In Which I Advertise for GiveDirectly

This is the fifth of six posts I’m writing for Effective Altruism Week.

There are a lot of options when it comes to charity, even if you’re only considering the ones that are plausible candidates for the most good you can do.

But if you’re looking for a charity to donate to—maybe for tax reasons, maybe because your group won a dollar auction like happens at my university and you have to decide which charity to donate the proceeds to, maybe for some other reason—and you want a single recommendation whose appeal is easy to explain and that isn’t going to change in the foreseeable future, then the winner is GiveDirectly.

Of course, that’s quite a claim, and to some extent it’s just my arbitrary and biased opinion. But in this post, I hope to convince you that it’s the right answer.

GiveDirectly’s model is unconditional cash transfers. In other words, they find the world’s poorest people and give them money.

That’s it. That’s the whole process.

Well, okay, I can elaborate a little. GiveDirectly currently operates in two countries, Kenya and Uganda. In those countries, they go visit rural villages and then find the poorest people living in those villages. (How do they know who’s poorest? The poorest people live in houses with thatched roofs, because they can’t afford metal ones.) They sign those people up for accounts with M-PESA, a Kenyan mobile-phone-based payment system (yes, Kenya has its own electronic payment system and everybody there uses it; they use different systems in Uganda). They then transfer the money to them (about $1,000 per person over the course of a year) and give them instructions on how to withdraw it from a money agent. The whole time, GiveDirectly’s field agents are going around checking that everything’s going smoothly and collecting data on recipients’ experiences and how they’re using the money. The overall overhead ratio is less than 10%, meaning that over 90 cents of every dollar donated to GiveDirectly ends up in the pocket of a recipient.

These cash transfers are unconditional, meaning that recipients don’t have to do anything other than be poor in order to be eligible for them. Some programs in other countries (often government-sponsored ones) have experimented with conditional cash transfers, meaning that recipients have to do something like make sure their kids are attending school or get them vaccinated in order to get the money. These can be a useful incentive for behavior modification, but studies suggest that unconditional cash transfers work best for increasing recipients’ overall welfare as much as possible.

Why are cash transfers such a great idea? Because different people need different things. Many recipients use their cash transfers to buy metal roofs, which don’t leak all the time like thatched ones do, and also are cheaper to own in the long run because you don’t have be constantly repairing them. Many use them to address immediate needs such as food or medical expenses. Some use them for startup costs in some business venture, like buying a motorcycle and using it to sell transportation services to neighbors, or buying a power saw and using it to cut trees and make charcoal. There are a lot of other potential uses besides; with cash, recipients can determine for themselves what they need most and then spend it on that, obviating the need for outsiders to try to do so (and probably get it wrong). Evidence suggests that cash transfers usually aren’t spent on things like alcohol or tobacco.

Based on this logic, you could reasonably conclude that cash transfers don’t need to meet the same burden of scientific proof as other interventions. But GiveDirectly apparently didn’t get that memo, because the quality of their science is second to none. They extensively survey recipients (sometimes to the point of measuring things like cortisol levels) in order to ensure that their cash transfers are having the best possible effect. They also conduct randomized controlled trials—the gold standard of science—in order to learn more about the effects of cash transfers. In fact, their last large experiment was preregistered, meaning that the results would be published whether they were good or bad—a standard which is rarely met in any field, let alone one where scientific rigor is as often neglected as in charity.

Not only is GiveDirectly one of the most scientifically-minded global poverty charities out there, but they’re also one of the most transparent. I don’t just mean publishing a lot of metrics (although they do publish a lot of metrics, and that’s very important and by itself brings them far above what most of their peers are doing). I mean things like this bit from one of their blog posts:

We believe that stories and qualitative information can be informative and powerful, but their value depends on the manner in which they’re shared. When individual stories are shared without sufficient context into how they were chosen or how they compare to the average, they can create a misleading picture of how the organization uses donors’ dollars and the impact they ultimately have. This would be unfortunate for individual donors—and could be dangerous for policymakers and institutional funders, who fund and influence programs at massive scale. If we shared our favorite stories without any context, you might think, for example, that the woman who was able to afford eye surgery and see for the first time in two decades is representative of the average recipient.

Their solution? Pick recipients literally at random and publish stories about them.

If you’re not familiar with how most charities communicate with the public, you might not realize just how unusual this is. It is really, really unusual. Fanatical, even. Nobody does this. It goes against all the conventional wisdom about how to present yourself and what you’re doing in the charitable sector.

Considering how much money the conventional wisdom ends up sending to programs that don’t actually work, I’d say it’s long past time to try something different. And an increasing number of donors seem to agree, since GiveDirectly raised over $17 million last year.

Finally, there’s one other factor that I think makes GiveDirectly the best choice: the possibility for them to bring about systemic change.

GiveDirectly has successfully transformed cash transfers from a crazy idea into an intervention taken seriously by experts, and produced high-quality research to back it up. If they continue growing, and unconditional cash transfers continue to gain acceptance, then there’s hope that cash transfers come to be seen as the baseline benchmark which other global poverty interventions are compared against. If that comes to pass, then when, say, the U.S. government is considering funding some foreign-aid intervention, they might ask: Why do you think that this is a better idea than simply taking however much money this will cost and giving it directly to poor people?

There are a few programs out there that might be able to meet that bar. But most of them can’t. We’d end up spending charity and foreign-aid dollars a lot more efficiently—and that means saving and improving a lot more lives.

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