GiveDirectly

GiveDirectly
Founded 2008 (2008)
Type Alleviating extreme poverty through cash transfers
United States IRS exemption status: 501(c)(3) under the name "GiveDirectly, Inc."[1]
Location
Area served
Kenya, Uganda, Rwanda
Employees
15 paid domestic and senior field staff; additional paid field staff in Kenya, Uganda, and Rwanda
[2]
Website givedirectly.org

GiveDirectly is a nonprofit organization operating in East Africa that helps families living in extreme poverty by making unconditional cash transfers to them via mobile phone. GiveDirectly transfers funds to people in Kenya, Uganda, and Rwanda.

History

GiveDirectly originated as a giving circle started by Paul Niehaus, Michael Faye, Rohit Wanchoo, and Jeremy Shapiro, students at MIT and Harvard, based on their research into philanthropy.[3] In 2012 they formalized their operation into GiveDirectly.[3]

GiveDirectly's operations were initially focused on Kenya, before expanding to Uganda in November 2013.[4] In 2016, the organization expanded to include operations in Rwanda.[5]

In December 2012, GiveDirectly received a $2.4M Global Impact Award from Google.[6] In June 2014, the founders of GiveDirectly announced plans to create a for-profit technology company, Segovia, aimed at improving the efficiency of cash transfer distributions in the developing world.[7][8][9] In August 2015, GiveDirectly received a $25M grant from Good Ventures.[10]

In April 2016, GiveDirectly announced a $30M initiative to test universal basic income in order to "try to permanently end extreme poverty across dozens of villages and thousands of people in Kenya by guaranteeing them an ongoing income high enough to meet their basic needs" and, if it works, pave the way for implementation in other regions.[11] The initiative launched in November 2017 and is set to run for 12 years.[12]

In 2017, GiveDirectly applied their model for the first time in the U.S., distributing cash-loaded debit cards to residents of Rose City, TX following Hurricane Harvey.[13]

Operations

Cash transfers

GiveDirectly distributes cash transfers to extremely poor families in East Africa using end-to-end electronic monitoring and payment technology. Their process follows four steps:

  • Targeting: First, GiveDirectly locates poor villages using publicly available census data. Then, GiveDirectly sends field staff door-to-door to collect data and enroll recipients.
  • Auditing: GiveDirectly uses independent checks to verify that recipients are eligible and did not pay bribes, including physical back-checks, image verification, and data consistency checks.
  • Transferring: Recipients are then given a mobile phone. Roughly $1,000 USD is transferred to recipients using electronic mobile payment systems, in about three payments. Typically, recipients receive an SMS alert and then collect cash from a mobile money agent in their village or nearest town.
  • Follow-up: Lastly, the charity calls each recipient to verify receipt of funds, flag issues, and assess customer service.

The average recipient family lives on $0.65 per day, making the $1,000 they receive more than one year's budget for a typical household.[14]

Basic income experiment

In April 2016 GiveDirectly announced that they would be conducting a 12-year experiment to test the impact of a universal basic income on a region in Western Kenya.[15][16]

Working in rural Kenya, it plans to conduct a randomized control trial comparing 4 groups of villages:

  • Long-term basic income: 40 villages with recipients receiving roughly $0.75 (nominal) per adult per day, delivered monthly for 12 years
  • Short-term basic income: 80 villages with recipients receiving the same monthly amount, but only for 2 years
  • Lump sum payments: 80 villages with recipients receiving a lump sum payment equivalent to the total value of payments of the short-term stream
  • Control group: 100 villages not receiving cash transfers

More than 26,000 people will receive some type of cash transfer, with more than 6,000 receiving a long-term basic income.

