|Cash transfer recipients gathered for a village meeting with GiveDirectly staff in Kawo village, Uganda.|
From the beginning, our goal at GiveDirectly has been to build an efficient and scalable platform to deliver cash transfers to poor people around the world. After months of planning and execution, we are very happy to announce that we now have a program up and running in a second country: Uganda! While we considered a number of countries for expansion, our decision came down to Uganda’s strong mobile banking sector and large population of people living on less than $1/ day, as well as the regional expertise we had developed in East Africa.
With support from a Google Global Impact Award, we successfully identified and enrolled nearly 1,000 extremely poor households in the Eastern Region and are in the process of delivering $1 million in direct transfers using two electronic payments providers: Ezee Money and MTN Mobile Money. Expansion into Uganda represents an exciting and critical step in our trajectory as an organization. And as the team member who was most directly involved in establishing this new program, I was thrilled to see the robustness and scalability of our model validated first-hand.
While cash transfers are simple conceptually, building a successful program involves a great deal of complexity, problem-solving, and attention to detail. When I arrived in March, I quickly learned that despite its proximity to Kenya, Uganda would present us with many new implementation challenges. We had to learn a great deal about the environment and make a number of critical decisions: Which region, district, and villages should we start working in? How do we design the interface with a new mobile money platform? How are households and communities structured and how does that affect our targeting? How do we build our field team? Here are a few of the specific challenges we overcame:
- Because government is more decentralized in Uganda, we had to invest a significant amount of time up-front in meeting officials at many levels to secure permission and buy-in
- In the extremely rural areas where we chose to work, few households possessed government IDs (required to register for mobile money) so we had to find creative ways to expedite ID procurement
- We faced a new set of last-mile payment challenges because mobile money agents in rural areas have less capacity overall than in Kenya; we had to work closely with our partners to provide customized and high-quality registration and payment services to our recipients
- A large variety of languages are spoken in Uganda; when recruiting local staff, we had to find well-qualified candidates who spoke both English and a fairly uncommon local language, Ateso
While we had to customize our platform in various ways, the core components of our approach translated extremely well to the new setting: a multi-layered, technology-driven system of checks and audits to ensure the integrity of our processes; a focus on transparent and respectful communication with recipients and communities about our program; and a commitment to building an exemplary team of local staff to man the front line.
Perhaps most compelling for me was seeing a similar evolution of thinking among our staff and recipients as I had previously seen in Kenya: from initial skepticism about both the validity of the approach and our ability to deliver on our commitments, to tremendous excitement when cash actually reached the hands of the poor and began to have a transformative impact on households. Take a look at the video clips at the end of this post that show two of our Field Officers discussing their initial reservations and why their thinking changed.
Bringing GiveDirectly to Uganda has been a deeply rewarding experience for our team, and we look forward to applying the lessons we learned in Uganda to future expansion in East Africa and elsewhere. I look forward to sharing more about our program and recipients in Uganda in the coming months.
"The first time I heard about GiveDirectly, I couldn't believe [an NGO could] just come in and give free money...and I thought people were going to waste it...." in this video, GiveDirectly Uganda field officers Rosemary Apolot and Charles Omoding share their initial skepticism about giving cash to the poor, and explain how their experiences with GiveDirectly recipients changed their thinking.
|A motorcycle is one asset that can continue to generate income for years after the initial purchase.|
GiveDirectly’s work has always been guided by scientific evidence. When we began sending unconditional cash transfers to Kenyan villagers a few years ago, we had every reason to believe that the money would change recipients’ lives for the better. Studies going back for years have linked cash transfers to positive impacts ranging from nutrition to household income to teen pregnancy rates.
However, until recently, all of the evidence to support our work came from studies of other programs--not our own. As a young organization with an innovative model, we could not be absolutely certain that our programs would perform as well as other cash transfer programs have in the past.
I’m happy to say that we now have the published results of a rigorous randomized control trial (RCT) on our own work. The study, conducted by independent researchers from Innovations for Poverty Action, gives us a clear picture of the impact that GiveDirectly is having in Kenya. The data offers a wealth of new insights into how recipients used their transfers and how it has changed their lives.
