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Google supports giving cash directly to world’s poorest

Google supports giving cash directly to world’s poorest

Here’s an interesting idea. Instead of sending donations to agencies and foreign governments in hopes they will direct it to those in need, why not send cash directly to poor families overseas, via their cellphones? From Forbes.com:

GiveDirectly, a U.S.-based nonprofit operating in Kenya, is doing just that, and it’s won the support of the likes of Facebook cofounder Chris Hughes and Google. Last Thursday night in San Francisco, Hughes and a posse of venture capitalists and tech entrepreneurs including General Catalyst partner Hemant Taneja and Dropbox CEO Drew Houston, hosted about 150 people for wine, conversation and an introduction to GiveDirectly. …

Paul Niehaus, an assistant professor of economics at UC San Diego and a board member of GiveDirect, came up with the idea of transferring money to poor people’s cell phones back in 2008. … GiveDirectly finds poor households – typically people who live in mud huts with thatched roofs – and uses a system called M-Pesa, run by Vodafone , to transfer money to their cell phones. Transaction fees eat up a mere 3 cents per donated dollar. Niehaus says plenty of recipients use the money to upgrade their homes by adding a metal roof.

The project has won a $2.4 million Global Impact Award from Google. I love this idea, though I feel a need to reconcile my enthusiasm for this with my reticence to give cash directly to the homeless panhandlers I meet in our churchyard every day here at home. What do you think?

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Adam Spencer

I imagine that what's being called "giving with strings attached" has a lot to do with wanting one's contributions to "make a difference", to have real effect, to change something for the better rather than feeding an addiction etc. I don't think that's necessarily a bad thing to want. Intriguing stuff in the linked article though.

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Paul Woodrum

It goes without saying that money should only be given to the deserving poor, not the undeserving poor like Mr. Dolittle who might spend it on strong drink. Now where was it that Jesus said our charity should always have strings attached? Or was that Paul?

I recall a delightful rector of my home parish who, when asked by one of the town's down-and-out for money for a beer, was so impressed by the chap's honesty and directness, he took him to the nearest bar and had one with him.

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John B. Chilton

The economist who devised the program is quoted, “A typical poor person is poor not because he is irresponsible, but because he was born in Africa.”

Our concern about giving to the poor with no strings has to do with our, let name it, fear that our gift will be spent irresponsibly or at best unwisely. Are we thinking the poor among are poor because they irresponsible and not because they weren't born with the same opportunities of access to social networks and the like that we were?

It was the economist Milton Friedman who devised the negative income tax which is as close to a pure money transfer as we have at the federal government level. Food stamps and public housing are strings attached programs. Housing vouchers, which do much to remedy the evils of warehousing the poor is also an invention of economists. Remember the shame of FEMA trailers in New Orleans or housing victims in hotels? The economist Ed Olsen argued strenuously that better solution was an expansion of the housing voucher program, but was ignored. Meanwhile there was slack in housing markets in other parts of the country that could have easily absorbed these families.

Apart from government there are private donors, foundations, and churches who should be asking themselves the question: why am I giving with strings attached, why do I have to have a say in how my gift is spent? Question your motives.

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Eleanor Braun

There was an article in Slate just yesterday about a program in Uganda to give money directly to the poor. It was a controlled experiment and tracked long term effect. Turned out the recipients (young men ages 18-34)did significantly better over a four year period than the control group, who were not given funds. http://slate.me/11yXkw5

But I'm not sure the same approach would apply to panhandlers, who may have other issues.

Eleanor Braun

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