GiveDirectly

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GiveDirectly
GiveDirectly Logo.gif
TypeAlleviating extreme poverty through cash transfers
United States IRS exemption status: 501(c)(3) under the name "GiveDirect Inc."[1]
Location
Area servedKenya, Uganda
Key people
  • Paul Niehaus (CEO)
  • Rohit Wanchoo (CFO)
  • Michael Faye (Chairman of the Board)
  • Chris Hughes (Board Member)
[3]
Employees3 (paid full-time executive staff) + 2 senior field officers + additional field staff in Kenya and Uganda
+ 5-10 (part-time + pro bono)[3]
Websitegivedirectly.org
 
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GiveDirectly
GiveDirectly Logo.gif
TypeAlleviating extreme poverty through cash transfers
United States IRS exemption status: 501(c)(3) under the name "GiveDirect Inc."[1]
Location
Area servedKenya, Uganda
Key people
  • Paul Niehaus (CEO)
  • Rohit Wanchoo (CFO)
  • Michael Faye (Chairman of the Board)
  • Chris Hughes (Board Member)
[3]
Employees3 (paid full-time executive staff) + 2 senior field officers + additional field staff in Kenya and Uganda
+ 5-10 (part-time + pro bono)[3]
Websitegivedirectly.org

GiveDirectly is a nonprofit organization currently operating in Kenya and Uganda that aims to help people living in extreme poverty by making unconditional cash transfers to them via mobile phone (through m-Pesa). It is the first charity dedicated exclusively to cash transfers. It claims that 90% of donor funds are utilized in the form of the actual cash transfers, with the remaining 10% split between fees for the transfers and recipient identification costs. This is far more efficient than other charities, according to the American Institute of Philanthropy.[4]

In August 2012, Chris Hughes, one of the co-founders of social network Facebook and (as of August 2012) the publisher and editor-in-chief of The New Republic, who had also worked for the 2008 Obama presidential campaign, joined the GiveDirectly board and published a personal message on the GiveDirectly website lauding GiveDirectly's approach.[5]

In November 2012, charity evaluator GiveWell named GiveDirectly its #2 recommended charity for 2012 end-of-year giving.[6][7] In December 2013 GiveWell named GiveDirectly as one of its top three charities (numerical rankings were not provided in 2013, but GiveWell recommended donors give to all three top charities until they reached "minimum targets", which was $2.5M for GiveDirectly).[8][9]

History[edit]

GiveDirectly was founded by a team led by Paul Niehaus, then in Cambridge, Massachusetts. Niehaus is now an Assistant Professor of Economics at the University of California, San Diego, in addition to being the unpaid CEO of GiveDirectly.

According to its website:[3]

GiveDirectly originated in Cambridge, MA in 2008 when its founders were completing advanced degrees in economic development at Harvard and MIT. Through their work the founders learned of the explosion of mobile banking in developing countries and realized that this would make it possible to send donations securely and very cheaply to the poor. Because existing non-profits were not taking advantage of the opportunity, they created GiveDirectly as a vehicle for transfering their own money.

GiveDirectly's operations were initially limited to Kenya. In November 2013, GiveDirectly officially announced that it had begun operations in Uganda. This would be its second country of operation.[10]

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.[11][12][13]

Operations[edit]

GiveDirectly staffer enrolling a recipient in Kenya for cash transfers. Photo courtesy GiveWell.

Cash transfers[edit]

As of December 2012, GiveDirectly was operating unconditional cash transfers in selected areas of the Siaya District and Rarieda Constituency in Western Kenya. GiveDirectly lists the following four steps on its website to describe how their system works:[14]

  1. Donors donate to GiveDirectly through the webpage
  2. GiveDirectly locates poor households in Kenya using a combination of census data and on-the-ground investigations.
  3. Once recipients are registered, GiveDirectly transfers money to the recipient's cellphone using the m-Pesa system. Recipients who do not own cellphones are given SIM cards that they can use to retrieve the money by visiting a local m-Pesa agent.
  4. Recipients then use the money for their own goals. There are no conditions on how the recipients must spend the money.

