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An 11-year-old schoolboy in Las Vegas, Nevada named Trevor McKinney (Haley Joel Osment) is given a class project to complete by his social studies teacher Eugene Simonet (Kevin Spacey), a man with terrible burn scars on his face and neck. His task is to come up with a plan that will change the world through direct action. On his way home from school later that day, Trevor notices a homeless man, Jerry (James Caviezel) and decides to make a difference in Jerry's life. Trevor then comes up with the plan to "pay it forward" by doing a good deed for three people who must in turn each do good deeds for three other people, creating a charitable pyramid scheme. Trevor's plan is to help Jerry by feeding and housing him so he can "get on his feet."
The next morning, Trevor's mother, Arlene McKinney (Helen Hunt), a single mother recovering from alcoholism, becomes angry with Trevor after finding Jerry in their house. She then accuses and confronts Eugene at the school about the reason Trevor has allowed Jerry into their home. Eugene is also intrigued by Trevor's response to the social studies project.
Later that night back at their home, Trevor confronts his mother about her alcoholism, and in a fit of anger she slaps him across the face. ...