The Financial Gift That Keeps on Giving

When Mariana's father lost his job in 2018 as a result of a back injury, he struggled to pay bills and borrowed against his 401k to cover their monthly mortgage payments. “He would always have really past due bills for things like the water, the electricity or the gas. So, there were a couple times where they were shut off on us,” Mariana recalled. 

When Mariana's cash transfer payments started in 2020, she was employed full time at an insurance company, but her father was unemployed and they were struggling. Ultimately, she took it upon herself to pay the outstanding bills.  

She also started to pay for her family’s weekly groceries and her father’s car insurance policy. She could afford to pay everyday expenses with her income, but if anything unexpected came up, she resorted to using her credit card. She said the cash transfer payments were useful; with the extra money she was able to cover monthly expenses and not feel like she had to “count her pennies.”

Many of the participants we spoke to shared similar stories of using cash transfer payments to provide financial support to family or friends in need, either in the form of gifts or loans. Quantitatively, we find that recipients significantly increased their spending on financial support to others by an average of $22 per month—a 25% increase relative to the average control participant. Exploratory subgroup analyses show this effect was greatest for recipients who were in lower income households at enrollment. Among qualitative participants, we find the increased support to others was especially salient among participants of color who provided financial assistance to family and friends either temporarily or on a regular basis, like Maureen.

One recipient, Genevieve, gifted her brother and cousins money here and there when they were incarcerated. Another recipient, Garland, sent remittances  of $50-$65 a month to his homeless friend in Tunisia until his friend found a place to live. Even though he didn’t have much money to spare, Garland felt that helping out his friend was something he could do.

Helping others can come at a cost 

Recipients often shared that if they could help someone else out, they would. They also talked about the unexpected consequences of providing help to others.

When her brother passed away in 2020, Sasha’s family was not financially prepared to cover the costs of his funeral, cremation and burial; the average cost of which can run anywhere from $7,000-$12,000. To cover the expense, Sasha and her sister split the costs between them. On top of mourning her brother’s untimely death, Sasha also struggled to pay her bills. 

“Getting everything set up for my brother's funeral, that’s kinda taken a toll as far as finances. It's expensive and it does affect daily expenses,” Sasha said. 

In addition to causing financial strain, some participants felt resentful that they had to put their lives and dreams on hold to help family and friends. When asked about how she feels as a primary provider, Mariana, mentioned above, said, “What's been on my mind lately is trying to see when I'll be able to move on with my own life instead of helping my dad.” 

Sasha, who helped to pay for her brother’s funeral expenses, mentioned needing to put her home-buying goals on standby during the time she spent paying for her brother’s funeral bills. She said, “Eventually, everything will be paid off for my brother's funeral and we'll kind of get past this bump and then really get to start saving even more. Hopefully at that point then I will be able to get my own place.” 

Although some participants were able to get help from family members when they needed it, many participants who lacked resources expressed being part of a precarious social circle made up of families and individuals who were struggling financially and emotionally. One participant, Nicholas, said that when he needed financial help he never reached out to his family or friends because they normally had their own issues and weren’t able to help. In turn, participants felt like family and friends expected them to provide financial help and resources, especially if they knew about the cash transfers. To avoid this, some recipients decided not to tell anyone that they were receiving the cash transfer money.

Returning the favor

Despite sometimes feeling overwhelmed by the financial support they provided to others, many participants felt a sense of joy and pride at being able to offer financial help to others, often for the first time in their lives. Alexis, for example, helped her brother who was struggling financially.

"My brother struggles to pay his mortgage. I think last month or two months ago, I did help him pay one of those months' mortgage." She said, “He is always asking my mom. So, it was nice that I had some money...I was like, ‘Let me give my mom a break, to help him out.'"

Before helping her brother, Alexis recalls all of the financial help that she had received from her family, especially her father. For Alexis and others like her, the cash made it possible for recipients to be the type of support for others that they themselves had sometimes benefited from. Because of the cash, Alexis was able to pay that forward for her brother. 

Disclaimer: These stories and participant experiences are not meant to be representative of all qualitative participants. Instead, they are in-depth snapshots of the lived reality of cash transfer recipients across different areas of their lives and at distinct periods during the program.

Methodological Statement: The data for this piece comes from five rounds of in-depth, semi-structured qualitative interviews with 156 participants. Interview summaries, field notes, thematic memos and extensive case memos reflecting data from all five rounds were coded using an iterative and open coding method. The initial findings reflected in these pieces were identified during this first round of open coding.