In November 2013, GiveDirectly officially announced that it had begun operations in Uganda. This would be its second country of operation.[10]

Self-evaluation[edit]

GiveDirectly is partnering with Innovations for Poverty Action in a project funded by the National Institutes of Health in the United States to collect evidence on their operations that can be used to judge their effectiveness. The research is 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. It preregistered the study, identified what variables need to be measured, and specified their predictions, which can then be tested against the evidence.[15][16] The working paper was released in October 2013.[17] The following points were listed in the results summary of the report:

Funding[edit]

GiveDirectly seeks funds from individual donors on its website. Additionally, it has received grants from a number of foundations.

Foundation funding[edit]

GrantmakerDate of announcementAmount of grant (in US$)More information
Good Ventures[18][19]December 3, 20132,000,000 + matching fundsThis was part of an announcement of grants and matching funds for charity evaluator GiveWell's top-rated charities for 2013 end-of-year giving. Good Ventures announced US$2 million to GiveDirectly, plus matching funds for up to $5 million for funds raised up to January 31, 2014, and limited to a maximum match of $100,000 per individual donor. GiveWell wrote a blog post clarifying that they had recommended the grant but had recommended against the donation matching. The amounts would be counted against GiveWell's "minimum target" values for 2013, so that the left-over minimum target for GiveDirectly for 2013 was only $500,000.[19]
Good Ventures[20]December 28, 2012500,000This was part of grants that Good Ventures made to all of GiveWell's top-rated charities. GiveDirectly was #2 on GiveWell's list at the time. The top charity, Against Malaria Foundation, got $1.25 million, while the #3 charity, Schistosomiasis Control Initiative, got $250,000.
Google as part of the Global Impact Awards Program[21][22][23]December 4, 20122,400,00090% of the award ($2.21M) was for direct cash grants to the poor. The remaining amount, $190,000, was for the costs of setting up operations in another country (which was later revealed to be Uganda).
Good Ventures[21][24]August 6, 2012100,000This grant was announced as part of a collection of grants to charities identified as "stand-out charities" by charity evaluator GiveWell. Good Ventures granted only US$50,000 to other charities identified by GiveWell as standouts. The reason for the higher grant allocation to GiveDirectly was that Good Ventures staff felt that cash transfers were a particularly promising form of intervention and were also impressed with the GiveDirectly team.[24]
Lampert Family Foundation[21]July 2011100,000

Individual funding[edit]

As a result of being recommended as the #2 charity by charity evaluator GiveWell for the giving season in 2012, GiveDirectly received about US$1,329,539 in 2012 via GiveWell. This includes two grants by Good Ventures of $100,000 and $500,000 made in 2012. The remaining donations total $729,539 and came mostly from individual donors.[25]

GiveWell review[edit]

2014 review updates[edit]

GiveWell published updates on GiveDirectly in June 2014[26] and August 2014.[13] The latter included a conversation with GiveDirectly on how their continued growth plans interacted with the technology that Segovia, the for-profit company created by GiveDirectly's founders, intended to develop.

November 2013 review[edit]

In November 2013, in preparation for its 2013 end-of-year giving season, GiveWell published a new review of GiveDirectly.[27] Based on this review, GiveWell listed GiveDirectly among its top charities for the 2013 end-of-year giving season, alongside Schistosomiasis Control Initiative and Deworm the World Initiative.[8][9] GiveWell specified a "minimum target" in funding for each charity, and the minimum target for GiveDirectly was US$2.5 million.[8]

GiveWell identified a number of strengths and weaknesses in GiveDirectly.[27] The strengths identified by GiveWell were:

GiveWell listed the following major unresolved issues:

Response to the GiveWell review[edit]

On December 3, 2013, Good Ventures (an effective philanthropy organization that works in close collaboration with GiveWell) announced a grant of US$2 million to GiveDirectly, so that only $500,000 of the minimum target specified by GiveWell for GiveDirectly was not yet raised. Good Ventures also announced that it would match up to $5 million in funds donated to GiveDirectly till January 31, 2014 (with a limit of matching $100,000 per individual donor), suggesting that the actual amount needed from individual donors to achieve GiveWell's minimum target would be $250,000 (assuming no very large donors).[18] GiveWell wrote a blog post responding to the Good Ventures announcement, stating that they had recommended the grant but not the donation matching.[19]

Carl Shulman wrote on his personal blog that, judging from GiveWell's explanation for its 2013 end-of-year recommendations, the optimal course for donors may be to hold onto their money for giving in 2014 or 2015 rather than donate to GiveDirectly, despite its being the most highly recommended by GiveWell.[28] Shulman's reasoning was that the quality of top recommendations for GiveWell would probably be much higher in 2014 or 2015. He cited two main reasons: Against Malaria Foundation may be able to resume bednet distribution, and GiveWell Labs might be able to make recommendations by 2015.

