A Privately Run Universal Basic Income
How can we best improve the material well-being of our poorest fellow citizens? There are several well-known challenges. In particular, it is not easy to accurately target assistance toward the truly needy. In addition, welfare programs often introduce harmful incentives to change behavior in order to maintain eligibility.
A Universal Basic Income (UBI), in contrast, does not have these problems, as payments are unconditional, that is, there are essentially no eligibility criteria. However, while several pilot programs have been tried, a taxpayer-funded UBI remains quite unpopular.
Perhaps, then, instead of hoping for the government to act, it would be better to create a UBI program through purely private initiative.
Let me describe how this might work.
A charitable organization is created that accepts donations and pays out monthly cash distributions. Essentially anyone can sign up to receive aid; the only criterion is being a non-incarcerated US citizen over the age of 18. To prevent fraud, recipients will need to have their identities securely verified.
Every month, a total distribution amount is calculated and split evenly between all people who signed up to be a recipient.
Crucially, recipients cannot remain anonymous: their profile, including all past payments received, will be publicly and permanently viewable. The main reason for this is to discourage people who don’t truly need assistance from applying. One can imagine, for instance, a smartphone app that allows people to search and browse recipients, for instance by scrolling over a map.
Recipients can become donors if their fortunes improve, thus effectively paying back some (or all) of the assistance received. This would also be recorded on their profile.
Donors will choose how quickly they want their donations to be paid out. For instance, they could request a one-time, all-at-once distribution. Alternatively, they could choose to spread it out over time, so that their donation is gradually disbursed during (say) a ten-year period. Spreading out payments will reduce the variability of payments, which is probably desirable, at least most of the time.
Possibly, donors can specify a maximum for the monthly cash payment per recipient. If, for some month, the average payment exceeds the maximum, then excess donations are simply retained and distributed at a later date.
All donations are invested in a federal government money market fund. This ensures minimal financial risk and does not throw debates or controversies about investment strategies into the mix.
A private UBI along these lines would be very simple to implement and potentially far more effective at helping the poor than other public or private assistance programs.
