Start writing a post

We should follow the science on poverty and give cash grants to those in need

Cash, not physical goods, can give those in need dignity and personal responsibility - and allow them to change their lives.

We should follow the science on poverty and give cash grants to those in need
people standing in front of brown cardboard boxes
Photo by Joel Muniz on Unsplash
https://twitter.com/NZF_org_uk
Iqbal Nasim MBE is CEO of the National Zakat Foundation
https://www.facebook.com/NZF.org.uk/

The recent scandal involving UK government food parcels to disadvantaged families where a £30 'hamper' looked so bare as to be described as 'woefully inadequate' by many - has raised a deeper question about how both governments and charities can best deliver welfare and support.


In my experience at the National Zakat Foundation, cash grants - rather than physical goods - are more efficient and effective, affording recipients a sense of personal responsibility and dignity, enabling them to improve their lives on their own terms.

Decision-makers sense something isn't working. Boris Johnson has ordered an inquiry into the food parcels and devoted another £170m to the winter grant scheme, £220m for holiday activities and food programmes, along with a rollout of a national voucher scheme. While these schemes are commendable, why not just give families in need cash directly?

Efficiency alone is reason enough. The government entrusted a third-party provider, Clerkwells, with putting together the hamper to meet the varying dietary needs of millions of different families. As well as inserting an unnecessary 'middle man', this one-size-fits-all approach often fits no one.

READ: How the 0.7% law is affecting residents in the UK during the pandemic

How the 0.7% law is affecting residents in the UK during the pandemic conversations.indy100.com


The 0.7% law states a proud, rich country like the U.K. can afford to give just 7 pence of every £10 to help people living on less than £1 a day. It also means when we have less money, the aid budget automatically goes down

Many in the charity sector, where we are often expected to achieve the most with finite resources, know there is a better way. For example, Save the Children says, "cash transfers are one of the more cost-effective ways of delivering aid. They support the local economy and, unlike food parcels, you don't need to build an entirely new production line from scratch." Centrally organised food parcels are seldom adequate for any family, do nothing for the local economy, and are a significant drain on public resources.

In devolved governments, things have already shifted with most of Scotland and Wales using cash injection schemes.

The UK government should follow suit, particularly since they have no problem allowing the millions of furloughed people to choose what they should spend their money on.

The furlough scheme is cold hard cash, not an 'unemployment package' consisting of food, colouring books, and a Netflix subscription. It seems implicit in the policy that the government believes that once someone slips below the poverty line, they can no longer be trusted to spend money responsibly.

Margaret Thatcher famously said that "poverty is a character defect," i.e., that if low-income families were financially responsible, they wouldn't be low-income families in the first place.

Although some low-income families may have issues with alcohol or drug dependency, that is not representative. In any case, it has complex causes, including low self-esteem - something not helped by being robbed of your ability to choose what to have for dinner. Unfortunately, some charities, as well as governments, seem to be falling for this gross caricature.

In 2014, the Chinese billionaire Chen Guangbiao arranged a lunch for the homeless people of New York. He intended to give each of the participants $300 to spend as they wished. The organisation involved, Rescue Mission, stepped in and accepted the total figure of $90,000 on their behalf, expressing their fears the money would be spent on drugs and alcohol.

This strategy - and the concerns behind it - isn't backed up by the data. The World Bank conducted a meta-analysis on cash injection schemes for homeless people in 19 different countries and found that the purchase of nicotine and alcohol increased in only two cases, and even then, the evidence was mixed.

Countless examples of evidence from around the world show that cash injections are a more effective way of relieving hunger and stimulating local economies, which has a cyclically-virtuous impact on the whole community. Just as we 'follow the science' regarding the pandemic, we should follow the evidence regarding poverty.

Aside from efficiencies, which are much-loved by governments of all stripes, cash support has an important psychological dimension.

Giving people dignity and autonomy allows them to make better decisions. Going from handout to handout, rather than managing a household budget, changes the way our brains function and entrench poverty.

When the brain perceives scarcity (e.g., there is a hamper and all the food our family has), it makes poor decisions. Princeton psychologist Eldar Shafir has documented many examples of the 'scarcity mindset' in his book "Scarcity: Why Having Too Little Means So Much."

Shafir explains how the perception of scarcity consumes 'mental bandwidth', which uses energy that would otherwise go to longer-term problem solving or planning. The compound benefit of a little extra financial cushion would allow low-income families to plan and work towards a better future.

We need to accept that, in general, individuals know what they need better than governments do. We seem delighted to fund direct cash transfers to alleviate food poverty abroad. Isn't it time we tried that at home?

Iqbal Nasim MBE is the CEO of National Zakat Foundation.

Why the history of Juneteenth is important—and how it will be recognized by many this year

This year marks an exciting time in our history— Congress passed the Juneteenth Independence Day Act.

people standing on road during daytime
Photo by Leslie Cross on Unsplash
World Animal Protection has moved the world to protect animals for more than 50 years. World Animal Protection works to give animals a better life. The organization's activities include working with companies to ensure high standards of welfare for the animals in their care; working with governments and other stakeholders to prevent wild animals being cruelly traded, trapped or killed; and saving the lives of animals and the livelihoods of the people who depend on them in disaster situations. World Animal Protection influences decision-makers to put animal welfare on the global agenda and inspires people to change animals' lives for the better. More information on World Animal Protection can be found at: http://www.worldanimalprotection.us/
https://twitter.com/MoveTheWorldUS
https://www.facebook.com/WorldAnimalProtectionUS
https://www.linkedin.com/company/world-animal-protection-us/
https://www.instagram.com/worldanimalprotectionus/

Tova Randolph, World Animal Protection

In America, Independence Day is celebrated as a national holiday on July 4. The first Independence Day was officially organized in Philadelphia, PA on July 4, 1777.

Keep reading... Show less

Stop the Misogyny. Melinda Gates deserves every cent

Marriage is an equal partnership - but women's invisible labor is devalued, especially when it comes to divorce

Kiran Rai founded celebrity-endorsed fashion line Sir Alistair Rai. As co-founder of Consciously Unbiased and the CU Project, Rai works to help change the narrative in our culture and empower people.

Bill and Melinda Gates' separation will be the biggest divorce in history. It's shown us that no partnership is unbreakable. It's also reminded us that women such as Melinda Gates are often judged or stigmatized for receiving what they are entitled to - even when it comes to separating from a partner of decades, whose success is built on their support.

Keep reading... Show less
#StartTheConversation by joining us on
x

Join our new platform for free and your post can reach a huge audience on Indy100 and The Independent join