May 2013 review update[edit]

In June 2013, GiveWell published an updated review of GiveDirectly (prepared based on GiveDirectly's status as of May 2013).[29] According to the update:

November 2012 review and recommendation[edit]

Staff from GiveWell (left), GiveDirectly (middle), and Good Ventures (right), on a field trip to one of the villages with recipients of GiveDirectly's cash transfer program in Kenya.

In November 2012, charity evaluator GiveWell published its latest official review of GiveDirectly.[30] Based on this review, GiveWell ranked GiveDirectly as its #2 recommended charity for 2012 end-of-year giving. GiveWell recommended a 7:2:1 split for donors between its top three charities (Against Malaria Foundation, GiveDirectly, and Schistosomiasis Control Initiative).[6][7] On November 26, 2013 (a year later), GiveWell removed Against Malaria Foundation from its list of top-rated charities due to room for more funding-related issues, and GiveDirectly thereby moved to the top spot for a few days,[31] before GiveWell updated its charity list for 2013 and stopped ranking charities.[8]

GiveWell staff member testing the m-Pesa system used by GiveDirectly for cash transfers to recipients by enrolling in m-Pesa at the shop of a local m-Pesa agent.

According to the review:

One way of putting the difference (which has been reflected in GiveDirectly's communications with us) is that government programs aim for "income transfers" (small supplements to income over many years) whereas GiveDirectly aims for "wealth transfers" (large, one-off transfers that hopefully give people more flexibility to make large purchases and investments).

Response to the GiveWell review[edit]

On December 28, 2012, the philanthropic foundation Good Ventures announced a grant of $500,000 to GiveDirectly, largely on the strength of GiveWell's recommendation (but based also on additional investigation). This was part of a collection of grants to GiveWell's top-rated charities. The top charity, Against Malaria Foundation, received $1.25 million, and the #3 charity, Schistosomiasis Control Initiative, received $250,000.[20]

Charity evaluator and effective giving advocate Giving What We Can published a blog post critiquing GiveWell's recommendation of GiveDirectly.[32] The blog post included both general concerns about the effectiveness of cash transfers compared to the best possible interventions, and specific concerns about the methodology of GiveWell's evaluation and recommendation of GiveDirectly.

Earlier reviews[edit]

In April 2012, GiveWell published its first official review of GiveDirectly.[33] Their overall conclusion regarding cost-effectiveness at the time was: "While we have not articulated the full case for this, our intuition is that our top-rated health charities accomplish more good per dollar spent.", clarifying that households experience a decreasing marginal value from a $1,000 loan from GiveDirectly as opposed to $10-$20 bednets.

In November 2011, GiveWell identified GiveDirectly as one of six "standout organizations" in its list of top ranked charities, below the top-rated organizations Against Malaria Foundation and Schistosomiasis Control Initiative and alongside Nyaya Health, Small Enterprise Foundation, Pratham, KIPP (Houston branch), and Innovations for Poverty Action.[34] GiveWell continued to stand by this label for GiveDirectly after publication of the official review in April 2012.

Previously, GiveWell had called GiveDirectly a "charity to watch" and called GiveDirectly's approach "one of the most intuitive ways of helping" in a July 2011 blog post.[35]

Media and blog coverage[edit]

Media coverage[edit]

GiveDirectly was featured in a story on National Public Radio in August 2011;[36] in an article by Dana Goldstein in The Atlantic in December 2012;[37] in a Forbes Magazine article by Kerry Dolan in May 2013;[38] and in a New York Times article in August 2013.[39]

GiveDirectly founder Paul Niehaus was interviewed for a story on cash transfers on BBC's NewsHour in January 2012[40] and there was a follow-up blog post by interviewer Duncan Green on his Oxfam blog.[41]

