GiveDirectly is a New York-based non profit that distributes cash to poor people with no strings attached. Unlike most philanthropies especially venture philanthropies, that place requirements for their “investments”, GiveDirectly has a straightforward approach to helping the world’s poorest people: just give them cash.  It has distributed about $1,000—roughly a year’s income—to thousands of ultra-poor households in Kenya and Uganda. Recipients don’t need to pay back the money, and they can spend it however they wish. 

This might seem like a radical idea, but it’s not. Cash transfers have quietly become one of the most widely researched and consistently effective anti-poverty strategies in the developing world.  As reported in The Huffington Post:

“Launched in 2011, GiveDirectly is the only nonprofit focused exclusively on cash transfers. They use an innovative strategy to distribute money, leveraging mobile banking technology whose popularity has exploded in Africa. Distributing cash electronically to poor rural villages not only slashes costs but eliminates several prime opportunities for corruption (i.e., fewer middlemen to siphon off funds or ask for bribes).

GiveDirectly’s founders have also championed transparency and data-driven decision making to an extent rarely seen in the nonprofit world. The group’s key performance metrics are streamed in realtime on its website. And they’ve subjected their own programs to randomized controlled trials, the same rigorous types of studies that pharmaceutical companies use to evaluate drugs. This is an exceedingly rare practice for charities—the tests are expensive, difficult and time-consuming. But they produce the best evidence showing whether a program is actually working.

Investigators who studied GiveDirectly’s work found that, one year after the transfers, cash recipients had increased their earnings by 34 percent and their assets by 52 percent compared to people who didn’t receive transfers. Among cash recipients, the number of people who reported going to bed hungry dropped by 36 percent, and the number of days children went without food fell by 42 percent. People who got cash tended to invest in their homes, their livelihoods, and their savings. There was no increase in alcohol and tobacco spending.”

GiveDirectly’s work is receiving a major boost from Facebook co-founder Dustin Moskovitz and his wife Cari Tuna, who announced a $25 million donation through their foundation Good Ventures. The gift is greater than GiveDirectly’s entire 2014 budget.

“Governments and donors spend tens of billions of dollars a year on reducing poverty,” Tuna said in a statement, “but the people who are meant to benefit from that money rarely get a say in how it’s spent. GiveDirectly is changing that.”

Moskovitz and Tuna, both in their early 30s, are among the youngest billionaires to pledge the bulk of their fortune to charity. They’ve taken a unique approach to philanthropy. Their goal isn’t just to do good, but to do the most good possible. As they put it, “How can we help as many people as possible as much as possible with the resources we have?”

That goal led them to support exhaustive research to determine which organizations working in poor countries are most effective and cost-efficient. That research, in turn, led them to GiveDirectly.”

We need more of America’s billionaires donating to causes like GiveDirectly!

Tony