Pay the Homeless

It’s time to end the pernicious myth that giving money directly to panhandlers won’t help them.

Bryce Covert | Longreads | June 2018 | 10 minutes (2,546 words)

He was standing on the median of a busy road one morning in the dead of a Massachusetts winter. With bare hands, he clutched a sign asking for money. I was a freshman in college driving to CVS, warm in my car.

I grew up in a rural beach community, where I hadn’t encountered many panhandlers. My experiences with people asking strangers for money came from a few family treks into New York City. Still, I had somehow absorbed a lesson—either spoken or implied, I can’t quite remember—about how to react: Don’t give any money when people ask for it. Doing so will only lead to bad things. The bad things weren’t specified, but drugs and alcohol were likely culprits, with the idea being that giving money to an addict hurts more than it helps. So when I passed that man asking for change, I wasn’t sure what to do.

At CVS, as I picked up tissues and toilet paper, I decided to also buy a couple items that I thought would be better to give him than my money: cheap gloves and a package of pretzel rods. He could use something to cover his hands, I figured, and surely something to eat. Pretzels seemed good to me.

On my drive back to campus, he was still on the median. I stopped, rolled down my window, and handed him the bounty I had bought for him, feeling pleased with myself. That is, until he responded. He was thankful for the gloves and my intentions, he told me, but he wouldn’t be able to eat the pretzels. His teeth, which hadn’t been tended to by a dentist for some time, couldn’t bite anything so hard. Pretzels were useless to him.

I apologized and drove off, having no time to turn around and go back for a softer food before the start of classes. I was mortified and heartbroken. From that brief interaction, I learned an entirely new lesson: I can never know what someone else is going through, nor exactly what he needs. And the fact that I thought I did—both that I assumed that he would use cash for something nefarious, and that I could accurately decide what was better for him—was not just condescending, it was utterly wrong.

That second lesson stuck. Today I live in New York City, where the poverty rate is 20 percent and more than 76,000 people are homeless. When someone asks me for cash, I don’t second-guess what he wants it for. I don’t assume I know what he needs. I give him my money if I have some. In truth, Sir Angus Deaton, a Nobel Prize winner in economics, wrote in The Great Escape (2013), “there are no experts on what poor family ‘needs’—except perhaps the poor family itself.”

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More than half a million people are homeless in the United States, and over 40 million people live in poverty. Across the country, on any given night, there are almost 200,000 people who have no indoor place to sleep. Almost a quarter of all homeless people live in New York City or Los Angeles, with a number of other major cities dealing with growing crises of their own. Many people living on the street rely in part on the kindness of strangers, asking for spare change. And thus many people of greater means are faced with a question: if someone asks for money, should we give it to them? Will it do more harm than good? Or should we give what we can without worry?

The overarching message from governments big and small is that panhandlers are scamming the public and shouldn’t be indulged. When the National Law Center on Homelessness & Poverty surveyed the policies of 187 cities across the country, it found that more than a quarter ban panhandling outright and nearly two-thirds prohibit it in certain places. Some city governments have even run ad campaigns discouraging people from giving money to those who ask for it.

Yet on the whole, all the evidence, from the statistical to the spiritual, points in one direction: if you can give, you should give. It won’t solve the problems of mass homelessness or impoverishment. But it will improve someone’s life ever so slightly and briefly. “People are in dire straits and raising money for bare necessities,” Jerry Jones, policy director at the Inner City Law Center, told me. They might be trying to collect enough to pay for a room for the night. They might need bus fare or gas to get to an appointment. Paul Boden, executive director of Western Regional Advocacy Project, an organization that supports the homeless, has panhandled in the past. “We live in a capitalist system and we live under a neoliberal government, so a human right to money or housing or health care or education—these don’t exist,” he said.

A 2013 survey found that most panhandlers in the neighborhoods surrounding San Francisco’s Union Square netted $25 or less a day, and 94 percent of them spent the money on food. In 2010, a more casual investigation by a reporter at The Toronto Star found that when he gave people $50 and $75 in MasterCard gift cards, most of the money was spent on restaurant meals or groceries, with a far smaller portion spent on liquor and cigarettes.

