When COVID-19 barreled into the United States, food insecurity became one of the biggest issues across the country, as high rates of unemployment and reduced hours severely impacted household budgets. Prices increased as grocery store shelves were wiped out, with desperately needed food stuck in the commercial supply chain that provides food to restaurants and hotels. Moreover, the pandemic disrupted the free food options on which residents typically rely. With schools closed, many K–12 students could no longer access the meals they usually received at school, and COVID restrictions made distribution through food banks and pantries more difficult. Additionally, residents who were sick, isolating, quarantining, or elderly were unable to acquire food regularly.

These drastic changes made more people eligible for existing support programs, such as Unemployment Insurance and Supplemental Nutrition Assistance Program benefits. Importantly, several of these public programs were also expanded on a temporary basis to meet growing need. Even so, food insecurity remains a pressing challenge, and not everyone is getting support through these programs. Some people are not eligible, often because of their immigration status. Others may be eligible but are discouraged by application challenges or by fear created by the previous administration’s public charge rule. Still others want to avoid the stigma associated with accepting food support through government or private programs.

Because these challenges are so multifaceted, we believe that the simple solution of making direct cash payments (referred to as a “guaranteed income”) is the most direct and dignified way to meet everyone’s needs. This method of giving people cash to spend as they see fit on essentials like food and transportation was already gaining attention nationally before the pandemic hit (see the Case Studies section of this recent report). And over the past year, it has taken off further, with multiple rounds of federal stimulus checks sent to most American families and local pilot initiatives sprouting up around the country, even in our own back yard. While not all of these meet the full definition of guaranteed income—a predictable amount of money delivered regularly over a predictable period of time—the common theme is that people are becoming more familiar with the simple idea of giving families cash to meet their needs as they see fit.

Emergency Food Response in Chelsea and Closing Gaps with Guaranteed Income

Directly across the Mystic River from Boston, Chelsea is the smallest city in Massachusetts in land area but one of the most densely populated. Of about 50,000 residents, 75 percent identify as Latinx, 45 percent are foreign-born, and 30 percent have undocumented immigration status, making them ineligible for federal relief. The “average” Chelsea resident is 31 years old and working in the food and hospitality industry, which was decimated when the pandemic shuttered many businesses. In June 2020, Chelsea’s unemployment rate reached 24 percent. Making matters worse, Chelsea had one of the highest rates of COVID in the country, with over 30 percent of residents testing positive for the virus in April 2020.

To serve long lines of needy individuals, the city initially brought in approximately 45,000 pounds of food each day to supplement food that was already coming in via food pantries and nonprofits. As the COVID crisis persisted, City Manager Thomas Ambrosino realized this method could not continue into the winter: It would be cold and complicated and would require personnel that the city didn’t have.

In June 2020, an analysis we did with the City of Chelsea found that more than 17,000 residents were likely picking up food from the city’s emergency program; 9,000 were buying food themselves; 8,820 were on the federal food assistance program (SNAP); 7,000 were receiving food from pantries; 2,000 were picking up boxes of food from schools; and 250 were receiving senior delivery meals. Five thousand were ineligible for federal programs, living off little to no income, and unable to feed their families exclusively from free-meal sites.

These lessons from the first few months of the pandemic revealed that: 1) while direct food distribution was an invaluable piece of the puzzle, it couldn’t do everything, especially in winter months; 2) there was room to close the gap between those who qualified for public support programs (including unemployment insurance, stimulus checks, and SNAP) and those who were actually using them; and 3) in order to close the food-access gap entirely, we also needed to find ways to help those who did not qualify in the first place.

These dynamics are what led the Shah Family Foundation to collaborate with the United Way and the City of Chelsea to create the Chelsea Eats program. The program was designed to efficiently meet these varied challenges by thoughtfully supplementing existing local efforts. Chelsea Eats has three complementary functions:

1. Maximize participation in existing public programs. Using marketing, communications, and outreach to substantially increase the use of SNAP, Pandemic EBT (which provides food benefits to help families with children who are eligible for free or reduced-price school meals), and school meals. Specifically, our research estimates that there’s opportunity to expand SNAP enrollment by more than 70 percent (from just under 9,000 residents to over 15,000). We are also working to help boost school meal and senior meal participation and have already seen tremendous progress.
2. Expand local distribution of quality food. Working with community partners, food pantries, and local officials to optimize healthy food through these channels. This includes driving up school meal participation through delicious, culturally relevant food boxes produced locally by Stockpot Malden.
3. Provide direct cash payments through the Chelsea Eats debit card. The City of Chelsea had roughly $1.5 million in federal recovery money that traditionally would have gone to buy food for distribution at local sites, but because this type of distribution can be difficult and inefficient, we decided to come together, supplement this public funding with our philanthropic support and together create the guaranteed income component of Chelsea Eats instead. Instead of spending this money on emergency food sites, it’s now going directly to families to spend themselves. More than 3,000 low-income households responded to the initial announcement of the Chelsea Eats Card and were put into a lottery weighted by family size and other needs. Starting around Thanksgiving, 2,074 Chelsea households were enrolled, each receiving a monthly average of $400.

