The Problem Traditional methods of international giving are complex--and often inefficient. Often, donors give money to a charity, which passes along the funds to partners at the local level. This makes it difficult for donors to determine how their money will be used and whether it will reach its intended recipients.
The Solution Unconditional Cash Transfers. Most poverty relief initiatives require complicated infrastructure, and alleviate the symptoms of poverty rather than striking at the source. By contrast, unconditional cash transfers are straightforward, providing funds to some of the poorest people in the world so that they can buy essentials and set themselves up for the future. Numerous studies have shown that this approach changes lives for the better.
Why GiveDirectly is different from other charities GiveDirectly seeks to change the questions donors ask about international giving, and the way they think about effective charity. The non-profit uses a rigorous, data-driven model to identify potential cash transfer recipients and monitor the outcome of the transfer. GiveDirectly oversees the entire transfer process from end-to-end--without a middleman or partner charity--and uses cell phone technology for monitoring and payment. Cash transfers are relatively well-studied and the research is uniformly positive. Several studies have found that cash transfers improve child health and schooling, while savings and investment rates are typically high. Targeting the extreme poor—recipients living on $0.65 a day on average—means that GiveDirectly can dramatically affect livelihood. The organization is committed to transparently tracking and improving their effectiveness through randomized controlled trials of their work (the “gold standard” in social sciences research). The team has strong experience in international development, economics, policy analysis and program evaluation, in both the non-profit and for-profit sectors. GiveDirectly’s model is also built to be scalable if funds are available.
How will recipients use my donation? Recipients are free to use the funds as they see best fitting for their families' needs. Many purchase livestock or iron roofs for their homes, or use the money to pay for food, health care, their children's education, or to start small businesses.
Will my donation be misused to buy alcohol, tobacco, or other “temptation goods”? While some donors believe that the poor systematically abuse cash transfers, studies show that this is not the case. Most studies find either no increase in spending on “temptation goods” or at most an increase proportional to the increase in other household spending. Moreover, studies have demonstrated the cash transfers do not decrease the number of hours recipients work--and often have the effect of increasing productive work hours.
What about corruption? GiveDirectly has rigorous auditing processes, which have uncovered ineligible households in 3 percent of cases and bribe requests in 0 percent of cases.
Don't recipients’ neighbors get jealous? When asked, only 5 percent of recipient households reported arguments within their communities, and only 1 percent reported violence or crime as a result of the transfers.
Why doesn't GiveDirectly make micro-loans or make transfers conditional? The evidence for the positive impact of cash transfers is far stronger than the evidence for micro-loans, which have to be paid back. If conditions are imposed on transfers, then compliance has to be monitored, greatly increasing the costs of the program.
Is my donation tax-deductible? GiveDirectly has 501(c)(3) status in the United States. UK donors can make tax-deductible donations via the Giving What We Can Trust, which are eligible for Gift Aid. Canadian donors giving over $5,000 can make tax-deductible donations via GiveWell, subject to a 10 percent deduction for costs incurred by Tides Canada. Australian donors can make tax-deductible donations via Effective Altruism Australia.