Research

The project: Sometimes small barriers, solvable with relatively minor amounts of funding, present major obstacles for those living in poverty. For many Detroit residents, these barriers prevent them from making progress toward their goals of economic self-sufficiency.Through a partnership between the University of Michigan’s Ross School of Business and Focus: HOPE, a nonprofit civil and human rights organization based in Detroit, this project team introduced and evaluated a “Barrier Buster” pilot program that provided small financial awards to address these challenges. This new barrier buster approach intended to promote economic self-sufficiency among low-income Detroit residents, with the potential to inform future programming in the region and across the country.

The process: The research group designed and implemented a Barrier Buster fund, and a group of leaders from HOPE Village Neighborhood Network’s partner organizations developed procedures to recruit participants, select recipients of the funds. and disperse the awards. The Neighborhood Network group anonymously nominated community members who, they believed, would use the Barrier Buster funds to overcome a barrier and reach a specific goal related to self sufficiency. 

The study tracked outcomes for 11 nominees who received Barrier Buster awards ranging from $500 to $2,000 — with an average amount of $863 — and a comparison group of four nominees who did not receive Barrier Buster awards. The study included pre- and post-program interviews, as well as follow-up interviews with a sub-sample of participants.

Results: The study found credit scores improved more for people who received a Barrier Buster award than those in the comparison group. Total self-sufficiency (a combination of scores on 11 domains of self-sufficiency) increased for both groups, but more for participants who received a Barrier Buster award. 

The study also found most individuals who received Barrier Buster awards used them for the purposes they described when they requested the funds. Those who did not use the funds as initially intended instead spent the money on other needs that arose, which typically still contributed to the same end goal. 

“These findings are contrary to criticisms rooted in negative stereotypes that contend that low-income people will use unrestricted funds for recreational purposes,” states a working paper on the Barrier Busters study. “Moreover, these findings suggest a major benefit of unrestricted cash transfers, in that they allow recipients to address immediate needs that may arise and interfere with progress toward their primary goals.”  

More information: Barrier Busters: Unconditional Cash Transfers as a Strategy to Promote Economic Self-Sufficiency

Michael Gordon, U-M Ross School of Business
Stephanie Moore, Center for Education Design, Evaluation & Research (CEDER) and U-M School of Education
Julie Gowda, Focus: HOPE
Debbie Fisher, Focus: HOPE