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“We target the poorest people in the region and try to get the cash to them as efficiently as possible.”
“Okay...” I responded. There was a five-second pause before Joy clarified:
“And that, in it its simplest form, is it.”
“Oh, ok…. You don’t give them advice on how to spend it?”
“No. We believe individuals know best what they need.”
That was my first introduction to the GiveDirectly model of unconditional cash transfers. I was speaking to Joy in May of last year, having heard about the organization through mutual friends. As you can probably guess from that conversation, I was skeptical at first.
Fast forward seven months from that initial conversation and I feel very privileged to have been appointed the new Field Director in Uganda. I spent the time after our initial conversation working in Ethiopia on the topic of climate change. While hugely important and one of the biggest global challenges today, I knew that I wanted an opportunity to deliver more immediate impact and make a material difference to those most in need. My instincts told me that I would get that chance at GiveDirectly.
I have now spent one week on the ground in Kenya, meeting the current team and visiting some of our initial recipients. Whilst watching and learning I observed a few aspects of GiveDirectly’s operations that surprised me and noted a couple of things to look forward to in the future.
Observations on our model
Firstly, the model features multiple checks and balances, with recipients having up to five touch-points with GiveDirectly staff before receiving their first transfer. This is to overcome any village-level data issues, ensuring that we are living up to our mission of identifying and reaching those that are most in need. It isn’t as simple as turning up at the home of someone with a thatched roof (one of our identified targeting criteria); all information - including names, house location, pictures and mobile numbers - must match before that first transfer is submitted.
Second, each step requires substantial staff effort on the ground. Currently, we have over 30 staff members in Kenya alone, all of whom work long, grueling hours walking through the rain, talking to our recipients and investigating suspicious cases. The quality of the individuals that I met was energizing – they are well-educated, communicate very eloquently (“we speak the Queen’s English”, as Andrew, one of our Senior Field Officers put it) and, above all are extremely passionate about GiveDirectly and the work we do.
Finally, communities’ support for our values I have found particularly striking. All members of a community in which we work are given a GiveDirectly hot-line number to call if they feel there is anything suspicious, or there are rumors relating to GiveDirectly in the local community. This has been an important avenue of information for us and illustrates the fantastic work our Field Officers are doing in transmitting our values to recipients and communities.
Looking to the future
After an inspiring week understanding the work that we are currently doing today, I look forward to tackling a big question as I begin my work on the ground in Uganda: what could we improve in the model?
Efficiency is obviously one - David Brailsford, head of Great Britain cycling (my British bias coming in), attributes the large success of his organization to the “sum of marginal improvements”. That is what we need to continue to strive for, trialing and scrutinizing anything that we implement. While we may not need to go to the extreme of teaching Field Officers how to wash their hands to reduce sick days (which they actually do!), we should frequently evaluate how much benefit we are seeing from each step of our approach and continue to trial new ideas to improve the model.
Another question I’m excited to pursue and that I think our work in Uganda can help answer is how we work in areas where financial inclusion and mobile connectivity are poor. Understanding what it takes to deliver under these circumstances will be important as we look towards the future.
by our Board
Staff at the Mulago Foundation recently commented on the results of IPA’s impact evaluation of GiveDirectly’s cash transfer program. Broadly speaking they see the results as “important” but think the media have overhyped them. As an organization, we are skeptical of nothing more than hype. Our intention from the start has been to search for well-documented, independently verified solutions to extreme poverty, not the trendy intervention of the day. Indeed, we encourage all donors to hold development organizations to a higher bar by asking three basic questions:
(1) What is the evidence base for the intervention’s long-term impact?
(2) Is there 3rd party experimental evidence of the specific program’s success?
(3) How exactly will a marginal dollar get spent?
The unfortunate reality is that too few organizations currently address these questions. We’re proud that we do and that as a result anyone can weigh in on the results.
Are cash transfers an experiment? The authors refer to GiveDirectly as an “experiment” and urge caution in pursuing untested interventions. We too urge caution in pursuing untested interventions; this is precisely the reason we founded GiveDirectly, which is anything but an experiment. We believe there is deeper, more conclusive evidence on the effectiveness of cash transfers than almost any other development intervention we can find.
