7 NPOs Key To California’s Guaranteed Income Program
7 NPOs Key To California’s Guaranteed Income Program

Seven nonprofits in California are partnering to implement the nation’s first state-funded guaranteed income program following the launch of similar pilot programs in dozens of medium and large cities across the country.

California Gov. Gavin Newsom announced the state will contribute $25.6 million to a pooled fund to be distributed among the seven organizations, each of which will be required to match 50% or more of what the state gives them and will be responsible for ensuring the money goes to its intended recipients.

The program, which the state legislature approved last year, will provide 1,975 Californians – primarily those who are pregnant or aging out of foster care – with payments of $600 to $1,200 per month for up to 18 months starting in late 2023.

Social Finance, a national impact and advisory nonprofit, will design and manage the program under the aegis of the California Department of Social Services (CDSS), a governor’s spokesperson told The NonProfit Times. Six philanthropic organizations – the Blue Shield of California Foundation, California Wellness Foundation, May and Stanley Smith Charitable Trust, Sierra Health Foundation, Silicon Valley Community Foundation, and the Weingart Foundation – have also pledged to support the fund with additional future contributions, according to the governor’s office.

“As people across the country struggle with global inflation, this guaranteed income pilot program provides some much-needed breathing room for the most vulnerable Californians,” Newsom said. “This public-private partnership will accelerate our ability to get money to these individuals and families, showcasing Californians coming together to support one another.”

Guaranteed income programs are designed to provide a steady, predictable stream of cash to financially needy recipients to spend on their particular needs in whatever way they see fit. The programs, which are intended to supplement income from work and other sources, typically have a qualifying process but are less bureaucratic than other social safety net programs.

Guaranteed income, an idea that proponents argue was first advocated by Dr. Martin Luther King, Jr., as the simplest and most direct way to alleviate poverty and inequity, was the subject of several limited experiments as far back as the 1960s under President Lyndon B. Johnson.

The concept was given new life in 2018 when the city of Stockton, California announced the nation’s first citywide guaranteed income program, known as the Stockton Economic Empowerment Demonstration (SEED). Michael Tubbs, the former Stockton mayor, went on to create in 2020 the organization Mayors for a Guaranteed Income. More than 30 medium and big-city mayors across the country have since joined.

California’s pilot program will build on the SEED program, according to the governor’s office.

The Jain Family Institute (JFI), a social science research organization, has since consulted on pilot programs in other U.S. cities and is leading an evaluation of a 42,000-person guaranteed income program in Marica, Brazil. 

Detractors of guaranteed income programs argue they create a disincentive to work and that reducing the cost of living and the cost for employers to hire new workers are more effective ways to alleviate poverty.

JFI, however, touts the concept as a way to provide individuals the temporary financial cushion they need to take risks and pursue new opportunities such as starting a business, taking a new job in another city, or advancing their education. The organization also states there is no evidence that the programs lead to people quitting their jobs.

While the California program will serve pregnant individuals and former foster youth, the seven partnering organizations will each develop their own income and other eligibility criteria and may extend the programs to others, said Scott Murray, a CDSS spokesperson.

The seven organizations will also be required to take part in an evaluation conducted by the Urban Institute and the University of California, Berkeley, Murray said. The seven participating organizations and the initial grants they will receive are as follows:

* Expecting Justice, City of Industry – $5 million (will provide 425 pregnant individuals $600 to $1,000 per month for 12 months)

* Inland Southern California United Way, Riverside – $5 million (will provide 500 pregnant and 150 former foster youth $600 per month for 18 months)

* iFoster, Truckee – $4.8 million (will provide 300 former foster youth $750 per month for 18 months)

* National Council of Jewish Women/Los Angeles section, Los Angeles – $3.7 million (will provide 150 pregnant individuals with diabetes $1,000 per month for 18 months)

* San Francisco Human Services Agency, San Francisco – $3.3 million (will provide 150 former foster youth $1,200 per month for 18 months)

* McKinleyville Community Collaborative, McKinleyville – $2.3 million (will provide 150 pregnant individuals $1,000 per month for 18 months)

* Ventura County Human Services Agency, Ventura – $1.5 million (will provide 150 former foster youth $1,000 per month for 18 months)