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What I’ve Learned from Giving Directly to People in Need What I’ve Learned from Giving Directly to People in Need

What I’ve Learned from Giving Directly to People in Need

by Michael Faye

January 4, 2014

Like many donors, I often wondered where my donations could do the most good. With no shortage of holiday giving options, I had many choices: cows, school uniforms, training programs, and the list goes on. Yet, there was one choice I didn’t have — giving that freedom of choice back to the poor, and letting them decide what was best for them. While at first this didn’t feel completely comfortable, I also knew that more than a decade of rigorous scientific evidence suggested otherwise. Disadvantaged communities have one of the best track records of investing donor funds wisely. Upon reflection, this made more sense: how could I possibly know more about the needs of a specific western Kenyan farmer than she does herself?

We developed GiveDirectly with that concept in mind. Our goal has been to build the most efficient “pipes” to allow others to give unconditional cash transfers (UCTs) to people in need. By providing these transfers, you are providing the poor the opportunity to pursue their own dreams and priorities. If someone needs a roof for their house, they can purchase a roof. If they need to pay for school fees, they can pay for school fees. If they want to be able to sell milk or start a taxi business, then they can invest in a cow or motorcycle. Each family can spend on whatever they need most. So what do they need?

We decided to answer this question by subjecting our work to an external evaluation by Innovations for Poverty Action, a leading organization for program evaluation. To ensure the integrity of the study, and avoid post facto data mining — the ease of which I learned during graduate school — IPA released the survey instruments, before the data was even collected.  This past October, IPA released the results: business and agriculture income increased 28 percent (not including cost savings from durable goods like tin roofs), children were 42 percent less likely to go entire days without eating, mental health improved substantially, and domestic violence fell in both treated households and their near neighbors.

These findings were in themselves not that surprising — there have already been dozens of studies finding the positive impacts of cash transfers. For example, in another recent study in Uganda, Blattman et al (2013) found an income increase of 38 percent after four years (and people are still working 17 percent more hours); a study in Malawi found that cash transfers reduced HIV infection rates by half in unmarried women. Perhaps the most interesting aspect of these studies is the wide range of impact, highlighting the diversity of opportunities and challenges the poor facer.

Yet, I learned something even more exciting from this evaluation: donors like you and me are beginning to place even greater weight on transparency and evidence. Several top newspapers covered the results of the randomized trial, GiveWell applauded our efforts as the “the first time, we’re aware of a charity that can point to a highly rigorous and recent study of its own work,” and NPR has even dubbed this growing movement the rise of “nerd philanthropy.” We are now seeing thousands of people turn to direct giving on the basis of the evidence. Achieving such change in the sector, however, will not be easy: reams of data and scientific evidence will never feel as good as the emotional anecdote, or the ability to see the up-close impact of your giving. But, it will be important. And we encourage you to help join us in establishing cash transfers as a benchmark for the sector and ask the question: could a non-profit do more good with this money than the poor could do with it themselves?

Founded in 2011, GiveDirectly was recently named one of the top three charities by non-profit charity evaluator GiveWell.

To participate in what we're doing you can donate now and Good Ventures  will match all donations to GiveDirectly through January 31, up to $5 million.

This project is part of GOOD's series Push for Good—our guide to crowdsourcing creative progress.

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