Specifically, cash transfers have been called the “among the most thoroughly researched interventions” by the UK’s development agency (DFID), with dozens of academic publications across more than 13 countries documenting meaningful impact. Cash transfers are one of a handful of development interventions whose impact has been studied experimentally beyond three years, with recent studies finding annual rates of return of 40% after 4 years in Uganda (Blattman et al, QJE, 2013) and 80% after 5 years in Sri Lanka (de Mel et al, Science, 2012). And GiveDirectly is one of the few non-profits to have been evaluated in a randomized control trial by a third party – in our case, Innovations for Poverty Action. Even organizations that have been externally evaluated have, sadly, often kept that fact secret and released the results only if they proved favorable. We’re proud to have done differently, pre-announcing the evaluation and binding ourselves to an honest discussion of the results before we ever saw them.
Are the impacts meaningful? A second concern of the Mulago authors is about the magnitude of individual effects. In some cases this reflects misinterpretation of the results (details below). The bigger issue is what rigorously tested alternatives are available. For example, the authors are concerned about the 28% monetary rate of return that GiveDirectly beneficiaries see half a year after transfers ended. To be concrete, this rate implies that an average recipient who received $500 would more than double that initial transfer within three years, a strong result. The authors claim that other interventions can achieve even higher returns – up to 300%, a figure that exceeds even the largest estimates of returns to capital in Sub-Saharan Africa (e.g. Udry & Anagol, AER 2006). To our knowledge, however, none of these claims has been substantiated by a credible, independent, experimental evaluation. If and when they are we will of course be keen advocates.
What does “success” mean? Third, the Mulago post highlights important questions about the definition of success. In their post, for example, they explicitly put most emphasis on earnings impacts while putting none at all on reductions in violence against women. Other donors may feel differently. This is precisely why IPA’s study was designed to measure and publish a really large set of outcomes: any donor with any objective could get a complete picture and then decide for themselves whether to give. And the poor themselves may feel differently. Recipients in Western Kenya spent relatively little money on health or education, while recipients in other contexts have used unconditional cash transfers to sharply reduce HIV and HSV-2 infection rates and increase schooling (Baird, Garfein, McIntosh and Ozler 2012; Benhassine, Devoto, Duflo, Dupas and Pouliquen 2013). A broad lesson from this body of research is that poor people do things with money that vary depending on their needs and circumstances.
As we’ve said before and said publicly, cash transfers are not the single solution to poverty. In implementing them we have tried to adhere to high standards of transparency and evidence that are far too rarely met. We hope more organizations will do the same, so that we can all talk not just about GiveDirectly’s evidence, but instead, the relative merits of different interventions and organizations. It is this conversation that will move us beyond rhetoric and hype to credible, measurable, and long-lasting impact. We look forward to having it.
Some specific issues of interpretation:
Estimating the persistence of treatment effects. The Mulago post raises the sensible question of whether impacts might fade out over time after the initial transfer. It completely omits discussion, however, of the evidence presented in IPA’s evaluation on this point. Those data show that over the range of time lags studied effects were generally persistent and in some cases tended to increase, not decrease, with time.
Comparing magnitudes across different kinds of intervention. The Mulago post compares increases in income attributable to cash transfers to those claimed by other interventions designed to increase incomes. This is an extremely low bar to apply since, by design, cash transfers give poor people the flexibility to use money for purposes other than income generation. For example, recipients spent an average of 18% of their transfers on roofing investments which are cost-saving rather than income-generating. Including this spending in the denominator of a return on investment calculation effectively treats that 18% of spending as pure waste.
Distinguishing profit and cash flow. The Mulago post treats expenditure on self-employment activities as flow costs. In practice these expenditures include both flow costs and capital expenditures (e.g. inventory expansion), which is why IPAs study estimates effects on cash in and cash out separately. (The study’s use of the word “profit” is poorly chosen as the concept being estimated is in fact net cash flow.) The Mulago post similarly misinterprets the ratio of revenue to expenditure in various sub-categories as a measure of return on capital, which it is not.
Calculating returns on metal roofs. IPA’s full study estimates that the average cost of a metal roof among households who bought one was $564, and the average annual savings from repairing and replacing thatch was $107, for a simple rate of return of 19% (all figures PPP). The Mulago post appears to include only replacement costs, as cited in IPA’s shorter policy brief, and thus estimates a lower rate of return.
About a year ago, I took on the job of answering phone calls and responding to the messages that come to GiveDirectly’s email inbox. At the time, I had no idea what to expect, but I was happy to be involved with this “crazy new idea” of giving cash directly to the poor. It looked like great opportunity to help in a small way and to spread the word about evidence-based philanthropy.
