Denver Basic Income Project Started with Tesla [TSLA] Gains
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By Mark Patrick Donovan
The Denver Basic Income Project is the first major effort in the US to study the impact of providing guaranteed income to individuals who are unhoused, as a means of accelerating the path toward stability. I founded and seeded this initiative with $500,000 in Tesla gains. We have already raised an additional $3.3M on top of this to provide unconditional basic income to our unhoused neighbors in Denver, accompanied by a rigorous RCT (Randomized Control Trial) run by DU’s Center for Housing and Homelessness Research. We don’t have to wait for the government to come in and fix things, as Tesla has shown in the automotive industry. We just need to offer better solutions. Direct cash is increasingly seen as one of the most effective ways to fight poverty and economic inequality. We are hoping to take our program to 20 more cities in 2022 and 200 in 2023. We will need the help of the Tesla community and other high-net-worth individuals to make this happen. I have learned many things from Elon, and one of the most inspiring is that huge, unimaginable positive change is possible at a pace that most believe is impossible. Let’s not accept the status quo when it comes to poverty, homelessness, and economic injustice. The Tesla community can be leaders in this space as well, if we so choose.
By 2016, I believed that no other company in the world was doing more to advance the transition to clean energy and transportation than Tesla. The 2016 article “The Tesla Way vs. The Toyota Way” that I co-authored with Jim Womack shows where my thinking was at that time. I have tried to watch every publicly posted statement and presentation that Elon Musk has made in the last ten years, I listen to the quarterly earnings updates, and I read CleanTechnica articles daily. From 2016–2019, I sold off most of my other stock investments and put all of that money into Tesla. I decided that if Tesla fails, I will fail with it.
Fast forward to June 2020. The world is in the throes of Covid — people are losing their jobs, their sources of income, and their homes. And Tesla has already doubled in valuation. By January 2021, Tesla’s market cap had grown by over $620 billion (January 3, 2020 the share price closed at $88.60, and on January 8, 2021 the price closed at $880.02). My personal net worth grew at this same pace. I decided to take 5–10% of those gains to try and leverage them for social good.
I was already familiar with the powerful efficacy of guaranteed income. However, I started to do a deeper dive into the literature and found astounding results like those of the New Leaf Project in Vancouver and the Stockton Economic Empowerment Demonstration. Our current social safety net is not only highly inefficient and ineffective, it is also demeaning and disrespectful to those it seeks to serve. The number of people who are unhoused is growing despite the enormous amount of resources dedicated to this challenge. The concept of basic income appealed to me, as it acknowledges the fundamental injustice and inequalities built into our economic systems while also making a powerful statement of trust and respect to individuals it serves. It is a direct investment in people that has the power to not only alleviate enormous human suffering but also unleash massive amounts of latent potential. It also has the potential to be an enormous stimulus to the economy.
In mid-2020, I started giving out $1,000 monthly grants directly to individuals who had been impacted by Covid. In January of 2021, the Denver Basic Income Project (DBIP) started to organize a formal guaranteed basic income pilot for unhoused individuals in Denver, accompanied by the RCT (the gold standard of research), to evaluate the impact. DBIP will be accepting applications from 2000 potential recipients through 15 partner organizations who will be the point of contact through the program and provide additional wrap-around support where needed. From this potential group, 820 of the applicants will then be randomly assigned to one of three groups. Group A will receive $6,500 up front and then $500/month for 11 months. Group B will receive $1,000/month for 12 months. Group C will be a comparison group and will receive $50/month for completing surveys and allowing us to see the impact of the basic income.
The Denver Basic Income Project is in the “soft launch” right now, testing and improving the program design as it prepares to move to the full launch in Q1 of 2022. We have raised over $3.8M of the $7.4M needed to run the program at full scale. We believe that at the end of this first phase, we will have learned a tremendous amount about how to deliver this cash to unhoused individuals in even more targeted and effective ways. 20 additional cities by 2022 and 200 more by 2023 will have a direct impact on over 100,000 individuals while also providing the learnings and direction to potentially scale the program and significantly reduce homelessness while increasing economic justice in a meaningful way.
I suspect that many of you reading this article may be Tesla shareholders. As you probably know, in the last month, Tesla’s market cap grew by close to $400 billion. I challenge you to take a small part of the gains you have received and deploy them with the goal of creating positive change. Do what resonates with you. If this project compels you, donate to the Denver Basic Income Project and help us close out our phase one fundraising. If you are feeling more bold, launch a similar initiative in your city. We’ll give you our playbook. Reach out to me directly and let’s start this conversation.
While we run these learning pilots, we can also start to apply first principles to affordable living. The emergence of low-cost clean decentralized energy, local food production (traditional, vertical, indoor/outdoor, technology supported), shared low-cost clean transportation, and modular automated manufactured homes (perhaps mobile) allow for innovation like never before. I believe we can reduce the cost of living by at least 75 percent while improving the quality of living and health dramatically. Thank you, Elon and everyone on your team, for inspiring me to dream big and act now with urgency.
Mark Donovan is a Denver based entrepreneur and philanthropist. He received a B.A. in Economics from Harvard and is a graduate of the National Outdoor Leadership School. In 1992 Mark co-founded Wooden Ships Knits, a Bali based women’s sweater brand. He has studied, practiced and taught the principles of Lean (The Toyota Production System). In 2020 he founded the Denver Basic Income Project to advance the use of cash assistance to combat income inequality. Mark is the father of three boys, an avid skier and outdoorsman who also loves to play the piano and guitar. He is committed to fighting all forms of injustice and protecting our planet for future generations.
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