When you give money to poor people, Shapiro said, good things happen.

Much more research exists on giving cash to the poor in developing countries. Jeremy Shapiro examines the effects of giving money to people in need through his work as a co-founder of GiveDirectly and as a researcher with the Busara Center for Behavioral Economics. At GiveDirectly—a nonprofit that, as its name suggests, offers cash with no strings attached—he worked on a study in Kenya; between 2011 and 2013, the researchers determined, the program improved people’s food security, allowed them to buy other crucial goods (from soap to school supplies), and was beneficial to their psychological well being. Counter to my childhood lesson, recipients didn’t spend any more than they had in the past on so-called temptation goods like alcohol and tobacco. “The takeaway is surprisingly unsurprising—when you give money to poor people good things happen,” Shapiro said. “People eat more, they invest in businesses; you see people reporting being happier and less stressed out.”

David Evans, an economist with the World Bank, and Anna Popova, a researcher at Stanford University, dug into a number of studies on direct giving programs to examine whether spending on cigarettes or booze spiked. These included research in Burkina Faso, one of the world’s poorest nations in terms of GDP, and Brazil, which is relatively wealthy. Overwhelmingly, they found that giving cash “had no impact on spending on alcohol and tobacco,” Evans said. “In a number of cases, it even seemed to have a negative impact—people spent a lower proportion of their budget on these temptation goods.” Instead, people spent the money they received on food, education, their homes, and small business investments.

There are important caveats, these researchers noted, in terms of whether or not their findings can apply to panhandlers in America: For one thing, the selection is different. In most cash transfer experiments, recipients are chosen at random—“It’s like money coming from the sky,” Shapiro explained. Panhandlers, on the other hand, are a self-selecting group—they have asked for help and therefore may come with particular needs or challenges. The U.S. has a very different social safety net than, say, the one in Kenya. The money itself is distinctive, too, since with these charity programs it flows in a steady stream, allowing a recipient to plan spending; a panhandler may not have anywhere to stow savings, be it a bank account or a dresser.

But Evans thinks that his key findings on spending habits could apply in America. “Individuals and parents largely have the same values, they want good things for their families,” he said. A few small-scale studies have confirmed this assessment; in reviewing the existing research on a number of direct cash-transfer programs in the U.S. and Canada, Ioana Marinescu, an assistant professor of economics at the University of Pennsylvania, found that substance use and abuse decreased. Evans argued further that, even if some people do want to spend money on temptation goods, so what? “Do we get rid of an effective way of helping the poor just because there are a couple of people who don’t use the money in the way that we think is the most constructive?” he asked. Perhaps, he went on, a trip to the liquor store isn’t necessarily unhelpful. “If a poor person wants to buy a beer and that’s going to help them feel better at the end of the day, is that something we should criticize or be concerned about?”

After all, most other donations don’t get this kind of scrutiny. When I give clothes to the Salvation Army, I don’t worry about what the person who has them next will do while wearing them. “A big part of responding to any issue with compassion is to let go of whatever you’re donating, whether it’s a car, whether it’s a sweater, whether it’s a couple of dollars,” Boden said.

“To deny a few dollars to someone who’s in such desperate circumstances because you’re worried they might misspend it isn’t the right way to size up that moral dilemma,” Jones added. “It’s not our job to make decisions on behalf of other people who are living in such very different circumstances from ourselves.”

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Some have argued that people panhandle because it’s an easy way to get cash. The reality is that it’s difficult and often dangerous work, inviting animosity from passing strangers.

Suzanne (a pseudonym) panhandles now and then to support herself and her children when things get tight. “If I didn’t need it, I’m not going to ask,” she said. “It takes a lot for me to ask for help—period.” Sometimes it’s because she doesn’t have money to send her children on a field trip. Sometimes she needs to rent a hotel room so she can shower before a job interview, or she has out of money for gas. Back when she was trying to leave an abusive relationship, she panhandled to afford somewhere safe to stay for a night.