As it turns out, answering GiveDirectly’s correspondence has been an education in itself, as well as an inspiring and emotional experience for me. Every day I get to interact with a wide variety of amazing people whose stories range from heartwarming to heartbreaking. I would like to share a few highlights from GiveDirectly’s inbox.
First, there are the messages from donors. Among the donors who write in, there is a spirit that goes beyond generosity; it is a spirit of duty and responsibility toward those who are less fortunate. Every day we get notes from donors who want to thank GiveDirectly just for providing a way to give their cash to strangers in need. Occasionally, we receive an apology message from a longtime supporter who has fallen on hard times and needs to lower or cancel a monthly recurring donation--these examples of selflessness fortify my faith in the general goodness of people.
Some of our donors have found creative ways to integrate direct giving into their lives. One woman gave in her father’s memory, to celebrate his lifelong connection to a community in Africa. Others give as a way of teaching their children. Couples have asked their friends and family for donations to GiveDirectly in lieu of traditional wedding gifts. One young woman used her bat mitzvah as a platform for fundraising and teaching her friends about GiveDirectly. Benefit parties have been thrown; a man bicycled across Australia to raise money and awareness of extreme poverty. Owners of small businesses, from a boutique to a bed and breakfast, have donated parts of their earnings to GiveDirectly. Recently we heard from a woman whose co-worker had pledged HALF of his annual salary to GiveDirectly--it is sometimes overwhelming to think of all the small and large ways that our donors share their good fortune, and how profoundly their choices can impact the lives of struggling families whom they will never meet.
Then, there are the messages from skeptics. Our donors are vigilant and keep us on our toes (“there appears to be a typographical error on page 10 of your annual report…”) and come up with creative solutions (“you don’t have a flyer for kids, so I created one...”). We also get messages questioning our recipients’ ability to spend wisely without our guidance, asking why GiveDirectly is not operating in developed countries, or suggesting that GiveDirectly website should be more flashy. We welcome these messages and respond with research and clear explanations of our operating model. Though everyone is not always happy with the answers we give them, I am proud to work for an organization that is transparent enough to reply directly to all of the questions that come our way.
Finally, there are the requests for money. These come from all over the world and are the most difficult messages to read and answer, because we cannot help. Most of the requests are for relatively small amounts of money-- and in many cases a relatively small amount could radically improve the requester’s situation. Though it is hard to say no, it also is a reminder of how meaningful a cash transfer can be to those whom GiveDirectly IS able to reach.
Before it became my job to respond to these requests for cash, I had not thought much about how very serious they are. In conversations with friends and family in the US about GiveDirectly, someone invariably laughs and says, “You give away money? How can I sign up?”. This seems kind of amusing until you are on the phone with a desperate person who has swallowed his pride and is asking for money to feed his family, treat a sick child, or keep a roof over his head. Whenever I hear someone question whether the poor will ‘become dependent’ or ‘take advantage’ of GiveDirectly’s cash transfer programs, I wish that they could speak to one of the people who reach out to us asking for help. No one would choose to be in that position.
My year in the GiveDirectly inbox has been a crash course in the strange mixture of inspiration and despair that surrounds any effort to tackle the huge problem of global poverty. Though it is disheartening at times to know that there are so many people in need whom we cannot help, it is profoundly encouraging that GiveDirectly is building a community of supporters who take joy in giving and do not despair in spite of the enormity of the challenge before them.
“How do you decide whom to give to?” is usually the first question I get when I describe GiveDirectly’s model. It’s also a question we think about a lot internally. Effective targeting is a core feature of the product we offer donors, and a moral imperative.
In 2013, we began to experiment with a new approach to targeting: giving cash transfers to all households in a poor, rural village. This “saturation” approach was much more inclusive than our standard approach of enrolling only households living in thatch and mud homes: 9 in 10 households were eligible with saturation compared to 5 in 10 with thatch only. (Households living in homes made fully of permanent materials like cement and iron sheets were excluded.)
We thought saturation might reduce tension and conflict in the community, costs, and/or gaming, while continuing to reach extremely poor people. Starting in mid-2013, we randomly assigned 19 villages to saturation and 18 to thatch only. After the first transfer, we administered a follow-up survey with more than 90% of recipients and conducted focus groups in six villages in order to get quantitative and qualitative measures of tension and conflict.
The data, though not conclusive, surprised us.
First, it’s not clear that saturation villages experienced less tension and conflict. We looked at several indicators in the follow-up survey, including the percentage of recipients who heard complaints in the community, the nature of those complaints, and observed crime or violence. Only about half the indicators were lower in saturation villages.
