The rise of direct giving in development philanthropy

Future World Giving

Photograph by Emil Sjöblom (emilsjoblom) via Flikr

Give Directly is challenging other not for profits to prove that they can do more for the poor with a dollar than the poor could do for themselves.

 

Anyone who has an interest in trends in global philanthropy, or international development for that matter, could not fail to have heard of Give Directly. Indeed, listeners to the excellent This American Life radio programme/podcast were given a unique insight into the thinking behind the direct cash transfer charity in the recent episode entitled “I Was Just Trying to Help“, which included interviews from co-founders Michael Faye and Paul Niehaus and a number of beneficiaries in Kenya. Further analysis by Planet Money reporter Jacob Goldstein also appeared in an article in the New York Times Magazine.

 

The idea at the core of Give Directly is a simple one – that the most efficient way to alleviate extreme poverty is by giving money directly to the poorest people in the world and that they are in the best position to know how to spend it. The first part of this proposition is indisputable. Extreme poverty, defined as between $1.25 and $2.50 a day, would be eliminated more quickly, in the short term at least, were all charitable funds to be simply transferred directly to the poor. But whether beneficiaries of cash transfers from Give Directly are able to spend the money effectively and experience better outcomes in the long run is a matter for debate in the development community. Until now.

 

To attempt to answer that question Give Directly are undertaking a large randomised controlled trail of their activities in Kenya to measure the outcomes for recipients of cash transfers on a wide range of variables against people who have not received funds. This approach to impact measurement poses a challenge for not for profits interested in alleviating poverty and its associated problems to demonstrate impact for their total spend against those seen in cash transfers. Give Directly co-founder Paul Niehaus told This American Life:

 

“We would like to see organisations make the case that they think they could do more for the poor with a dollar, than the poor could do for themselves. That would be fantastic and I think some may be able to make a convincing case but if you go to the websites today, I don’t think you are going to see that argument being made.”

 

But whether all of the underlying causes of extreme poverty and the associated problems it causes are best alleviated by cash transfers will be difficult to ascertain even with this data. Whilst the outcomes for the individuals who receive money may be improved, the research won’t be able to tell us what the long term impacts for society are.

 

It seems unlikely that some of the more complex issues that are holding back development in many countries will be addressed by cash transfers alone. Cash transfers are unlikely to address the problems caused by alcohol abuse or prostitution for example, and may in fact contribute to them. Factors like Gender inequality, disability, conflict, environmental sustainability and corruption which hamper growth may well be hitting the finances of the poor as hard, or harder than cash transfers can replenish them. But this is much more difficult to measure.

 

Some of the language used by advocates direct giving suggests that other forms of philanthropy are somehow patronising beneficiaries by not trusting them to spend their money wisely. But providing advice, training and human compassion whilst incentivising behaviours that have been shown to be beneficial to society are fundamental to bringing about social gains in every community, in every country.

 

Overall, direct giving is an innovation that should be welcomed as a new and important tool in the philanthropist’s toolkit. The benchmark it sets for impact could be hugely important for philanthropy and could transform the way we think about international development. However, direct giving is not a panacea.

 

In an era where the public are increasingly being exposed to negative narratives about not-for-profit waste and failure and when scandals are more newsworthy than success stories, it is important that we do not over simplify poverty alleviation and the bigger picture of international development. In addition, we also need to think about the importance of engaging communities in building capacity in a domestic civil society. Because simply receiving money through mobile phone transactions is unlikely to empower communities to tackle the underlying barriers to development.

 

Adam Pickering

7 responses to “The rise of direct giving in development philanthropy

  1. Thanks for this Adam. I am a big fan of what Give Directly is doing and the challenges to aid agencies that it is issuing, however I also agree with you that it is not the magic bullet solution to development. What I find interesting about their approach is that there is still a significant amount of control held by the intermediary as donors are requested to trust them to make the decision about who to give their money to. Also, I find it interesting that their work is limited at this stage to “stable” development contexts and not disaster response. At Give Aid Direct (http://www.giveaiddirect.com/) we are establishing a platform that gives the donor and the recipient choice – “you choose who, they choose how” – and ideally we are wanting to implement our model in a disaster response. One of the main reasons for this is that I believe aid agencies need to consider what technology enables us to do now and help facilitate that (i.e. person-to-person giving) and focus on the things technology and cash transfers will never be able to do.

