Emergency Financial Assistance & COVID-19


Catholic Charities Galveston-Houston, Texas

Focus Area

  • Self-Sufficiency


Catholic Charities Galveston-Houston

“The pandemic has impacted communities across the United States, and many nonprofits are providing direct financial assistance to families to mitigate its harmful economic impact. This research will allow practitioners and policymakers to better understand the best ways to connect impacted individuals and families with the assistance they need.”

Shannon Strother, VP of Programs, Catholic Charities Galveston-Houston

The Issue

For a person already having trouble making ends meet, a negative shock to their finances—such as a reduction in work hours or a bill from a trip to the emergency room—can send them into a downward spiral. Utility shut off. Bad credit. Repossessed car. The domino effect of material hardship can seem to have no end. Eviction because of missed rent payments exemplifies the gravity of these income shocks for low-income families, and is the leading cause of family homelessness and housing instability.

The COVID-19 pandemic has brought about unprecedented economic challenges for communities across the nation, with very personal implications. Consider unemployment, which swelled to new heights during the pandemic. Over 20 million people lost their jobs. And although labor conditions have begun to rebound, recovery is still sluggish—less than half of lost jobs were regained as of August 2020. The economic impact of the pandemic on workers and businesses alike is undoubtedly widespread and severe.

These economic conditions have made life even tougher for low-income families. Job loss means income loss, drained bank accounts, missed payments, and burdensome debt like car title loans. This kind of financial distress makes the need for ready cash to meet basic needs particularly clear. The well-being of countless families is at risk without financial support to help them weather the pandemic’s economic fallout.

Many social service agencies offer emergency financial assistance (EFA) for families dealing with such financial crises. And research shows that this type of quick aid helps families stay afloat. EFA makes it less likely that individuals become homeless and can even reduce criminal involvement.  

But even though EFA is a common service offering for social service organizations, little research has been done to shed light on the best way to deliver funds to clients. Traditionally, service organizations have made payments on a client’s behalf, but this isn’t without an administrative burden, as the service organization needs to obtain tax documents and other paperwork from the landlord or utility company in order to make a payment. And funders of EFA programs frequently disallow payment made in any other way but directly to a vendor. But is this the best way? Is it more effective to give funds directly to the client, or to make a payment on the client’s behalf to the landlord or utility company?

Beyond questions about the efficiency of EFA delivery lie concerns about dignity. Imagine having to tell a stranger that you can’t pay your bills. Imagine your landlord knowing that a charity is helping tide you over. Asking for financial help often comes with feelings of shame, helplessness, and disempowerment. Will EFA payments made directly to the requesting family help minimize this distress and preserve dignity and autonomy?

There is no doubt that EFA payments can have a big impact on a client’s financial stability and well-being. Now, and especially as millions of families have been thrown into precarious financial situations due to the pandemic, we need to understand how to best deliver these payments—for efficient use of funds, making aid available to more people, and supporting client dignity. 

The Intervention

Catholic Charities of the Archdiocese of Galveston-Houston (CCGH) is one of the many social service organizations providing EFA to help low-income families address immediate, critical financial crises. In CCGH’s program, the agency provides up to $1,200 in emergency funds to individuals who need it to stay current on rent or utility payments.

Typically, CCGH distributes these funds on behalf of individuals to an appropriate third party. For example, in the case of a rent payment, CCGH transfers funds directly to the client’s landlord. Facing an increased demand for EFA due to the COVID-19 pandemic, CCGH is interested in the impact of changing this method of delivery and instead providing EFA payments directly to clients.

Research Question

How does the delivery method of emergency financial assistance influence a client’s housing, crime, and financial outcomes?

Intended Outcomes

  • Researchers will learn how the delivery method for EFA affects spending, housing stability, probability of arrest, and credit scores for recipients.
  • This study will also consider the cost-effectiveness of each delivery method. If evidence shows that delivering EFA directly to clients has the same influence on outcomes as paying a third party, CCGH could confidently deliver EFA directly to more clients and avoid higher administrative burdens.
  • CCGH is also interested in learning if direct payments to clients help support CCGH’s vision to help people live with dignity.

Research Study Design

The evaluation of CCGH’s EFA program is a randomized controlled trial. To be eligible for EFA, clients must be single-headed households with children, families with five or more children, immigrants/refugees, seniors, individuals with disabilities, or households impacted by COVID-19. Clients apply for EFA through CCGH’s website, where they are screened for eligibility and to assess need.

Due to limited funds, CCGH cannot provide EFA to all clients who request it. To allocate resources fairly and run a rigorous impact evaluation, eligible applicants are entered into a lottery. Clients who are randomly selected to receive EFA via payments made on their behalf to a third party become part of the first treatment group. Clients who are randomly selected to receive direct EFA payments become part of the second treatment group. A third group of randomly selected clients does not receive EFA payments at all and becomes the control group.

At the conclusion of the study, LEO researchers will compare the outcomes of clients across all three groups. In this way, LEO can isolate the effect of each EFA delivery method on the outcomes of interest.

(Photo credit: Catholic Charities Galveston-Houston)

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