Catalyzing Economic Resilience Through Direct Cash Transfers

Low-income earners disproportionately suffered the brunt of economic fallout during the COVID-19 pandemic.

To help individuals living in Washington D.C.’s Ward 8 neighborhood, where one-third of residents have incomes below the federal poverty level, THRIVE East of the River (THRIVE) provided direct cash payments and grocery assistance to help stabilize 590 households east of the Anacostia River.

Between July 2020 and June 2021, THRIVE’s cash transfer program provided one of the largest short-term private emergency cash relief payments ever offered in the United States.

This emergency relief effort grew out of a partnership of four community-based organizations and was created to address the disproportionate economic impact of the COVID-19 pandemic on the organizations’ clients. The collaborating organizations were Bread for the City, the Far Southeast Family Strengthening Collaborative, Martha’s Table, and the 11th Street Bridge Park (a project of the Ward 8 nonprofit Building Bridges Across the River).

Capital One supported THRIVE through $200,000 in grant funding during that period to help stabilize families, foster mobility and accelerate recovery.

"We are proud of these Capital One partner organizations coming together in collective action to support members of our community who were the most impacted by the COVID-19 pandemic," says Sokol Shtylla, Mid-Atlantic Region Lead of Capital One's Community Impact and Investment team. "Beyond reaching the participating Ward 8 families, THRIVE also set a standard for designing and executing values-based programs that are explicitly grounded in human dignity and racial equity."

THRIVE provided a direct cash transfer of $5,500 to enrolled households. Unlike more traditional conditional cash transfers (CCTs) in which money is only transferred to individuals under specific circumstances, these payments were unconditional, meaning no strings were attached to how recipients could use them. Enrolled households also received weekly groceries, monthly dry goods and assistance securing additional resources, such as pandemic stimulus payments, unemployment insurance, financial literacy training, mental health support and workforce training.

The Urban Institute evaluated the impact of THRIVE’s program and concluded that its cash transfer policy created fast and flexible means of supporting residents through housing stability, food security and small business support.

How THRIVE participants used Cash Payments

Housing Stability: A majority of THRIVE participants reported spending a large amount of their cash payments on housing.

• The largest share of participants (54 percent) reported spending “all or almost all” or “a lot” on rent or mortgage payments.

Food Security: The second largest share of participants targeted their funds towards food, with 42 percent spending “all or almost all” or “a lot” on food.

• Before receiving cash payments, 34 percent of participants reported that they sometimes or often did not have enough to eat. That number dropped to 19 percent for individuals after they received payments.
• Rates of food insecurity among THRIVE participants were much lower than among other people with low incomes, both nationally and in the Washington, D.C.-area, after receiving the cash.
  • For example, 19 percent of THRIVE participants reported sometimes or often not having enough to eat compared with 30 percent of people with low incomes across the nation over the same time period.

Small Business Support: Participants also reported using funds on transportation, debt reduction and professional goals, including investments in small business.

• Around 10 percent of THRIVE participants reported being small business owners.
• More than 70 percent of those entrepreneurs stated that THRIVE’s cash payments helped them to invest in their businesses in ways that helped them to weather threats to their livelihood.

“There are often concerns about unconditional cash transfer programs around how people will use the money,” says Scott Kratz, Director of 11th Street Bridge Park, one of the organizations in THRIVE. “However, our participants spent the money on their greatest needs such as housing and food. We’ve seen that individuals and families with less means often make smart and thoughtful decisions about how to spend money because they’re watching every dollar.”

Findings from the Urban Institute suggest that the resilience of THRIVE participants can largely be attributed to the innovative approach of the partnership, which decided to place no requirements or limitations on THRIVE participants’ use of the cash payment.

Quantitative and qualitative data in the Urban Institute's findings demonstrate that participants often struck a thoughtful balance between addressing immediate survival concerns like paying rent and longer-term concerns like accumulation of debt.

“Capital One continues to provide pathways to upward economic mobility through grant funding, workforce development training and small business support,” Kratz said. “The company has brought all of its skill sets to bear to make sure that this community can continue not only to survive, but to thrive.”