COVID-19 "Boost" Emergency Financial Assistance

Location

Catholic Charities Chicago, Illinois

Focus Areas

  • Housing
  • Self-Sufficiency

Partners

Catholic Charities Chicago

“Emergency financial assistance call centers have been overwhelmed with calls stemming from the COVID-19 pandemic. And anyone who’s been involved with a social service agency knows there are never enough resources to help everyone. While local organizations are quickly and courageously stepping up for their communities during a time of great need, the realities of social service funding means many families are turned away.”

The Issue

The 2020 COVID-19 pandemic and the resulting work restrictions led to an unprecedented shutdown in large segments of the U.S. economy, especially businesses with face-to-face transactions such as travel, retail, entertainment, some construction, and the gig economy. Jobless claims to state unemployment systems reached historic levels as a result.

New jobless claims hovered around 210,000 per week in the years leading up to 2020. But beginning with the initial lockdowns in March, new claims spiked to the millions. The number remained persistently high, with more than 700,000 workers filing unemployment claims each week in October 2020. The state of Illinois led the country in new jobless claims at the end of that month. Tens of millions of families across the country were impacted by lost jobs and income as the U.S. attempted to curb the spread of the coronavirus.

A number of these families filed for unemployment insurance (UI)—a federal social insurance program that helps families smooth consumption over time when they lose a job. This, however, is not a solution for all families. Not all workers are part of the UI system. The self-employed, contract workers, and workers in the gig economy may find themselves without any ability to make ends meet as their livelihood dries up. Single mothers that receive monthly checks from the father of their children may see those child support payments shrink. Some businesses—rather than laying off employees as they shut down—reported “zero hours worked” for personnel, making the workers ineligible for UI benefits but shielding the business from increases in UI premiums in the future. However it happened, lost income led to drained savings and delinquency on rent, utilities, and other payments for many families.

Thankfully, social service agencies and local governments stepped in to help families when the patchwork of employment, UI benefits, and temporary COVID-19 stimulus legislation came to an end. Most cities have long had emergency hotlines that families can call for emergency financial assistance in a time of crisis. These lines direct callers to local agencies that distribute funds for rent, utilities, and unpaid medical debt on an as-needed basis. These call centers have been overwhelmed with calls stemming from the COVID-19 pandemic. And anyone who’s been involved with a social service agency knows there are never enough resources to help everyone. While local organizations are quickly and courageously stepping up for their communities during a time of great need, the realities of social service funding means many families are turned away.

These emergency financial assistance (EFA) programs are found in almost every U.S. community, and a groundbreaking study conducted by LEO and Catholic Charities Chicago shows that EFA is effective at preventing homelessness. Now, we need to understand more details. For whom is EFA most effective? What amount seems to make the biggest difference? Does delivery method matter? The economic fallout of the COVID-19 pandemic creates a unique opportunity to start answering these questions. If we understand how to most efficiently get the right amount of EFA to the people who can most benefit from it, we’ll be able to stabilize families who have seen their dreams for the future so terribly disrupted, and protect our communities against future shocks.

The Intervention

Catholic Charities Chicago operates the city’s housing emergency financial assistance hotline. Families at risk of homelessness can call the Homelessness Prevention Call Center (HPCC) and be connected with area agencies for help making rent or utility payments. The idea is to provide a modest injection of funds to help families weather an unexpected crisis, stay in their homes, and set their feet back on a path towards financial stability.

A previous LEO study of the HPCC showed that temporary financial assistance reduced entry into a homeless shelter by 76% at six months, and the effect persisted a year after contacting the HPCC. These results reaffirmed Catholic Charities Chicago’s commitment to homelessness prevention services and have helped garner support for the HPCC specifically, and for evidence-based social programs more broadly.

The evidence from that project also impacted Catholic Charities Chicago’s allocation of special COVID relief funds. In an effort to further understand what level of financial assistance is most effective for keeping families stable, Catholic Charities Chicago began offering a “boost” EFA payment of $2,500 to eligible families impacted by COVID-19, in addition to the base assistance they received through the Homelessness Prevention Call Center.  

Research Question

How does receiving extra emergency financial assistance funds impact a family’s housing stability, credit history, and overall well-being?

Intended Outcomes

  • Households that receive a “boost” EFA payment will have improved housing stability, credit history, and overall well-being than households that only receive a base-level of assistance from the Homelessness Prevention Call Center.

Research Study Design

The “boost” emergency financial assistance project is a randomized controlled trial to measure the benefits of varying levels of EFA.

Families who call the Homelessness Prevention Call Center are eligible to receive boost funding if they meet the standard eligibility requirements for HPCC assistance and are unable to make their rent or utility payment due to a documented crisis. 

Because there are not enough funds to give to every COVID-impacted family who contacts the HPCC, callers who are eligible for boost funding are offered base-level financial assistance from the HPCC and are invited to participate in a lottery to access an additional $2,500. Callers who are randomly assigned to the control group only receive the typical base-level HPCC assistance. Callers who are randomly assigned to the treatment group receive this base-level assistance, plus a one-time “boost” payment of $2,500 that can be used for ongoing rent, mortgage, security deposit, and utilities payments, or for transportation and childcare costs.

At the conclusion of the study, LEO researchers will compare the outcomes of both groups to see which families benefited the most from which amount of funding. The evidence we build will be useful for policymakers and service providers to quickly respond to stabilize families in future economic crises, and to understand how to most fairly distribute limited resources.

(Photo credit: Catholic Charities Chicago - Homelessness Prevention Call Center)

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