In 2013, Planet Money reporters David Kestenbaum and Jacob Goldstein went to Kenya to see GiveDirectly in action. Their findings and other critical commentary on GiveDirectly were featured in a segment of an episode of This American Life in August 2013.[42] A follow-up was published in October 2013.[43]

An article in The Economist on cash transfers in October 2013 discussed GiveDirectly's work in Kenya.[44] An article in Digital Journal published at the same time also reviewed GiveDirectly's work.[45]

In November 2013, a Freakonomics radio podcast between Stephen J. Dubner, Dean Karlan, and Richard Thaler about fighting poverty with evidence discussed GiveDirectly.[46]

Julia Kurnia, director of the direct person-to-person microfinance lending platform Zidisha wrote an op-ed in the Huffington Post in January 2014 criticizing GiveDirectly’s direct cash transfer approach on the grounds that it encourages a dependence mentality.[47]

In January 2014, an article in The Independent discussed GiveDirectly and what other charities thought of their cash transfer approach. The author concluded: "While Niehaus acknowledges cash transfers "won't change everything", he says he would like them to be seen as a "benchmark for development activity" everywhere. Let's hope that ambition is realised."[48]

In February 2014, Fast Company listed GiveDirectly as fourth on its list of the world's ten most innovative companies in finance, below Nice Systems, Square, and Bitcoin.[49]

On March 11, 2014, Kevin Starr and Laura Hattendorf of the Mulago Foundation wrote a lengthy article in the Stanford Social Innovation Review skeptical of GiveDirectly's accomplishment so far, saying that the evidence so far was underwhelming, though there might still be bigger gains a few years down the line. They contrasted GiveDirectly with other charities that they felt delivered more bang for the buck: VisionSpring, KickStart, and Proximity Designs.[50] Holden Karnofsky of GiveWell wrote a lengthy response countering that GiveDirectly's impact had been more rigorously established, and that Starr and Hattendorf were using flawed metrics to judge impact.[51] The GiveDirectly board independently published a response on the GiveDirectly blog.[52] Chris Blattman, an economist with experience in randomized controlled trials as well as knowledge of cash transfers, also responded to Starr and Hattendorf's post on SSIR.[53]

Blog coverage[edit]

GiveDirectly received positive mentions in a blog post by Alex Tabarrok for the Marginal Revolution economics blog[54] and in multiple blog posts by Matthew Yglesias for the Moneybox blog of Slate Magazine.[55][56]

It also received mentions in a blog post by Jacqueline Fuller for the Harvard Business Review blog,[57] in a blog post by Michael Clemens for the Center for Global Development,[58] in a blog post by Vishnu Sridharan for the New America Foundation,[59] and in a blog post by Brad Tuttle for the Moneyland blog of Time Magazine.[60]

In 2014, Nairobi-based journalist Jacob Kushner visited the GiveDirectly recipient villages and wrote up detailed notes of what he learned, summarized in a blog post on the GiveWell blog.[61][62]

References[edit]

