raising a total of about $6 million, said Donovan, who put in $500,000 of his own money. The payments could begin in July, he said, and maybe more in September.
“All indications so far are that when you provide a basic income floor accompanied with some trust, respect and some kindness, that the majority of people that get this will use it to improve their situation,” Donovan said.
Cities like Vancouver and Stockton, Calif., have tried similar programs, Donovan said. The New Leaf program in Vancouver gave money to people experiencing homelessness while Stockton’s program offered money to people in low-income neighborhoods.
Both helped people pay off credit cards, buy groceries and move into more stable housing, and the Vancouver project showed that spending on “temptation goods” like drugs and alcohol dropped 39%, according to The Atlantic and Business Insider.
Those findings fly in the face of the all-too-common misconception that handouts will only lead to bad behavior among people who have already made poor life choices, Donovan said. And a basic income could make substantial headway in helping Denver’s homeless population off the streets, likely at a lower cost than the city already spends on existing services.
“A little bit of financial stability makes all the difference,” he said.
But Jon Caldara, president of Denver’s conservative Independence Institute, called the program a moral hazard and asked what message “paying for people not working” would send to Denver’s other residents.
“What you subsidize, you get more of,” Caldara said.
If the nonprofit can raise the money, Donovan said he wants to hand out money to two groups of 260 people each and give $50 a month to a control group of 300 people for the same period of time to compare results.