Evidence of impact

Cash transfers like those from GiveDirectly have arguably the strongest existing evidence base among anti-poverty tools,[17] with dozens of evaluations of cash transfer programs in Africa, Asia, and Latin America including both unconditional and conditional cash transfers. In a report on over 150 cash transfer studies, the think-tank ODI wrote:[18] "the evidence reflects how powerful a policy instrument cash transfers can be, and highlights the range of potential benefits for beneficiaries." An MIT study of six randomized controlled trials (RCTs) shows that the poor do not stop working when they receive cash.[19] A meta-study by economists at the World Bank and Stanford, aggregating dozens of cash transfer RCTs, found that the poor do not spend more on alcohol or tobacco, in fact, they spend less.[20]

Self-evaluation

In 2016, GiveDirectly partnered with Innovations for Poverty Action on a self-evaluation project funded by the National Institute of Health to collect evidence on their operations that could be used to judge their effectiveness. The research was led by Johannes Haushofer of Princeton University and Jeremy Shapiro, a development economist, co-founder of GiveDirectly, and a member of the GiveDirectly board until 2012. GiveDirectly preregistered the study, identified what variables need to be measured, and specified their predictions, which could then be tested against the evidence.[21][22] The working paper was released in October 2013[23] and showed that the impact per $1,000 distributed included encouraging increases in earnings (+$270), assets (+$430), and nutrition spend (+$330). There was a 0% impact on alcohol and tobacco spending.[24]

Funding

GiveDirectly collects donations from private donors on its website as well as foundations.[25] In 2015, the organization received a $25 million donation from Good Ventures, a private foundation started by Facebook co-founder Dustin Moskovitz and his wife, former Wall Street Journal writer Cari Tuna.[26]

In 2017 GiveDirectly received $5 million in Bitcoin from the Pineapple Fund.[27]

Reception

GiveWell reviews

GiveDirectly has been named a GiveWell 'top rated' charity for each of the last 5 years: 2012;[28][29] 2013;[30] 2014;[31][32][33] 2015;[33][34] 2016.[35][36]

Reception by development economists

After the release of GiveDirectly's impact self-evaluation in October 2013,[23] World Bank economist David McKenzie praised the robustness of the study's design and the clear disclosure of the study lead's conflict of interest, but raised two concerns:[37]

  • The use of self-reporting made the results hard to interpret and rely on (this being a feature of any study that attempted to measure consumption).
  • The subdivision of the sample into so many different groups meant that there was less statistical power that could be used to clearly decide which group had better outcomes.

Chris Blattman, a blogger and academic in the area of development economics, with a particular focus on randomized controlled trials, also blogged the study. He expressed two main reservations:[38]

  • The observer-expectancy effect, where the people being asked questions may be subtly influenced in their answers by the experimenter's expectations.
  • The lack of clear positive effect on long-term outcomes, as well as the lack of increased spending on health and education.

Impact on setting cash transfers as a benchmark

Jeremy Shapiro, a GiveDirectly co-founder and the person who published GiveDirectly's impact evaluation, has argued for using cash transfers (and more specifically, unconditional cash transfers) as a benchmark against which other development interventions should be evaluated, due to the simplicity and scalability of cash transfers.[39]