Some background on the design of the study: over the course of a year, the IPA research team conducted personal interviews with extremely poor residents of several villages, gathering information on their financial, physical, and emotional well-being. To understand the baseline conditions among our target population, the researchers collected data from control villages where GiveDirectly was not operating along with treatment villages where eligible residents received cash transfers. Within treatment villages, the researchers gathered data both from households that received cash and those that did not. This was done in order to capture any spillover impacts--good or bad--that might be linked to GiveDirectly’s presence in a village. There isn’t room to discuss all of the data in a single blog post, so I will share two results that really stood out for me. These findings offer encouraging answers to some of the most common questions we hear about what we do:
- Does a one-time transfer generate long-term impact? When we finally got to see the results of the RCT, I was struck by this encouraging piece of data: GiveDirectly’s cash transfers “increase investment in and revenue from livestock and small businesses. Revenue from animal husbandry increases...and total revenue from self-employment increases ...as a result of the transfers”. That represents a meaningful improvement in a family’s economic circumstances.I have tried to imagine a livestock or small business investment that would generate revenue after a year, then cease to do so – but find it unlikely. Considering other long-term studies have found income gains 4-5 years out, it is likely that many of these households will sustain the gains of the past year. While our study followed recipients for just one year, this finding strongly suggests that for many recipients, a one-time transfer can bring about lasting gains in household income..
- Will cash transfers generate conflict within households or communities? Our team has shared this concern from the outset. This is why I was amazed and encouraged by the finding of “suggestive evidence that cash transfers reduce domestic violence and increase female empowerment in both recipient households and other households in the same village [italics added]”. This means that in villages where some families received cash, the incidence of household conflicts was lower overall than in villages where GiveDirectly was not operating. This reduction in conflict was measurable even in households that did not directly receive cash; apparently--and contrary to our worst fears--there is a positive spillover effect on the community overall when some of its poorest families receive a cash windfall. Instead of causing conflict, cash may actually reduce it. Amazing.
These are two of my favorite findings from IPA’s RCT on our work. There are many more to share and discuss going forward, including the impact of cash on happiness and hunger, and a comparison between how men and women use their cash--that one may surprise you! We look forward to an in-depth conversation of the data and evidence that are helping to guide our efforts to channel resources to some of the world’s poorest households.
Technology is at the heart of what we do. We've built a secure, scalable and efficient platform that we'll use to deliver cash transfers to thousands of poor households this year, and now we're planning the next generation technology that will let us scale this platform up to serve millions of the world's poor across multiple countries. We're looking for an exceptionally talented individual to join our leadership team and spearhead this effort. If that sounds interesting, read on:
Chief Technology Officer: You are an exceptional leader who will (i) help craft our technology strategy, including development of real-time monitoring platform, mobile apps, remote sensing systems, and integration with payment providers, and (ii) manage a small team in executing this strategy, assisting in execution where needed. Given GiveDirectly’s rapid growth, your role will be fast-evolving and offer substantial opportunity to assume a diverse range of responsibilities. Ultimately, your task will be to develop the most sophisticated and transparent anti-corruption platform for distributing cash transfers. You have a distinctive track record of defining a technology strategy (i.e., anticipating and articulating an organization’s needs) and managing a team of engineers in a fast-paced environment to achieve it. You also have a top tier academic background and share our passion for the values and mission of GiveDirectly. If you fit this bill, we hope to hear from you at jobs[at]givedirectly.org with a CV and <200 word cover note.
|Evidence suggests that cash can improve the lives of young women; we are conducting a small randomized controlled trial to find out whether it can also help them to finish secondary school.|
GiveDirectly locates recipients in remote, rural areas and securely delivers life-changing amounts of cash directly into their cell phone accounts. Over 97% of our recipients report having received their funds without incident – a testament to the robustness of our systems. However, we have a lot to learn from that rare 3% of cases where something does go wrong. One such case is that of Christine (not her real name), whose cash transfer experience caused us to rethink and improve our follow-up process.
Christine lives with her husband and child in a village in rural Kenya. She is one of a cohort of 18-and 19-year-old women who receive monthly cash transfers from GiveDirectly, as part of a special program for young women that is funded by a private foundation. A large body of evidence suggests that cash can improve the lives of young women in her demographic; we are conducting a small randomized controlled trial to find out whether the transfers can also help these women to finish secondary school.
As is our normal practice, GiveDirectly’s field staff had met with Christine at her home, provided her with a cell phone SIM card and explained to her that she would be receiving monthly transfers through her phone account to spend on whatever she chose. The GiveDirectly hotline number was programmed into her phone, and our staff told her that she could call us if she needed any help or if anything had gone wrong with her cash transfers.
