Introduction

Cash assistance is a crucial lifeline in an emergency, helping families stay in their homes, put food on the table, and pay their bills. Beyond providing immediate help, when local organizations provide cash assistance to the individuals and families who need it, they show that investment in people is the fundamental building block toward the resilience, recovery, and future of our cities.

In the wake of the COVID-19 pandemic, over 40 million people have filed for unemployment and, as of this writing, the unemployment rate is almost 15 percent. Prior to the economic fallout from the pandemic, 40 percent of Americans were unable to weather a $400 unexpected expense, according to a study from the Federal Reserve. While the federal government authorized a one-time $1,200 cash stimulus for Americans earning less than seventy five thousand dollars a year, many individuals and families in need were excluded.

Across the country, existing benefits systems are failing. America’s patchwork unemployment system, which leaves out gig workers and tipped workers, has struggled to respond to the massive need and state unemployment insurance (UI) websites are unable to handle the increase in volume. Food assistance is not reaching all of the families that need it, and stimulus checks are taking too long to reach even those who qualify for federal relief. Many immigrants won’t qualify for government relief programs and U.S. citizens that have family members of mixed immigration status are being denied federal relief they should be eligible for. Families that have been excluded from federal and state benefits have even less options, with groups that we spoke to citing the need for resources to stay in their homes, keep the lights on, and keep food on the table. Families need cash now, and a variety of city, state, and community-based organizations are stepping up to raise and distribute money quickly in an attempt to prevent the current humanitarian crisis from spiraling further.

While cash assistance programs are getting millions of dollars to those who need it, the people who are running them face competing interests and are forced to make tradeoffs. When you run a cash assistance program, you’ll be faced with hard decisions. For example, how do you act responsibly while…

Moving quickly?

In a social distancing world where economic hardship is great, organizations and governments must decide between moving quickly, maximizing the privacy and security of applicants and their data, and putting measures in place to minimize fraud. Even in a pre-COVID-19 world, accomplishing all three at 100 percent was nearly impossible, as thorough vetting would brush up against the ability to move quickly as well as the ability to keep personal information private. In our current state, organizations must prioritize some aspects over others.

Managing funds?

Organizations administering cash assistance programs raised questions about the implications of mixing public and private funds, recordkeeping, whether this cash assistance would have tax or financial requirements for the recipient or the gifting organization, and whether the receipt of cash assistance would make a recipient ineligible for other benefits. Many groups have pointed to IRS Publication 3833 as a resource for guiding their decision making.

Serving immigrant communities?

Organizations we spoke with expressed confusion around public charge and providing cash assistance to immigrants. In response to these concerns, we point to these FAQs prepared by the National Immigration Law Center (NILC) and other resources below.

*Note that if you are involved in running a cash assistance program and you have lessons of your own to share, believe that we left something out, or believe that we got something wrong, please let us know. We’ll be collecting feedback through the end of July. Thank you!