See also

References

  1. ↑ "GiveDirectly". GiveDirectly. Retrieved 2012-11-30.
  2. ↑ "GiveDirectly team page".
  3. 1 2 Goldstein, Dana (21 December 2012). "Can 4 Economists Build the Most Economically Efficient Charity Ever?". The Atlantic.
  4. ↑ Mukhopadhyaya, Piali (2013-11-20). "GiveDirectly is in Uganda!". GiveDirectly (blog). Retrieved 2013-11-21.
  5. ↑ Mukhopadhyaya, Piali (2016-12-15). "Launch of Core Operations in Rwanda". GiveDirectly (blog). Retrieved 2016-12-15.
  6. ↑ "Google Dot Org". www.google.org. Retrieved 2017-01-25.
  7. ↑ Hassenfeld, Elie (June 20, 2014). "Update on GiveDirectly". GiveWell. Retrieved June 21, 2014.
  8. ↑ Coleman, Isobel (June 20, 2014). "Segovia: A New Player in Cash Transfers". Development Channel blog, Council on Foreign Relations. Retrieved June 21, 2014.
  9. ↑ "GiveDirectly Update - August 2014". August 2014. Retrieved September 6, 2014.
  10. ↑ "Blog | GiveDirectly". www.givedirectly.org. Retrieved 2017-01-25.
  11. ↑ "What If We Just Gave Poor People a Basic Income for Life? That's What We're About to Test". Slate. 14 April 2016. Retrieved 17 April 2016.
  12. ↑ "The largest basic income experiment in history just launched in Kenya". Business Insider. Retrieved 2018-01-17.
  13. ↑ "After Harvey, One Group Is Hoping Giving Away Cash Will Help Houstonians Rebuild". NPR.org. Retrieved 2018-01-17.
  14. ↑ "GiveDirectly: Operating Model". GiveDirectly. Retrieved 2017-01-25.
  15. ↑ "What Would Happen If We Just Gave People Money?". FiveThirtyEight. 2016-04-25. Retrieved 2017-01-25.
  16. ↑ "Charity To Amp Up Direct Aid Mission In Impoverished East Africa". NPR.org. Retrieved 2017-01-25.
  17. ↑ "GiveDirectly: Research on Cash Transfers". GiveDirectly. Retrieved 2017-01-25.
  18. ↑ "Cash transfers: what does the evidence say? A rigorous review of impacts and the role of design and implementation features". ODI. Retrieved 2017-01-25.
  19. ↑ Banerjee, Abhijit. "Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide".
  20. ↑ Evans, David K.; Popova, Anna (2016-11-29). "Cash Transfers and Temptation Goods". Economic Development and Cultural Change. 65 (2): 189–221. doi:10.1086/689575. ISSN 0013-0079.
  21. ↑ "Evidence page on GiveDirectly". GiveDirectly. Retrieved 2011-12-01.
  22. ↑ Kenya (2011-05-18). "Innovations for Poverty Action page on the project with GiveDirectly". Innovations for Poverty Action. Retrieved 2011-12-01.
  23. 1 2 Haushofer, Jonathan; Shapiro, Jeremy (2013-10-24). "Policy Brief: Impacts of Unconditional Cash Transfers" (PDF). Retrieved 2013-10-26.
  24. ↑ Haushofer, Johannes (2016-04-25). "THE SHORT-TERM IMPACT OF UNCONDITIONAL CASH TRANSFERS TO THE POOR: EXPERIMENTAL EVIDENCE FROM KENYA" (PDF). Princeton.edu. Retrieved 2016-04-25.
  25. ↑ "Group gives cash aid to rural Kenyans, then studies its effects". PBS NewsHour. Retrieved 2018-01-04.
  26. ↑ Dolan, Kerry A. "Facebook Billionaire's Good Ventures Donates $25 Million To GiveDirectly, Which Gives Cash To The Very Poor". Forbes. Retrieved 2018-01-04.
  27. ↑ Weller, Chris. "The world's largest basic income experiment just received a $5 million donation in bitcoin". Business Insider.
  28. ↑ Karnofsky, Holden (November 26, 2012). "Our Top Charities for the 2012 Giving Season". GiveWell. Retrieved November 26, 2012.
  29. ↑ "Top charities - November 2012 archived version". GiveWell. November 2012. Retrieved December 1, 2013.
  30. ↑ Karnofsky, Holden (December 1, 2013). "GiveWell's Top Charities for Giving Season 2013". GiveWell. Retrieved December 1, 2013.
  31. ↑ "GiveDirectly". GiveWell. December 1, 2014. Retrieved December 1, 2014.
  32. ↑ Hassenfeld, Elie (December 1, 2014). "Our updated top charities". GiveWell. Retrieved December 1, 2014.
  33. 1 2 "Top charities". GiveWell. Retrieved November 20, 2015.
  34. ↑ "Our updated top charities for giving season 2015". November 20, 2015. Retrieved November 20, 2015.
  35. ↑ Stone-Crispin, Natalie (June 23, 2016). "Mid-year update to top charity recommendations". GiveWell. Retrieved June 26, 2016.
  36. ↑ "GiveDirectly, as of November 2016". GiveWell. November 2016. Archived from the original on November 30, 2016. Retrieved November 29, 2016. Published: November 2016
  37. ↑ McKenzie, David (October 27, 2013). "Some thoughts on the Give Directly Impact Evaluation". World Bank. Retrieved November 28, 2015.
  38. ↑ Blattman, Chris (October 25, 2013). "And the cashonistas rejoice". Retrieved November 28, 2015.
  39. ↑ Shapiro, Jeremy (November 24, 2014). "More than money: How cash transfers can transform international development". World Bank. Retrieved November 28, 2015.
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