As usual, GiveDirectly’s field staff called Christine’s cell phone after each transfer to verify that she had received it. During the phone interviews, our staff noticed that though Christine said she was well and had received her money, she needed a lot of help from her husband to answer questions; they suspected that Christine might suffer from mental illness. It was only during an in-person visit to her home, when independent researchers conducting a study on the program spoke to Christine separately from her husband, that her real situation was discovered.
Christine ’s husband had taken her phone and was withdrawing her cash transfers for his own use. Christine didn’t feel that she could call the hotline, and her husband was having another woman pose as Christine during our monthly follow-up calls. By talking to other people in the village, our staff later learned that her husband was known to be violent and frequently drunk.
We were faced with a difficult situation, and Christine’s safety was our first concern. Alcoholism and domestic bullying exist in all cultures and in all economic classes; although our cash transfers did not seem to be the cause of these problems in Christine ’s household, we wanted to be sure that we were not making things worse for her. At the same time, we did not want to cut off financial support to a young woman simply because she had been a victim of theft.
Our first step was find a way to contact Christine under conditions that would be safe for her. Our Senior Field Officer, Mike, arranged for Christine ’s sister to meet discreetly with her, and the two women called Mike when they were together. This allowed us to verify that we were speaking to the real Christine. She confirmed that her husband had stolen her money, and asked us to stop the transfers. She did not want to leave her husband and child, but she requested that we help her set up a new phone line so that she could receive cash without her husband’s knowledge. Since that time, we have confirmed that she has been receiving her transfers securely, and Mike continues to follow up with her each month with the help of her sister. Christine reports that the household has been peaceful since the change, and that she and her child are both safe and well.
We have not yet received final published results from the recent independent study on our cash transfer program in Kenya, but preliminary feedback from the researchers suggests that incidents of domestic violence by men against women decreased significantly in households that received cash transfers, and the reduction in violence was larger when the woman received the transfer. While cash transfers have been linked to reduced domestic violence for a majority of couples, Christine’s story is a reminder that each situation is unique, and we must be vigilant and prepared to respond to our recipients’ individual needs, should a problem arise. This is a special challenge in households where conflict already exists. We are glad to have resolved Christine ’s case without having to end her transfers; she chose to continue receiving transfers and now has money to buy things that may help her to improve life for herself and her family.
To better detect and prevent cases like Christine’s in the future, we now conduct in-person follow up visits for a randomly selected 10% of households. We are also implementing more rigorous protocols for staff to monitor and investigate suspicious cases--these are flagged for a follow-up phone call or in-person visit from an experienced Senior Field Officer. These precautions represent a cost increase—although we will still meet our efficiency target, which, for Kenya, is to keep delivery costs below 10% of each donor dollar received. We believe these extra measures are well worth the cost, because they enable us to protect our recipients and to fulfill our obligation to our donors more effectively.
GiveDirectly has received some media attention lately. We’re thankful for it, as it allows us to share our work and ideas with more people who might want to help. NPR’s in-depth profile on our work in Kenya reached a broad audience and sparked further discussion in other outlets and the blogosphere. While it’s exciting to see our message spread, I want to take a moment to put it in perspective by sharing how our team thinks about media.
We are happy that coverage of GiveDirectly has brought at least two important ideas into the public conversation about giving. One is the growing role of evidence and data in decision making in philanthropy. It’s encouraging to see tools like randomized controlled trials discussed on mainstream outlets like The New York Times and MSNBC, not just in economics journals. Another is the concept of cash transfers as a benchmark for other interventions. We firmly believe cash is not a panacea for poverty, but do think it is worth measuring the returns a family can create for itself if simply given the money it would have cost to deliver another intervention.
Mainstream press provides a good forum to discuss some issues. It isn’t as well suited to others. There are many topics that should be part of a balanced, nuanced discussion on the role of cash but won’t create headlines or drive page-views. First, execution of a cash transfer program is a lot harder than it seems. We spend a lot of our time solving problems like – to draw on recent examples – a dishonest staff member who tried to intimidate recipients and a recipient whose husband stole her transfer (which will be the subject of a later post) — and how to mitigate them at scale. Second, there are open questions about how to maximize the impact of our work. Though the existing literature is extensive it doesn’t conclusively answer all of the questions we ask ourselves. For example, do simple “nudges” influence recipient spending towards higher return or longer term investments? What is the long-term impact of our transfers on household poverty? What are the impacts on village-level economies? Our goal is to build an organization that can address these operational and research challenges – and is transparent about the fact that we do not have all the answers.
