‘People have talked about ending poverty for decades — but GiveDirectly gives us the model that can deliver it.’
— Rory Stewart, President of GiveDirectly.
GiveDirectly is a nonprofit organisation founded in 2008. In 2012 it won the Global Impact Award from Google and $2.4M. But this is no ordinary kind of aid. There’s no giving people goats or mattresses, or teaching them how to fish or filter water. Instead, GiveDirectly focuses on bank transfers that deliver cash directly via mobile phone to those living in extreme poverty including people in East Africa, Yemen, and the USA.
So, does it work?
Given some philanthropic organisations’ chequered history, how can we be certain that this is an effective form of aid giving? Well, GiveDirectly followed up with 99 per cent of recipients in 2021 to let them answer this very question. Rory Stewart, the organisation’s new President, says that this form of aid has been ‘hiding in plain sight.’ It’s hard to disagree with him. Traditionally, aid giving involves a group of experts flying out to a remote village, say in East Africa, and deciding then and there what would be most beneficial for the people of that village. Do they need a cow? Food? Water? Should their house be repaired? However, giving unconditional cash sums to those in poverty is a better way of helping. This way, people have the freedom to spend their money as they see fit. After all, it’s their life and the decisions governing it should be theirs too.
According to Stewart, one notable advantage of giving directly is the extraordinary ‘impact’ and ‘speed’ that this sort of aid can have. It’s more flexible and recipients can get more than just one necessary item from overseas which has racked up thousands of carbon footprint miles just to get to them. Some people might still be unconvinced that this is a responsible method of providing help. Stewart himself was sceptical of the idea at first. Like many, he thought that the best way to give aid was by: ‘teaching people to fish rather than giving them fish, and this seemed like a fish-giving project.’ So far, GiveDirectly has sent $400M+ in unconditional cash transfers and is going from strength to strength.
GiveDirectly also manages to be transparent about where the money goes, citing cash transfers and fundraising as the only two ways they spend the money they’re given. This transparency marks a refreshing break from other NGOs that are less open about their finances. GiveDirectly also conducts research into the effects of UBI-type aid (Universal Basic Income). In one particular study, a $330 increase in nutrition spending was noted, while zero per cent was spent on alcohol or tobacco. This supports the argument that those living close to the poverty line are unlikely to abuse the aid being given.
Winning over the sceptics might not be easy, but GiveDirectly has already shown how much good direct and unconditional cash transfers can do for the average person. One thing is for sure, the future of philanthropy is looking more promising without the bureaucracy and red tape.
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