GiveDirectly

gdMany international organizations targeting extreme poverty rely heavily on internet access in remote regions to do their work. One impressive organization, for example, is GiveDirectly, a New York-based non-profit which provides direct, unconditional cash transfers to people in extreme poverty.

Anyone who has worked in global development can at times be frustrated by inefficiencies. For example, a taxpayer in the US gives money to the federal government, which gives money to USAID, which gives money to an international consulting firm, which gives money to a regional non-profit, which arranges contracts to build and manage a hospital, which serves poor people. Might it be better to simply skip all of the intermediaries and give money directly?

But if that happens, what will poor people do with the money? Waste it?

GiveDirectly explores the efficacy of unconditional cash transfers, as well as (more recently) programs of Universal Basic Income. They study whether it is better to give money to everyone in a community, or just the poorest?; women or men?; fewer installments or more?; shorter commitments or longer? How does performance compare to traditional aid programs?

GiveDirectly does an excellent job designing randomized controlled trials, as well as having work reviewed by third parties. The working conclusion of the cumulative research at this stage is that while unconditional cash transfers aren’t without challenges, they are highly effective in moving people out of extreme poverty. They are apparently more effective than most aid programs, and should at the least be used as a performance yardstick against which to measure all other development efforts (much like how a stock index fund can be used as a performance yardstick against managed funds).

In its five years since inception, GiveDirectly has transferred over $140 million to individuals, mostly in rural Kenya and Uganda.

In order to scale services, in 2014 GiveDirectly spun out a for-profit company called Segovia which provides to GiveDirectly — and any other customers — the platform used for transferring and monitoring unconditional cash transfers.

In addition to providing real-time performance metrics on their site, GiveDirectly also provides a live, un-edited feed of comments from recipients. Their site also offers and excellent FAQ section. The organization was also featured recently in an excellent New York Times review which provides a nice portrait of the impact GiveDirectly has at the village level.

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