A year-long experiment in Prague has tested a simple question: what happens when people without stable housing are given money with no conditions attached.

The answer, according to researchers, runs counter to common assumptions.

In the study, 40 people experiencing homelessness each received a one-time payment of 100,000 Czech crowns. They were free to spend the money as they chose, without oversight or restrictions. Researchers tracked their progress over the following 12 months.

The findings suggest that most participants did not spend the funds on alcohol or drugs, as is often assumed. Instead, many used the money to cover basic needs and secure housing. By the end of the study period, around 80 percent had found some form of accommodation, and more than half managed to maintain it.

The project, known as New Leaf Czech, followed a total of 100 participants divided into three groups. In addition to those who received cash, 20 people worked closely with a dedicated social worker, while another 40 formed a control group with no direct support.

Melanie Zajacová, who led the research and heads the Department of Social Work at the Faculty of Arts at Charles University, said the results were stronger than expected. Direct financial support produced an immediate effect, while social work showed more gradual but lasting benefits.

“People often assume that money would be wasted,” she said during a presentation of the findings. “But that was not what we observed.”

The research also points to a decline in the use of addictive substances among participants who received financial support. At the same time, their ability to meet everyday needs improved, with spending focused mainly on food, clothing and housing.

Employment outcomes offered another insight. At the start of the study, roughly half of the participants had some form of income. Over time, their financial situation improved modestly, though earnings remained low, well below Prague’s average salary.

The data indicates that access to money did not reduce motivation to work. In some cases, it helped participants move closer to stable employment.

Psychological well-being also improved, particularly among those who worked with social workers. Several participants re-established contact with family members, suggesting that personal support played a role beyond financial stability.

The project distributed a total of four million crowns to participants, while overall costs reached about 12 million crowns. Around three million crowns came from the Ministry of Labor and Social Affairs, which co-financed the initiative.

The team argues that the results challenge widely held views about homelessness. Many participants, they note, did not end up on the streets by choice, but due to personal crises, financial shocks or mental health struggles. Trust, they suggest, may be as important as material support.

An economic analysis, expected later this year, will examine whether similar programs could reduce long-term public spending.

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