NAPLES, Florida — The Swiss nonprofit Social Income asks, “What would change if you gave away 1% of your income every month? Not much, right?” It is based on these questions and a strong belief in universal basic income (UBI) that Sandino Scheidegger founded the organization, which works toward alleviating global poverty through direct cash transfers to the impoverished citizens of Sierra Leone. Social Income is taking advantage of the burgeoning use of mobile banking platforms in Africa and is alleviating poverty by facilitating “human to human” assistance.
A Short and Promising History
Social Income’s premise is simple: connect people who have the means to help and people who need the help. The organization started by aiding a group of financially struggling artists in Sierra Leone, a country where the average monthly income is $45. The young artists have since become Social Income’s local advocates in Freetown, Sierra Leone.
Scheidegger registered Social Income in December 2019. In March 2020, the organization began sending its first cash transfers. Launched during the COVID-19 pandemic, Social Income was pushed to begin transfers before all plans were in order and before the completion of its website.
Since its nascence, Social Income’s team has developed its own unique version of UBI. Because it is a nonprofit, bureaucracy, a budget or politics do not influence its methods. Instead, Social Income relies on modest monthly donations that create a significant impact.
All Social Income employees are volunteers. Therefore, 100% of the money from donors goes to recipients who local advocates select. “We are doing it for free,” Head of Communications Riccardo Tamburini told The Borgen Project in an interview. “We think it’s a very good thing that people know that all their money is spent on the people that need it.” Prospective contributors can type their monthly salary into a calculator on the Social Income website. The calculator then informs them how much of an impact donating 1% of their monthly salary could have on a person’s life in Sierra Leone.
Mobile banking allows for fluid money transactions. Being virtual, the COVID-19 pandemic does not greatly impact the system. Additionally, it does not matter what kind of phone recipients use to manage their banking accounts — they can even use rudimentary flip phones, which usually cost less than $10. A contributor earning $3,000 per month, for example, would donate $30 through a credit card or bank transfer. Social Income sets the amount of money that those in need receive at $30 per month with a three-year guarantee. The donation then transfers directly to one person’s mobile phone. Contributors can choose to donate monthly, quarterly or yearly and may cancel or adjust their payment plan as they please.
Universal Basic Income and Poverty Alleviation
Explaining how the organization’s team came together, Tamburini says, “Basically for all of us it started from the desire to do something. We were all aware of the situation of inequality that surrounded us and we wanted to find a solution.” The organization believes that UBI is the most effective solution.
The concept of UBI in the context of poverty alleviation has been discussed at length by governments and organizations alike. It is defined as a government program that allocates a set amount of money to adult citizens on a regular basis. The government can grant UBI regardless of need and regardless of whether one chooses to continue working.
A steady source of income could allow for people living in extreme poverty to worry less about food and shelter and more about receiving an education or finding employment to build on their assets. Critics of UBI argue that a continuous stream of money could result in people’s loss of incentive to work and raises concerns that people would use the funds irresponsibly. However, a study conducted by professors at MIT and Harvard University using seven randomized controlled trials in six developing countries found that there is “no systematic evidence that cash transfer programs discourage work.”
How Recipients Use Their Social Income
Social Income does not track how recipients use their money. “We believe that they are really free to use [it]as they like and they know how to use it better than we do,” Tamburini says. Some recipients, though, share their stories in gratitude. Tamburini relays that a physically disabled man was able to buy new crutches for himself.
Another recipient, a single woman with three children, was about to be evicted from her home. The money from Social Income allowed her to pay rent. The Social Income team is establishing a way to empirically measure its impact. The organization is in the process of surveying recipients about their emotional and physical well-being as well as whether their situations have improved through the assistance.
Plans for the Future
Being in existence for less than two years, Social Income is working to scale up its methods. The organization aims to develop a savings plan for recipients by 2022 to enable beneficiaries to withdraw money over time. Social Income’s volunteers also hope that people, governments and organizations genuinely reflect on their power to act.
“A goal for us is that people can understand that it’s not that difficult to do something to fight inequality. Sometimes it just really [takes]two clicks on your laptop and you can already do something,” Tamburini expressed. Social Income strives for a truly universal reach, ultimately growing not only to help people in Sierra Leone but to contribute to poverty reduction on a global scale.
– Safira Schiowitz