I am thrilled when the press gets more people thinking and talking about hard questions about charity and development – but do not count on it to tell the whole story. That’s why we turn down most media requests and don’t have a “Press” page on our website. Instead, as the buzz builds around cash transfers, we are doubling down on delivering a great product for our recipients and donors and asking ourselves the hard questions about why we do what we do. I hope you will keep asking us the hard questions, too.
|During routine visits to recipients, our field team uses technology that automatically records a time and GPS marker for each piece of data they collect.|
In discussions of international development, corruption is often the elephant in the room. Funders don't like to hear about it; nonprofits and governments don't like to talk about it. But in my experience, the hard reality is that when any organization gives away anything of value – whether it's meals, money or anything else – we need to worry about corruption. When we don't, the results can be spectacularly bad. For example, when Sandip Sukhtankar and I audited one of the world's largest social programs, we found leakage rates as high as 80%. What can we, as donors, do to avoid this outcome? How can we be confident that benefits are reaching the intended recipients without being siphoned off along the way?
In independent research with state governments in India, I've seen encouraging progress. In particular, transitioning from cash-based payment systems to electronic payment systems seems to reduce graft and leakage, at least in places where the poor have access to secure mobile banking services. But there are limits to how quickly and aggressively governments, with their procedural rules and political constraints, can innovate in this area.
That's one reason I'm excited about what we're building at GiveDirectly. By combining electronic records of behavior with multiple layers of independent auditing, we've created the strongest integrity system I've seen yet. Interestingly, we are finding that it's often the little things that matter most.
A great example of this came up last week. As they perform their routine visits to recipients, our field staff collect data using Android devices that automatically time-stamp each new entry. This may seem like a small thing, but it made a big difference when an employee tried to claim pay for a (fictitious) extra day of fieldwork. Typically, this sort of misrepresentation would be hard to catch without expensive, time-consuming monitoring. However, because of this technology, all we had to do was to compare timestamps and see that the work uploaded to our servers on Monday had actually been done on the previous Saturday. After a few quick phone calls to recipients to verify this, the case was closed. We caught the falsehood and saved a day’s wages with minimal staff time and effort expended.
There's still more that can be done, and we know it. We're always looking for low-cost ways to increase our accountability, and as we learn we're committed to having an open dialogue about the issue of integrity. Those who are unwilling to confront this issue are kidding themselves.
|A typical thatched roof in Kenya must be replaced 1–2 times per year, at a cost of $100–$150, and is often a habitat for insects.|
|A GiveDirectly recipient's home, with a new metal roof—safer, cleaner, and less costly to maintain.|
Along with Paul and Chris, I spent last week in Rarieda Province Kenya, where I received a lesson in development from the poor themselves. Before the trip, we knew from our data that a meaningful fraction of our recipients (endline results coming soon) spend a portion of their cash on housing improvements, and that the most common purchase in this category has been metal roofing (typically to replace thatch). To me, a new roof seemed like curious purchase. After all, I'm not aware of any non-profit dedicated to providing metal roofing. Like many, I wondered why this was such a popular choice. What was the logic behind this decision? Was this transformative, or just a form of conspicuous consumption? So I asked, and learned. This is what I found out…
- Increased "household income": Thatch roofs not only leak regularly, but can collapse several times a year. A tin roof, which lasts 10–15 years, can save a household $100–$150 per year that would have been spent on the labor and materials for re-thatching the roof. For context, our average recipient lives on a budget of about 65 cents per day.
- Cleaner drinking water: Recipients who buy metal roofing usually add a gutter, which allows them to collect rainwater during the rainy season. As rainwater is often cleaner than local water sources, this may reduce incidence of waterborne diseases like typhoid fever and cholera.
- More time for work (or rest): Collecting water from the roof also saves recipients from walking to fetch water — often from several miles away, which gives household members more time to work or rest. (This is especially true for women, who are typically tasked with carrying water.)
- Fewer mosquitos (and malaria?): Thatch roofs leak and collect moisture, which makes them a favorite hiding place for mosquitoes. In addition to the comfort of having fewer bugs in their homes, evidence suggests that people living under metal roofs may also experience lower rates of malaria.
In short, in Kenya, a metal roof is much more than a luxury item or a status symbol. It can be a solution to multiple problems, most of which we in the developed world will never experience ourselves. I was thoroughly impressed by the practical benefits of metal roofing, but nothing made a deeper impression on me than seeing the pride, dignity, and security that recipients felt in their safer, more comfortable homes. One cash transfer recipient's wife had left him the last time his roof collapsed; when he purchased a new roof, they were reunited. When asked how the cash transfer and home improvements had affected his life, he replied, "I feel human again."