Suzanne endures a lot to secure small amounts of money. “It’s a very nerve-wracking or frightening experience because of all the rejection and judgment you get,” she told me. “You get so much backlash over nothing. It’s just some change. I’m not asking you to go in your pocket to write me a million-dollar check.” Her advice to anyone who wrestles with whether to give is to just do it. “At the end of the day, you never know what that person is going through,” she said. “No one wants to ask for money.”

Lisa Sawyer began panhandling about six years ago in front of a Nordstrom in downtown Seattle after she became homeless. A roommate in the house that she and her boyfriend had been living in knocked over a candle and burned the place down. Sawyer asked for spare change to survive, she told me. The money she made—about $20 or $30 on a good day—went to food, transportation, or finding a place to sleep. Because she never knew how much she’d be able to make in a day, there was no room to set a budget or make plans.

Instead of money, she found, most people issued judgments. “There’s a lot of comments,” she said. One woman told her, “White piece of trash, go get a job, you could do a lot better.” She could be in a better situation, she agreed. “But how could you get better if you’re homeless and no one will hire you?”

As a society, Jones said, we’re still abiding hundreds of thousands of people on any given night living out of doors.

Being given money is about more than just covering her necessities. “A lot of times when I’m panhandling, you’re more invisible,” Sawyer said. “When someone helps you out, you’re telling yourself you’re not invisible.”

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Giving a small amount of cash can hardly transform all the other conditions of someone’s economic situation such that they leap out of poverty, of course. But that isn’t the goal. “The real point is people are desperately poor in a country that is extremely wealthy, and they’re standing there on the street asking for spare change,” Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty, told me. “That’s the real problem. That’s what we should really be concerned about and agonizing over and spending our time trying to fix.”

The luxury of ignoring a panhandler’s request is an avoidance of their humanity—and, fundamentally, this is a reason that person is out on the street. “On a core level, this is why homelessness exists,” Jones said. “We’re able to detach ourselves from interacting with people who are living in these terrible circumstances.” A refusal to give can too easily be a refusal of reality: “As a society,” Jones continued, “we’re still abiding hundreds of thousands of people on any given night living out of doors.”

No amount of money given to a panhandler is going to solve the systemic problems—racism, a lack of affordable housing, low spending on anti-poverty programs—that cause someone to be homeless or simply run out of cash. Only a vast public effort could make a dent in alleviating the structures of poverty. But seeing panhandlers—and supporting them—is a start. “This is not the answer to the issues that bind us—those are deeper,” Boden explained. “This is just the visible manifestation of the fact that those issues exist.”

There are, of course, organizations that aim to combat those larger barriers to economic security—one always has an option to give money to a charity instead of an individual panhandler. But as the economists I spoke to pointed out, most people are not likely to take the dollar they would have otherwise given a panhandler and donate it to a nonprofit later. And while service organizations do a lot of good, what they do is generally something different than give money directly on the street, one American to another—a service that has its own merit. Just as the man I saw on the median needed something other than what I’d thought to give, there is value in the simple handoff of cash in a personal encounter.

And, as I learned, there are intangible—yet significant—benefits of giving people money instead of objects. “There are strong philosophical reasons to think cash transfers are good,” Shapiro said, rather than giving someone the equivalent in goods. It’s hard to quantify, but the act of handing over cash can provide someone with a sense of dignity. The recipient is being given the ability to choose what she needs, rather than having it dictated to her. She is acknowledged as an equal human being.

Dignity, in fact, can be the ultimate motivation for giving to someone on the street. “There’s value to the interaction that is part of this, and to recognizing that this is a fellow human being who is standing on the street asking for change,” Foscarinis said. “And acknowledging that person’s humanity also helps me acknowledge my own humanity.”

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Bryce Covert is an independent journalist writing about the economy and a contributing op-ed writer at The New York Times.

Editor: Betsy Morais

Fact-checker: Ethan Chiel