What Are Direct Cash Transfers?
Direct Cash Transfers (DCTs) are unconditional payments made to individuals experiencing poverty or homelessness, based on a simple, powerful principle: people are the experts of their own lives. Instead of tying financial support to strict eligibility or complex service compliance, Direct Cash Transfers provide immediate relief without conditions.
Research from UNICEF highlights that cash transfers significantly improve child and family well-being by reducing economic stress and enabling better access to food, housing, and education. Similarly, a World Bank toolkit emphasizes integrating financial literacy into cash transfer programs to enhance long-term outcomes. Meanwhile, a 2024 analysis from The/Nudge Institute confirms that direct financial support substantially increases income security, promotes autonomy, and offers young people a clear path toward independence.
By shifting from surveillance-based assistance toward trust-based support, DCT programs offer dignity and autonomy — particularly critical for youth and historically marginalized populations.
Why Direct Cash Transfers Work
Compelling evidence confirms that Direct Cash Transfers effectively reduce homelessness and enhance well-being, particularly when implemented thoughtfully.
A landmark Canadian study published in Proceedings of the National Academy of Sciences (2023) provided individuals experiencing homelessness in Vancouver with a one-time, unconditional $7,500 transfer. Participants experienced remarkable improvements, spending 99 fewer days homeless and 55 more days in stable housing over the year. They also retained more savings and increased spending on essentials such as food and rent—without increasing spending on alcohol or other substances. This program even saved society money, resulting in a net benefit of $777 per person by significantly reducing shelter usage.
Internationally, evidence aligns with these Canadian results. The CALP Network’s State of the World’s Cash report (2020) identifies unconditional cash transfers as among the most cost-effective social interventions globally, praised for flexibility and broad impacts—from household stability to resilience.
In the U.S., Chapin Hall’s study on youth homelessness similarly demonstrates promising outcomes. Early results indicate significantly improved housing stability, economic security, and youth empowerment, along with reduced shelter reliance and system involvement.
Rather than questioning if DCTs work, the question now is: how quickly can we scale these interventions to address urgent community needs?
Innovative Models in Action
Direct Cash Transfers are reshaping homelessness prevention in real-world scenarios:
- The New Leaf Project in Canada, launched by Foundations for Social Change, is the world’s first initiative to use unconditional lump-sum cash transfers for homelessness reduction. Participants quickly moved into stable housing, experienced significantly improved food security, and retained savings after 12 months. One participant described the transformative impact clearly:
“It helped me solve a lot of issues… Now I have a place, I can focus on getting to school, getting that career, focus on my son.” (Read full report).
- In the United States, Chapin Hall’s pilot in San Francisco empowers young people with monthly unrestricted financial support, informed by rigorous evaluation and a strong focus on youth autonomy.
To ensure successful implementation, Impact Charitable’s Best Practices guide provides practical insights. Key recommendations include flexible payment delivery, human-centred program design, and trust in recipients’ decision-making.
From Charity to Trust: Changing the Narrative
Direct Cash Transfers represent more than policy innovation—they reflect a profound shift toward social justice and equity. Traditional charity models often position service providers as gatekeepers and individuals in need as passive beneficiaries. DCTs, by contrast, start with trust and affirm that recipients are best positioned to make their own life decisions.
The Point Source Youth toolkit frames Direct Cash Transfers as reparative justice, recognizing how financial autonomy positively transforms outcomes for youth disproportionately affected by systemic inequities. The toolkit emphasizes that cash transfers are not simply a method of exiting homelessness but an intentional investment in youth liberation and racial equity.
Further reinforcing this idea, The/Nudge Institute argues that cash transfers empower individuals by restoring dignity and fostering agency, breaking away from paternalistic traditions that define many existing social support systems.
Similarly, UNICEF’s report promotes dignity-first approaches, showing that cash transfers support not only basic needs but also long-term developmental outcomes.
Direct Cash Transfers invite communities and policymakers to move beyond scarcity-based compliance toward solidarity, trust, and genuine empowerment.
Explore the Full Resource Collection
Explore our curated collection, Direct Cash Transfers as a Pathway Out of Homelessness, for toolkits, reports, case studies, videos, and podcasts. These resources highlight practical guidance, emerging research, and innovative strategies from Canada, the United States, and beyond—supporting you in exploring, evaluating, and expanding Direct Cash Transfers to effectively end homelessness.
👉 Browse the full collection here.