By: Caleb Atkins

Universal Basic Income is a concept that everyone receives a certain amount of income regardless of their gender, race, income, or employment status. Universal Basic Income has been supported by a wide range of people including civil rights activist Martin Luther King Jr., former Presidents Barack Obama and Richard Nixon, Nobel-winning economist Milton Friedman, and the entrepreneur Elon Musk. Some argue that it is a basic human right and others argue that it would only have a negative impact on the economy and society. Those of a conservative ideology that are against UBI say that it is socialist idea made to steal from upper class society members and give as a handout to those who don’t work as hard, but those against it that have a more liberal ideology say that it is designed to destroy social safety nets so that the lower class will have less social mobility.

There is currently a Democratic Presidential candidate running in the 2020 election named Andrew Yang, he is a businessman who came into the race as a virtually unknown candidate and has become known because of his ambitious idea of implementing a Universal Basic Income that he calls the Freedom Dividend. The Freedom Dividend would provide any American citizen above the age of 18 with $1000 a month.

Source: Yang2020.com

The most common questions that follow hearing about the Freedom Dividend tend to be about how it would be paid for, why would everyone receive it, will this cause mass inflation, and does it replace any other social programs. Yang has answered all of those questions, like the concern about inflation, inflation only occurs when new money is printed or created in an economy, not when it is redistributed. These questions and concerns are all valid and he has answered most of them on various social media platforms, interviews, and on his website.

Since many of those questions have answers, the question that I ended up asking myself is how would I spend my $1000 a month that I would be receiving because of the Freedom Dividend? How would everyone else spend their $1000? After some thought I decided that I would probably put a large portion of it directly into savings, put some aside for some something like a few nice weekend meals and vacations, and then donate the rest to various charities and non-profits. I am not sure how exactly others would spend their $1000 a month but I imagine that some would put at least a little bit of it towards charities and non-profits as well. So, my next question is how would the Freedom Dividend impact the non-profit sector?

I decided that I would collect some data and do the math to measure the impact of the Freedom Dividend on the nonprofit sector.

Here are some raw numbers that I used to help calculate my estimates (most of the numbers are rounded down in order to give the fairest estimates):

§ There are about 330 million US citizens, of those 330 million about 255 million are above the age of 18, making them eligible to receive the Freedom Dividend.

§ $410.02 billion was given to charities in 2017.

§ In 2017 70% of all charitable contributions came from individuals (this is important because individuals would be receiving the Freedom Dividend, not corporations).

§ 69% of the population gives to charity.

§ Approximately 63 million Americans, about 25% of the population, volunteer some amount of their time.

§ In 2016 Americans volunteer time was valued at $24.14 per hour.

§ People average 52 hours per year volunteering.

*the US population numbers are rough estimates due to varying available statistics*

What would giving a $1000 a month to 255 million Americans do for charities and non-profits?

Let’s say that 10% of the people who receive the Freedom Dividend end up donating an average of 10% of their $1000 a month ($100) to a charity or non-profit (an average of 10% of the Freedom Dividend is a fair number to work with if you consider that some people may donate 1% of it and others may donate 100%). If that were to happen then that would be an increase of over $2.5 billion a month in charitable contributions, which adds up to more than $30 billion in additional donations each year.

Now, using 10% as the number of people who would give some of their Freedom Dividend to charity is a low estimate, so let’s increase the percentage of people to the same number of people who already give to charity, which is 69%. If 69% of people who would be eligible to receive the Freedom Dividend give an average of just 10% of it to charity then that would be an increase of more than $17.5 billion in charitable contributions each month, which adds up to over $211 billion each year. If this were to happen that would increase total charitable contributions by over 50%.

Even though 69% of people already give to charities or non-profits it is still fair to say that 69% of people giving 10% of their Freedom Dividend is a bold estimate. So, what would the total charitable contribution increase look like if we reduced the estimated number of people to 50%? That would still increase charitable contributions by more than $12.7 billion a month if the 50% people who were receiving the Freedom Dividend gave an average of 10% of it to charity. That would add up to $153 billion a year increase in charitable contributions, still an impressive number when you consider that would increase yearly charitable contributions by 37%.

The next question is: how would the nonprofit sector be indirectly impacted by a Universal Basic Income? The answer is that it would it completely change the nonprofit sector in the best way possible. If most of the US population were to receive the Freedom Dividend then they would have more time that they could volunteer to charities because they would be much more financially stable, that time they could be volunteering was valued at $24.14 per hour in 2016.

Nonprofits and charities could also afford to hire more staff and take on more projects because of the increased funding due to the increase in donations, because of the Freedom Dividend, which would lead to even more volunteer opportunities. Some people may even become incentivized to take a slight pay decrease and start working in the nonprofit sector because of the increased financial security the Freedom Dividend would provide.

Since 25% of Americans already volunteer some of their time each year, lets estimate what would happen if 5% of the US population above the age of 18 were to volunteer an additional 10 hours of their time per year. If that were to happen then that would be more than a $3 billion increase worth of volunteer time given to charities and nonprofits.

Another potential effect of a Universal Basic Income implementation is that it could reduce the need for many of the currently existing charities and nonprofits, with UBI there would be less of a need for things like homeless shelters and food banks. This would mean that the tremendous increase in funding, volunteers, and staff of the nonprofit sector would be able to shift their focus on other issues like suicide prevention, educational programs, and civil rights advocacy.

Regardless of what anyone thinks about UBI, the numbers show that there is a lot of potential benefit for the nonprofit sector if the United States were to implement some form of a UBI.

Universal Basic Income would not just lift the lower class up, it would also incentivize the middle and upper class to do and give more to the organizations that help make the world a better place.

(I used Andrew Yangs Freedom Dividend as my example of UBI because he has a plan that is being presented that gives exact dollar amounts to use. Andrew Yang is also the person who has brought the topic of Universal Basic Income to the minds of many Americans who had previously never even thought about it.)

Bibliography

Colby, Sandra L., and Jennifer M. Ortman. Projections of the Size and Composition of the U.S.

Population: 2014 to 2060. Mar. 2015,

https://www.census.gov/content/dam/Census/library/publications/2015/demo/p25-1143.pdf

“Giving Statistics.” Charity Navigator, 12 June 2018,

https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42

Lalák, Adam. “What Would Universal Basic Income Mean for the Non-Profit Sector?”

NfpSynergy, 12 Dec. 2018,

https://nfpsynergy.net/blog/what-would-universal-basic-income-mean-non-profit-sector

“2018 Online Giving Statistics, Trends & Data: The Ultimate List of Giving Stats.” Nonprofits

Source, https://nonprofitssource.com/online-giving-statistics/

https://www.yang2020.com/policies/the-freedom-dividend/