Of course, a metal roof is not the solution to every poor person's problems. What works in one village may not work in another. That is why cash transfers are so effective. By giving money directly to the poor, we give them the freedom to assess and address their own unique challenges, and we respect them enough to trust that they have more expertise in living their own lives than we do.
I believe we should be putting more money and more power directly into the hands of the poor. When given the chance, they have a consistent track record, across dozens of rigorous studies, of using money sensibly to improve their own lives. This evidence base was already compelling – and then along came Chris Blattman. In the last few weeks Chris, a development economist at Columbia, has released results from two randomized controlled trials (RCTs) of unconditional cash transfer programs in Uganda. His findings stunned even me.
In the first study, Chris and co-authors tracked the long-term impact of cash grants made to Ugandan youths. They found that four years after receiving the one-time grants, the youths were earning 41% more and working 17% more hours on average than their peers who had not been given cash. These are massive, massive figures and have been (deservedly) getting extensive coverage in Slate and the NYT, among other outlets. (Matt Yglesias writes, “…people in the rich world can pitch in as well. GiveDirectly is an exciting new charity model that lets you directly transfer money to households in Kenya.”)
Blattman's second study has been getting less attention, but it could be just as significant. In this study, Chris and co-authors gave grants to micro-entrepreneurs and also monitored them, sending social workers to provide advice and make sure they invested the money in their businesses. Sounds like a no-brainer idea, right? Sure enough, Chris found that monitoring increased profits. But then he did something really interesting: he also gave a different group of micro-entrepreneurs an additional grant equal to the cost of the monitoring… and found that their profits rose by more than the group who had been monitored. In other words, monitoring works, but it works less well than simply giving the recipients the program budget and letting them invest it themselves.
It’s this second study that underscores why we donors need to hold ourselves to a higher standard. How impressive is it if we get results when the poor could get even better results with the same money? Are we ready, after decades of doing it our way, to give them a chance?
The report also describes a new targeting approach whereby we transfer cash to all residents of a poor village, rather than only to those families who live in mud and thatch homes. We look forward to sharing more with you as we learn from and gather evidence on this approach in the coming months.
This post comes from Piali Mukhopadhyay, our Chief Operating Officer. As of this spring, Piali and our field team in Kenya have overseen the transfer of over $1 million to more than 1,000 households in Western province. They have also laid the groundwork to transfer $675,000 to an additional 1,500 households over the coming months.
Last week Piali visited one village to meet with individuals who had recently received cash transfers from GiveDirectly. Here, in her own words, are some highlights from those interactions. In keeping with our commitment to communicate our impact through rigorous evidence, not anecdote, we have provided some midline data from a recently concluded independent evaluation to help put her experiences into context:
"One recipient told us that she immediately bought a cow with her funds because she wanted to make sure she didn't spend the money irresponsibly. We asked her why she hadn't put it in the bank, and she told us that if the money was in the bank, she could still spend it little by little until nothing was left, but she couldn't go to the market and sell part of her cow." [22% of increased investments in tangible assets are in livestock.]
"One man who had bought a used motorcycle and put up a tin roof told us that he feels safe and at peace in his new home. He used to hate the rain because his house would leak, but now he loves the sound of it on his new roof." [52% of increased investments in tangible assets are on housing — often in the form of upgrading from thatch to metal roofing.]
"We heard rumors that one recipient left his house because he was afraid to meet us after 'misspending' his transfer. Lydia [a member of the Kenya field team] knew him and phoned him that evening. He explained that he had spent the money on a dowry for a second wife, because his first wife had died. He also said that he had not run away, would welcome us any time, and was proud that he was no longer in debt." [The change in spending on dowries, weddings, and funerals is 1.5 cents per person per day and is statistically insignificant.]
“One man could not stop smiling when we went to his house — he said that the cash transfer had made him feel 'like a human being' after years of deprivation." [99–100% of recipients surveyed report that the funds they received improved their lives.]
Maintaining personal contact with individual recipients is central to GiveDirectly's model. We share Piali's experience to convey the nature of the interaction between our staff and recipients, not to make claims about impact. The full results from the independent evaluation referenced here are currently being analyzed by the researchers. We look forward to sharing their conclusions with you here soon.