ST. LOUIS — A billionaire philanthropist is backing a pilot program to help fight poverty in his hometown.
Jack Dorsey, the co-founder of Twitter and current CEO of Square, gave $1 million to help kickstart the city of St. Louis' Guaranteed Basic Income Pilot Program. Forbes estimated Dorsey's net worth at $3.1 billion earlier this month.
The city launched a website on Tuesday where parents of school-age children can sign up to receive notifications about the $500 monthly cash payment. The official registration window opens on Monday, Oct. 23. The program is scheduled to last for 18 months before its expiration in May of 2025, the month after the next mayoral election.
Mayor Tishaura Jones and the St. Louis Board of Aldermen used a portion of federal pandemic relief funds to authorize the program. Initially, it was estimated to benefit 440 families who live in the city. Dorsey's investment is expected to expand the program to reach 540 families in total.
The program, which is catching on in cities across the country, was modeled after an initial round of direct cash assistance during the pandemic.
Mayor Jones said the city monitored the financial data and found that "families overwhelmingly spent these funds on essentials like groceries and transportation."
City Treasurer Adam Layne's office will administer the program. It has contracted with MoCaFi, a third-party vendor, to issue bank cards to the families who are selected for the monthly payment.
"This will be a PIN-protected debit card with $500 on it, and that will be reloaded every single month," he said. "It'll automatically go on to that card so that they can spend the money as they need to."
Layne said that while people can use the card to make cash withdrawals and spend the money anywhere they like, including at a casino, he's confident parents with kids in school will use the funds on more necessary items that could improve their quality of life.
"The amount that they can spend on their children actually goes up," he said. "Their access to healthy food and produce is something that goes up as well. Their ability to spend more money on child care. Maybe they're working two jobs and now because of being able to reduce their debt, they're able to only work one job."
Layne suggested the extra breathing room in family budgets could help to reduce the city's flow of outmigration.
"We have so many issues in our city and we know that money doesn't solve every problem," he said, "but being able to get people to the next step does make our region a better place.
"When we have a region like St Louis where there are folks who are leaving every day; or don't feel like the region is investing in them; or they can move forward economically in this region; to be able to put something like this in place, regardless of who does it, I think is a benefit."