Radical Idea? The New Funding Around a Basic Income

There's something very wrong with how our society deals with those it leaves behind. For all its benefits, modern welfare tends to be restrictive, humiliating, bureaucratic, and just not enough. Meanwhile, the ranks of those left behind by today's economy keep expanding, as more workers are sidelined by large-scale structural forces like globalization and technological change. The latter force is likely to gain steam in coming years as artificial intelligence advances, allowing whole new categories of jobs to be automated. Today's economic inequality may be nothing compared to what lies ahead in a world with far less work. 

That’s where a “radical” idea comes in. The concept of universal basic income (UBI) imagines a society in which every citizen gets a check to survive, and can spend that money freely while working to earn more. Needless to say, UBI has its opponents. The main worry is that people will stop working, slowing growth and creating social dysfunction. Another concern is that recipients will squander their payments.

But while the UBI concept triggers a lot of gut reactions, it hasn’t really been studied properly, aside from a few small pilot projects. (Finland just started an experimental trial.) One exciting effort to pull back the veil on basic income is the Economic Security Project, a collaborative of more than a hundred activists, tech businesspeople, funders, academics, and others. 

The project recently announced a two-year research project to study how basic income might play out. Grants will total $10 million, with an initial round of grants (totaling over a half-million) going out to six nonprofits this year. 

The basic income concept isn’t virgin territory for philanthropy. But few funders have investigated it in a modern context. That's starting to change. As we've reported, tech funders like Facebook’s Chris Hughes, Dustin Moskovitz, and Google.org have supported GiveDirectly, a platform for direct charitable payments to impoverished people in Kenya. In fact, GiveDirectly has been the beneficiary of one of the largest grants yet made by Good Ventures, the philanthropic vehicle created by Moskovitz and his wife Cari Tuna.

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Today, GiveDirectly still looks like it’s going strong, and it’s just one of an array of players who’ve signed the Economic Security Project’s pledge to “think through how best to design cash programs that empower Americans to live and work in the new economy.”

It’s an eclectic group. Other notables include Roy Bahat of Bloomberg Beta, Felicia Wong of the Roosevelt Institute, Vinod Khosla of Khosla Ventures, Alicia Garza of Black Lives Matter, Y Combinator president Sam Altman, Zipcar co-founder Robin Chase, Institute for the Future fellow Natalie Foster, former U.S. labor secretary Robert B. Reich, and New America CEO Anne-Marie Slaughter. The project's donors and advisors also include Instagram co-founder Mike and Kaitlyn Krieger’s Future Justice Fund and the Goldhirsh Foundation. The Hopewell Fund acts as fiscal sponsor.

It's not surprising that some tech leaders are interested in a basic income. This industry has specialized in "disintermediation," cutting out the middlemen in many sectors  as a UBI would largely do with the welfare state. Of course, the tech industry is helping usher in the automation that is eliminating jobs, and you'd hope that some of its leaders would consider how to deal with the societal fallout. 

The Economic Security Project’s initial grantees are just as diverse as its backers. GiveDirectly is one of them, and it’ll study how lessons from its basic income work in Kenya could be applied in the U.S. Two regional grants introduce an environmental angle: one to the Chesapeake Climate Action Network to study how carbon pricing could be used to fund a basic income, and another to the Alaska Group American Center to fight cuts to the state’s Permanent Fund Dividend. Taking a cut from oil and gas revenue, among other sources, that deep-red state distributes unrestricted cash dividends to all its residents. 

The project’s other grantees include the Center for Popular Democracy and the Roosevelt Institute. Both these progressive groups will conduct research around basic income’s feasibility. Another grantee, the Niskanen Center, is a libertarian think tank. Charged with carrying out policy research on how cash dividends might be implemented, Niskanen’s presence here is something of a surprise. Why would libertarians support UBI?

Well, “support" is a strong word. In a recent publication on the think tank’s website, Niskanen posits basic income as a “kind of abstraction or construct that we can learn from and orient around even if it’s unlikely to ever become a concrete reality.” As an ideal model for a certain kind of welfare, UBI actually satisfies certain libertarian aims—simplicity and universality, in particular. Let's not forget that Milton Friedman was an early advocate of a guaranteed income, writing: 

We should replace the ragbag of specific welfare programs with a single comprehensive program of income supplements in cash — a negative income tax. It would provide an assured minimum to all persons in need, regardless of the reasons for their need… A negative income tax provides comprehensive reform which would do more efficiently and humanely what our present welfare system does so inefficiently and inhumanely.

So far, we haven't seen any libertarian or conservative funders backing the UBI, but it wouldn't be surprising if some stepped up, as well as centrist or eclectic funders. The Economic Security Project is taking a deep dive on a radical idea currently outside the Democratic and Republican mainstream. Given how many donors these days say that they want to bust dominant paradigms and disrupt the status quo, the UBI seems likely to draw more funding. That's especially true if exploratory research underway shows promising results.