“They’ll just use it to buy drugs.”
It’s a rationale you’ve likely heard before in discussions of giving money to homeless people. The founders of GiveCard would dispute that idea. This Boston-based FintTech nonprofit – profiled recently in the Boston Globe – offers prepaid debit cards to help housing-insecure people become more financially stable.
As the profile says, cardholders typically get $250 a month for three months, with the program distributing more than 180 cards since its launch in April. Users can pay for virtually anything, although the cards won’t work at liquor or tobacco stores, ATMs or casinos.
Founders Lurein Perera and Diksha Thach say they designed GiveCard for our increasingly cashless world, in which many people would like to offer money to the homeless, but simply aren’t carrying any bills in their wallet.
The program is launching at a time where homelessness is increasing in the U.S., according to the Department of Housing and Urban Development, which estimates 580,000 people were homeless last year.
Earlier this year, the Consumer Finance Protection Bureau reported there were 11 million people at risk of losing housing, either due to evictions or foreclosure, a figure that encompasses nearly 10 percent American households.
The program’s digital nature also lets the startup track anonymized transaction info and see how users are progressing. Participants must be willing to share spending data, meet with the GiveCard team twice a month and have a reliable way to communicate.
Perera said that when people first receive their cards, they tend to make smaller, more frequent purchases initially. But as they get closer to securing housing, everyday spending falls off as they save for a rental deposit.
“Our thesis is just give people money and give people autonomy and trust that they’ll uplift themselves in whatever ways they see fit,” Perera said. “And that’s starting to show to be true.”
So far, three people in the 20-person pilot program have moved to permanent or transitional housing with the help of the card. Another bought a phone, which let her contact shelters and government agencies, and a man who had spent 50 years unhoused used his card to travel to Colorado, meeting his grandchild for the first time.
“These are just things that people aren’t able to do because they’re so entrenched in poverty,” Perera said. “And government assistance is awesome, but it’s not there yet. It’s not designed to give people this type of freedom. Like with food stamps, you can’t even buy a hot meal.”