Second, the focus groups indicated that tension across both types of villages was low – mostly rumors and some awkwardness. And nearly everyone, when presented with the situation we face, said to prioritize households living in thatch homes.
Third, saturation did not significantly reduce costs or gaming. In saturation villages, enrollment costs were < 5% lower and the percentages of households falsely posing as eligible during enrollment were comparable (4.3% vs. 3.6%).
All this suggests that targeting thatch-only does not actually cause significant tension or conflict, as we’d feared – nor does it cause significantly different levels of tension than saturation. Given that, we’ll likely continue targeting poorer families living in thatch and mud homes. But we’ll also pilot the inclusion of some iron-roof households who are extremely poor. Although we know iron-roof households are on average less poor than thatch, we also know that there are exceptions. We’re considering a few approaches to identifying them, such as applying additional objective criteria (e.g., elderly, widowed, or visibly disabled) and accepting community-based nominations of a fixed number of “special” cases.
So how do we decide whom to give to? By continually experimenting and refining our approach based on data and feedback from recipients.
Fast Company has just named GiveDirectly one of the world's Top Ten Most Innovative Companies in Finance . The list highlights enterprises that "exemplify the best in business from across the economy and around the world." GiveDirectly is the only one on the list focused exclusively on finance for the poor in developing countries, and was chosen for distributing more than $6 million to about 30,000 impoverished people in Kenya and Uganda in the past year.
|Members of our Kenya and Uganda field teams gathered in Mbale, Uganda for last weekend's GiveDirectly staff retreat.|
I had the great pleasure of attending our first East Africa staff retreat this past weekend. Eight members of our Kenya team made the six hour trip from Kisumu to Mbale, the hub for our Uganda country operations. We spent three days together visiting recipients, sharing lessons learned, and getting to know one another better. I was struck by a few things about our growing team that I wanted to share:
First, each individual truly embodies the values of GiveDirectly. Over the course of our discussion, people kept coming back to how important it is that we let the poor exercise choice and promote a culture of transparency within the organization.
Second, there is strong interest in pushing our model further. We had many animated discussions about different ways to do targeting, follow-up, and adverse event management. People were eager to put new ideas on the table ("What if we helped the mobile money agents in Uganda with cash management?") and to problem-solve tough situations ("How do we handle cases where spouses disagree about how to spend money and are at an impasse?").
Third, everyone shares a sense of building something that's never been done before. The news that we had met Good Ventures' matching challenge was met with joy and celebration. Staff are invested in the product we’re delivering and the system we're building so that we can reach as many poor households as possible.
This team represents the front line of GiveDirectly: they introduce our program to recipients, provide on-going support and information, and collect the kind of detailed, household-level data that makes us unique. I feel privileged to be building a world-class model for direct giving alongside this group of very committed and talented individuals.
|After two days together in Mbale, our front line team is energized and ready to get back to the field!|
It’s official – poor families in Kenya and Uganda are getting the full $5M match from Good Ventures.
In just eight weeks, thousands of people have given $5,019,543 directly to the poor. What this community has done is just remarkable:
- 4,000+: individual donors
- 32: countries represented
- $1: smallest donation
- $100,000: largest donation
- 3.4: bitcoins donated
- 11,478: shares of stock donated
- 30: companies providing matching gifts
- 430: Googlers who participated in a record-breaking employee giving drive
- 1: bake sale (that we know of)
I’m proud to offer a service that so many people trust to create real impact for their dollar. The fact that demand for it is so strong means real change is happening in our sector. This comment from a recent donor online captures the shift well: “I'm giving because of GiveWell’s recommendation. This form of charity feels weird to me, but I'm not going to let that stop me. I'll be very interested to learn more about what impact this form of giving has on the recipients.”
We look forward to sharing more on the impact of this money over the coming year – our teams in Kenya and Uganda will start enrolling recipients in the next few weeks.
We now accept stock donations, which can be a very efficient way to give in some cases because of tax benefits. Contact us at email@example.com for details.
5. Giving What We Can Trust (UK).
Last, we have a new option for donors in the United Kingdom. Giving What We Can and GiveWell have partnered to allow UK-based donors to give to GiveWell’s recommended charities with Gift Aid. After you give on the GWWC website, they will claim Gift Aid on your behalf and send funds to our US bank account quarterly. I’ll be writing more soon about giving from the UK.
And as always, you can give online, by check, and by wire/ACH – and we always appreciate your ideas on other ways you’d most like to be able to give directly!
|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.