  1. ^ "GiveDirectly". GiveDirectly. Retrieved 2012-11-30. 
  2. ^ "Contact". GiveDirectly. Retrieved 2012-11-30. 
  3. ^ a b c "GiveDirectly team page". 
  4. ^ "GiveDirectly Financials". Givedirectly.org. Retrieved 2011-12-01. 
  5. ^ "a personal message from Chris Hughes". GiveDirectly. Retrieved 2012-08-19. 
  6. ^ a b Karnofsky, Holden (November 26, 2012). "Our Top Charities for the 2012 Giving Season". GiveWell. Retrieved November 26, 2012. 
  7. ^ a b "Top charities - November 2012 archived version". GiveWell. November 2012. Retrieved December 1, 2013. 
  8. ^ a b c d Karnofsky, Holden (December 1, 2013). "GiveWell’s Top Charities for Giving Season 2013". GiveWell. Retrieved December 1, 2013. 
  9. ^ a b "Top charities". GiveWell. December 1, 2013. Retrieved December 1, 2013. 
  10. ^ a b c Mukhopadhyaya, Piali (2013-11-20). "GiveDirectly is in Uganda!". GiveDirectly (blog). Retrieved 2013-11-21. 
  11. ^ Hassenfeld, Elie (June 20, 2014). "Update on GiveDirectly". GiveWell. Retrieved June 21, 2014. 
  12. ^ Coleman, Isobel (June 20, 2014). "Segovia: A New Player in Cash Transfers". Development Channel blog, Council on Foreign Relations. Retrieved June 21, 2014. 
  13. ^ a b "GiveDirectly Update - August 2014". August 2014. Retrieved September 6, 2014. 
  14. ^ "How it works". GiveDirectly. Retrieved 2012-11-29. 
  15. ^ "Evidence page on GiveDirectly". GiveDirectly. Retrieved 2011-12-01. 
  16. ^ Kenya (2011-05-18). "Innovations for Poverty Action page on the project with GiveDirectly". Innovations for Poverty Action. Retrieved 2011-12-01. 
  17. ^ Haushofer, Jonathan; Shapiro, Jeremy (2013-10-24). "Policy Brief: Impacts of Unconditional Cash Transfers". Retrieved 2013-10-26. 
  18. ^ a b Tuna, Cari (December 3, 2013). "Our Giving Season Plans". Good Ventures. Retrieved December 3, 2013. 
  19. ^ a b c Karnofsky, Holden (December 3, 2013). "Good Ventures Matching Gift to GiveDirectly and Grants to Top Charities". GiveWell. Retrieved December 3, 2013. 
  20. ^ a b Tuna, Cari (December 28, 2012). "Year-End Grants to GiveWell's Top Charities". Good Ventures. Retrieved March 12, 2013. 
  21. ^ a b c "Give Directly blog". Give Directly. 
  22. ^ "Introducing Google's Global Impact Awards". Google. 2012-12-04. Retrieved 2012-12-04. 
  23. ^ Neumann, Amy (2012-12-04). "Global Impact Awards Give $23 Million to Charities to Spur Innovation, Help Girls and Minority Students". Huffington Post. Retrieved 2012-12-09. 
  24. ^ a b "Grants to "standout" charities". Good Ventures. August 6, 2013. Retrieved March 12, 2013. 
  25. ^ "GiveWell annual review for 2012: details on GiveWell’s money moved and web traffic". GiveWell. 2013-03-12. Retrieved 2013-04-17. 
  26. ^ "GiveDirectly Update - June 2014". June 2014. Retrieved September 6, 2014. 
  27. ^ a b "GiveDirectly (charity review)". GiveWell. November 2013. Retrieved December 1, 2013. 
  28. ^ Shulman, Carl (December 3, 2013). "Off-the-cuff thoughts on GiveWell's 2013 recommendations". Retrieved December 3, 2013. 
  29. ^ "GiveDirectly update - May 2013". GiveWell. June 2013. 
  30. ^ "GiveDirectly (official review)". GiveWell. Retrieved 2012-11-26. 
  31. ^ Karnofsky, Holden (November 26, 2013). "Change in Against Malaria Foundation recommendation status (room-for-more-funding-related)". GiveWell. Retrieved November 27, 2013. 
  32. ^ Crouch, Will (2012-11-30). "GiveWell's Recommendation of GiveDirectly". Giving What We Can. Retrieved 2012-12-09. 
  33. ^ "GiveDirectly (official review, April 2012)". GiveWell. Retrieved 2012-11-26. 
  34. ^ "Top charities -- November 2011". GiveWell. Retrieved 2012-11-30. 
  35. ^ Karnofsky, Holden (2011-07-21). "A charity to watch: GiveDirectly". GiveWell. Retrieved 2011-12-01. 
  36. ^ Goldstein, Jacob (2011-08-02). "A Charity That Just Gives Money To Poor People". Npr.org. Retrieved 2011-12-01. 
  37. ^ Goldstein, Dana (2012-12-21). "Can 4 Economists Build the Most Economically Efficient Charity Ever?". The Atlantic. Retrieved 2012-12-21. 