This strategic food-access plan is still a work in progress, with the direct cash component currently in its fourth month, and efforts to maximize utilization of all federal programs underway. While it’s still early, we anticipate that retail spending through SNAP and the guaranteed income program will relieve enormous pressure faced by food banks and community partners since the onset of the COVID-19 crisis. The existing research base on guaranteed income is clear that it’s a tremendously efficient and respectful way to support lower-income families, and our intent has always been that this demonstration pilot in Chelsea would help convince the state to become more comfortable spending its resources on programs like this in the future.

To evaluate the impact of the program, economist Jeff Liebman and his team at Harvard Kennedy School’s Rappaport Institute for Greater Boston are surveying and comparing the outcomes of those who are receiving the benefit with those who are not. The baseline survey, taken in September 2020, showed that 82 percent of approximately 2,100 respondents experienced a financial hardship in the past year. Of those, 55 percent reported they had lost a job, 34 percent had their work hours and/or pay reduced, and 45 percent experienced price increases in food and other essential items. Only 12.4 percent said they had access to enough of the kinds of food they wanted to eat, and 38 percent sometimes did not have enough to eat. In the same survey, 69.4 percent of respondents were concerned about having enough income for food, followed by 68.2 percent being concerned about not having enough income to pay rent or mortgage.

The data from the first three months of the program are being analyzed as we write, but according to Liebman, “Preliminary results indicate that households receiving the Chelsea Eats Card are less likely to experience deteriorating financial situations and more likely to be able to afford all the food their household needs.” City Manager Ambrosino says that recipients are using the cash they receive from the Chelsea Eats program primarily for food and other essential needs: “Dignity, trust, and choice are all guiding principles of the program, which aims to help people support themselves and their families during the COVID-19 crisis.”

The results are encouraging: The data indicate that the Chelsea Eats program is already helping people. Programs that get cash directly to individuals are deeply needed for residents who do not qualify for federal support. It gives people something they need without taking anything from them.

Recommendations for Bringing Guaranteed Income to Scale

Based on our work with the City of Chelsea, the United Way, and other local partners, we believe that the moment is right for learning from local efforts and moving towards a broader vision of guaranteed income—one where a predictable payment of cash is made for a predictable amount of time. Below are a few specific ideas for how we could take immediate steps towards this vision:

• Philanthropy does not have the scale to fund guaranteed income programs that reach all families in need—only government can do that. But philanthropy can play an invaluable role in testing different delivery approaches and hopefully demonstrating effectiveness. While there are effective guaranteed income programs elsewhere in the world, these lessons are proving more tangible for state leaders in Massachusetts when they can see guaranteed income implemented right here in Chelsea. Until guaranteed income is brought to scale statewide, philanthropy should consider doing more local pilots to continue supporting this case-making. More broadly, we believe that philanthropy does its best work when we listen to local leaders. Let local leaders go first and philanthropy can follow. That’s what we’ve tried to do in Chelsea, designing our program in response to their guidance; it’s how philanthropy should set up other demonstration projects like this in the future.
• State government should consider providing additional funding to continue the Chelsea Eats program for an additional year and add three or four other hard-hit municipalities elsewhere in the state to get a broader understanding of the mental, physical, and financial effects of giving residents predictable allocations of cash. The state has already received significant federal funding to help with COVID-19 recovery efforts, and more is on the way. Longer-term, we urge the state to initiate a broader test of direct cash transfer approaches, in which Massachusetts could maximize the amount of state resources going out through programs like the Earned Income Tax Credit. Other states are already experimenting with this—California, for instance, just passed a law providing $600 cash payments to undocumented immigrants who had been left out of the federal stimulus effort.
• The federal government should continue some of the invaluable cash-support expansions that happened during the pandemic—expanded unemployment insurance support, stimulus checks and the newly expanded Child Tax Credit—until the economic crisis subsides. After the economic crisis is over, the federal government should then consider permanent guaranteed income options so that no one in this country ever struggles to make ends meet. Philanthropy and local government can do much more to help alleviate suffering, but ultimately the federal government has by far the most leverage to make change at meaningful scale. As a country we have the resources at our disposal to end poverty as we know it. We simply have not yet made this work a top priority.