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    • Thank you for your comment and congratulations on your recent successful application for charitable status.

      The point you make about unconditional cash transfers (UCTs) in a disaster relief context is interesting. Though I can’t read the mind of management at Give Directly I suspect that their hesitance to focus on disaster and conflict ravaged areas relates to their desire to prove the efficacy of UCTs through detailed impact measurement. The effect of a UCT on an individual persons circumstances would be difficult to distinguish in an environment as changeable as and precarious as a disaster zone. I suppose that, that is the ultimate problem for those working in humanitarian relief – articulating what would have happened without their intervention.

      With regards to Give Aid Direct, can I ask whether the group of experts who select individuals who stand to benefit from donations work for operational charities on the ground in a similar way to organisations like Kiva?

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  2. Dear sirs and madams,
    My name is Theresa Spencer, and I write to you today having found myself DESPERATE to solve a major problem I have less than 2 weeks to solve! I BEG that you PLEASE go to, and READ a campaign I unsuccessfully launched at GoFundMe, under my name, (Theresa Spencer), with the title of “Save Our Home”! PLEASE HELP ME! Maybe you folks are a LARGE agency, and could potentially ask everyone to donate a dollar or two, and I could reach my goal THAT way! What I ask there, is VERY REAL, and I am mortified that I have to resort to this, . . . But the reality of the situation will have a family of 5, (3 of whom are bonafide disabled, along with my 5 year old granddaughter, who JUST started kindergarten), becoming HOMELESS almost immediately, with NOWHERE to go! PLEASE go to the campaign and read it, and I PRAY that you folks will help us! THANK YOU, so much, for ANYTHING you can do! (P.S. I have spent the last 3 weeks TRYING to get SOME kind of equity loan, but have NO credit, and find that the 100% equity in my home will NOT help me! At THIS point, there is NO TIME to “fight city hall”, so to speak, OR to hope to qualify for any of those loans, ANYWAY!) PLEASE TRY to help us, SOMEHOW, and absolutely FEEL FREE to contact me! I am running out of time, and will LISE this home to auction, if we can not come up with a few thousand dollars!!! Again, . . . Thank You, so much, and I apologize fir having to ask this of ANYONE!
    Truly and sincerely, Theresa

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    • OMG!!! I just laid my SOUL out to you people, with a very REAL and TERRIFYING situation of NEED, and all you want to know is if I would like to follow your work via a newsletter?!? I was NOT JOKING! We ARE people who are in TRUE NEED of some REAL HELP, and I guess nobody wants to HELP a “domestic” situation! It took a LOT (away from my PRIDE), to even ASK for the help, and nobody could even MENTION our situation when replying, AT ALL! I don’t know if you have EVER had to ask this kind of help of someone, . . But I am here to tell you that it is NOT EASY, and if we do NOT get some help ASAP, from SOMEWHERE, we will LOSE OUR HOME! Is this NOT a WORTHY CASE?!? (For a few thousand tax dollars which I can NOT cone up with QUICKLY enough, . . . A family of FIVE will LOSE their HOME, (which is PAID FOR), AT auction! Not ONLY will we all be HOMELESS, . . . But I, personally, will lise ALL THAT I HAVE! There us 100% EQUITY in this home! Can’t ANYINE there even TRY to help?!? I even suggested msybe everyone donate ONE DOLLAR, and uf rgere are ENOUGH of you there, TAX BILL PAID!!! PLEASE HELP US!!!!!

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    • Does ANYBODY there, even CARE?!? In a matter of DAYS, our HOME will be auctioned by the county, for a matter of 3k of back taxes which we can not pay within the time given!!!!! Can you PLEASE HELP?!?!? (There are 3 disabled people under this roof, and a 5 year old child, who WILL be HOMELESS, this time, next week!) PLEASE HELP US! Thank you! (P.S. I have tried EVERY other measure, including loans, and it can not be done that way! The ONLY loan I could get, would HAVE TO be PRIVATE. I WOULD put my home up for that person. If your agency can not help, MAYBE there is someone THERE, (a C.E.O., or someone wirh means), who would take the chance, and make me thatosn, to help this family!!!) Again, I thank you.

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