/ Par / by Stefan Shaw

Why we give directly to GiveDirectly

When we decided to expand our reach beyond Germany and Austria into developing countries, we had two criteria that drove our thinking:

First, we wanted to make sure we did something that was efficient and effective, as proven by reliable evidence.

Being efficient meant we were not interested in setting up shop in other countries, let alone continents, and thus using up resources to maintain locations and staff rather than channeling those resources directly to partners who are already running projects we like. Being effective meant we wanted a project that would achieve the best possible impact for as many people as possible. That means achieving low cost delivery and high impact results on the recipient’s end as proven by randomized controlled trials (RCTs), which are the gold standard for measuring a program. 

Second, we wanted to donate to a project with the potential to improve the future of aid overall beyond simply the good we hope to do for direct recipients. 

We wanted to cast a vote in the direction of systemic change towards a world in which all giving – in charity and development aid – is based on the best evidence of where one dollar can do the most good.

Of course, there were other important things which informed our choice of project as well: A project needs to contribute to our overall objective "to connect the disconnected" with an emphasis on children, youth, and families; we like a project when we see its potential to scale – truly scale as in 100-fold or 1,000-fold; and we hoped to find a project that also would help the world learn more about the best ways to design aid.

Well, to make a long story short: We found what we were looking for. It’s GiveDirectly. GiveDirectly (GD) gives money to the poor. To the extreme poor. Extremely directly. GD has developed a powerful process to channel money directly to the poorest of the poor with a total cost of delivery of 9%. Don’t confuse this with overhead costs. The entire operation – all staff and resources included – takes up just 9% of the money that GD raises to deliver their services. This is a spectacular figure by any standard.

We visited them both in their office in New York as well as on the ground in Uganda in East Africa and were impressed by the transparency and scientific rigor with which they do what they do. In that same spirit of transparency, they recently posted interviews with an entire village where they gave cash to some residents but not others, so you can get a sense of reactions that aren't curated to cherry pick donor-friendly responses.* When we visited GD on the ground they had even randomized the recipients we were to meet to make absolutely sure we get a true picture of their field work.

We also like that the model doesn't presume that we, as donors, know what it's like to live on less than a dollar a day or what such a person might need. The cash transfers are unconditional. The model trusts recipients to choose what priorities are most important to them, and the evidence is that the results of those choices are impressive. 

But beyond just helping recipient families, GiveDirectly aims to use cash as a benchmark for measuring the effectiveness of all aid – it's a game-changing concept that suggests private and government donors alike should always ask: "Can we prove that we are doing more good with a dollar than the poor could do for themselves?" It's this game-changing potential for the future of international aid that we're particularly proud to endorse with our donation.

Of course we aren’t the only ones who have discovered GD. The charity evaluator GiveWell is hailing GiveDirectly as “the most outstanding organization that we have come into contact with over the years…” Will MacAskill, author of the book Doing Good Better, summarizes that “all other development programs should be assessed using GiveDirectly as the yardstick.” We agree. Check them out at: www.givedirectly.org.

Project update (October 2016):

We are funding GiveDirectly to run an unconditional cash transfer program in the Iganga district of Uganda, where the vast majority of households are subsistence farmers. Coffee is one of the main cash crops in the area and a primary source of income for a number of these farmers.

Between October 2016 and February 2017 GiveDirectly will distribute 3,400,000 Ugandan Shillings (~1,000 USD) per household to 3,400 households. The first set of ~1,400 households just received their initial payment of 400,000 Ugandan Shillings (~118 USD) earlier this month.

As part of this project, a randomized controlled trial will seek to add to the growing evidence base showing the positive impacts of cash transfers by evaluating the impact of the cash transfers on these smallholder farming communities.

*June 21, 2018: Unfortunately, these interviews are no longer available on the GD-website.