  38. ^ Dolan, Kerry (2013-05-28). "Why Facebook Cofounder Chris Hughes And Google Are Giving Cash Directly To The Poorest". Forbes Magazine. Retrieved 2013-05-30. 
  39. ^ Goldstein, Jacob (2013-08-13). "Is It Nuts to Give to the Poor Without Strings Attached?". New York Times. Retrieved 2013-08-13. 
  40. ^ "MP3 of interview of Paul Niehaus on cash transfers". Oxfam blogs. 
  41. ^ Green, Duncan (2012-01-04). "Why don’t we just send aid money directly to poor people’s cellphones?". From Poverty to Power (Oxfam Blogs Network). Retrieved 2012-11-30. 
  42. ^ "503: I Was Just Trying To Help". This American Life. 2013-08-16. Retrieved 2013-08-19. 
  43. ^ Kestenbaum, David (2013-10-25). "What Happens When You Just Give Money To Poor People?". National Public Radio. Retrieved 2013-10-26. 
  44. ^ "Pennies from heaven: Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty". The Economist. 2013-10-26. Retrieved 2013-10-26. 
  45. ^ Houser, Nancy (2013-10-25). "GiveDirectly charity provides free cash to extreme poor in Kenya". Digital Journal. Retrieved 2013-10-26. 
  46. ^ Lechtenberg, Suzie (November 27, 2013). "Fighting Poverty With Actual Evidence: A New Freakonomics Radio Podcast". Freakonomics. Retrieved December 1, 2013. 
  47. ^ Kurnia, Julia (January 18, 2014). "About to send a donation? Think twice.". Huffington Post. 
  48. ^ Morrison, Sarah (January 23, 2014). "Direct debit: The charity GiveDirectly donates cash straight to people in need". The Independent. Retrieved March 30, 2014. 
  49. ^ Miller, Nancy L. (February 10, 2014). "The World's Top 10 Most Innovative Companies in Finance. You'd think something as universal as money would be hassle-free to use. But with banks and card networks acting as invisible middlemen and imposing sizable exchange fees, some companies are creating radical new approaches to move cash from one place to another.". Fast Company. Retrieved March 30, 2014. 
  50. ^ Starr, Kevin; Hattendorf, Laura (March 11, 2014). "GiveDirectly? Not So Fast. We are mistaking an important experiment for a proven solution.". Stanford Social Innovation Review. Retrieved March 11, 2014. 
  51. ^ Karnofsky, Holden (March 20, 2014). "Big Impact vs. Big Promises". Stanford Social Innovation Review. Retrieved March 21, 2014. 
  52. ^ "What's the hype evidence?". GiveDirectly (blog). March 17, 2014. Retrieved March 26, 2014. 
  53. ^ Blattman, Chris (March 14, 2014). "Are Cash Transfers Overrated?". Stanford Social Innovation Review. Retrieved March 30, 2014. 
  54. ^ Tabarrok, Alex (2011-07-22). "Give Directly". Marginal Revolution (blog). Retrieved 2011-12-01. 
  55. ^ Yglesias, Matthew (2012-12-25). "Fighting Poverty By Giving Poor People Money". Slate Magazine (Moneybox blog). Retrieved 2013-04-17. 
  56. ^ Yglesias, Matthew (2013-05-29). "The Best and Simplest Way to Fight Global Poverty: Proof that giving cash to poor people, no strings attached, is an amazingly powerful tool for boosting incomes and promoting development.". Slate Magazine (Moneybox blog). Retrieved 2013-11-21. 
  57. ^ Fuller, Jacqueline (2013-03-28). "Want to Help People? Just Give Them Money". Harvard Business Review. Retrieved 2013-04-17. 
  58. ^ Clemens, Michael (2011-09-30). "A New Kind of Overseas Charity Is Born". Global Development: Views from the Center. Retrieved 2011-12-01. 
  59. ^ Sridharan, Vishnu (2012-01-12). "From your pocket to theirs: a new approach to charity". New America Foundation. 
  60. ^ Tuttle, Brad (2011-08-03). "GiveDirectly: A Charity That Just Gives Money to Poor People, So They’re Not So Poor". Moneyland, Time Magazine. Retrieved 2011-12-01. 
  61. ^ Kushner, Jacob. "Transcript: interviews from Siaya site visits". Retrieved June 3, 2014. 
  62. ^ Kushner, Jacob (May 28, 2014). "A journalist visits GiveDirectly villages in Kenya". GiveWell. Retrieved June 3, 2014. 

External links[edit]