INTERVIEW: GiveDirectly co-founder, on what its $25M grant will mean for cash transfers to the poor

Monday, August 10, 2015

Last week, Good Ventures announced a $25 million grant to GiveDirectly, a nonprofit organization that gives cash directly to the poor via mobile transfers.

The organization, which works in Kenya and Uganda, has emerged as a favorite of the foundation, led by Facebook co-founder Dustin Moskovitz and his wife, Cari Tuna. Good Ventures has previously awarded $12.6 million to GiveDirectly, which GiveWell recommends as one of its top charities.

GiveDirectly explains on its website that it is backed by GiveWell, and “most importantly” rigorous evidence. That emphasis on data, with randomized control trials to assess the impact of these cash transfers, is part of what led to this investment by Good Ventures.

“GiveDirectly wants to continue studying how to deliver cash transfers most effectively and how they impact the lives of individuals, families and communities,” Tuna wrote. “That means donations to GiveDirectly not only help extremely poor people in the short term, they also help improve its model for the future.”

GiveDirectly co-founders Paul Niehaus and Michael Faye developed the idea for GiveDirectly while at Harvard University pursuing doctorates in economics. Their work with last-mile financial services connected them with some of the poorest people on the planet, and there was mounting evidence that cash transfers were an effective way to lift them out of poverty.

Despite the evidence supporting the effectiveness of cash transfers, cash-based assistance is often subjected to greater scrutiny than in-kind aid. We take a closer look at how the two, which are often pitted against each other, can work together.

“We couldn’t find an organization that would allow us as individual donors to put money directly in the hands of the poor, so we created one,” Niehaus said. “It can be tough as an outsider to pick out the high return investments, and what cash transfers do is let poor people do that for themselves.”

Devex spoke with Niehaus about how GiveDirectly hopes to improve individual lives and reshape international giving. Here is an excerpt from the conversation.

Source: Devex (link opens in a new window)

Impact Assessment
cash transfers, poverty alleviation