Breakthrough Philanthropy: Just Give Them the Money

Good Ventures will match every dollar up to $5M to GiveDirectly through Jan 31, 2014

The simplest solutions are often the best ones, and GiveDirectly is rapidly assembling proof with the most radically simple philanthropic intervention of all: Unconditional Cash Transfers. They identify the poorest families in a region (specifically in Kenya and Uganda, so far) and then transfer money electronically to them using the M-Pesa system, no strings attached. Our foundation, Good Ventures, has been partnered with GiveWell for several years now and together we’ve been applying a rigorous analytical approach to find the most promising giving opportunities; this is, to date, the organization we’ve investigated that I’m the most excited to fund (other than GiveWell themselves).

Philanthropy projects, particularly in the developing world, have a number of problems that make them far less efficient than they could be and difficult to compare against other potential uses of capital. Frequently, there is little data available with which to determine their effectiveness, or even prove that they are net positive at all. It is also difficult to avoid corruption, particularly when executing the project requires going through local contractors or governments. Even when those problems don’t exist, most interventions require large investments in infrastructure (with ongoing payroll and maintenance expenses), offsetting some of the good provided and creating institutions that can become unhelpfully invested in their own perpetuation. Finally, programs are usually by definition paternalistic, implying (sometimes quite wrongly) that we have a better sense of how to spend money than the people who need it. GiveDirectly is not perfect on these measures, but they’re damn close, and the evidence assembled so far suggests the program is quite effective (and the fact that strong evidence exists at all speaks volumes about the organization itself). If your goal is to reduce inequality in the world, their work is about as close to a direct manifestation as you can get.

Giving and Relieving: How GiveDirectly Cuts Out the Middleman” — June 2013, FastCompany:
“Think of yourselves as a billion-dollar organization influencing the big funders like USAID and the World Bank,” Jacquelline Fuller, Google Giving’s director, tells the pair. “This is a way to transform how people think about aid. There is no reason why a lot of development dollars couldn’t be shifted to a model like this.”

I’m not trying to say that the rest of the philanthropy world should be abandoned in favor of this approach, and indeed this is only one of many projects Good Ventures chooses to support. However, it is uniquely data-backed, admirably cost effective, and theoretically quite scalable, per Ms. Fuller’s assertion above. It has the potential, at the least, to become the yardstick by which other charitable opportunities are measured. Instead of asking the question “should this project be funded or should we do nothing?”, we could be asking the question “should this project be funded or should we just give the beneficiaries the money?” and now we have that opportunity. I don’t mean this literally, of course, since it is usually impossible to directly compare success metrics in a formal way, but this is a baseline of efficiency and effectiveness that can serve as a durable guidepost. To be sure, we will continue to search for even better giving opportunities, and we’re confident that we’ll find them.

“The future is already here — it’s just not evenly distributed” — William Gibson
These three charts show how the world could end extreme poverty by 2030" — May 9, 2013, The Washington Post

Finally, I am compelled to mention that some people believe that poverty alleviation is a fools errand, because there aren’t enough resources to go around or because the world is fundamentally zero sum. They assume that you can only help one person out of poverty at the expense of another. As you can see in the chart above, this is almost certainly a fallacy; we can, and likely will, end poverty in the next several decades. As with malaria, it’s time to start looking at this as an eradication campaign, and GiveDirectly is one potential cure. As mentioned in the subtitle, Good Ventures will be matching every dollar up to $5M given to GiveDirectly in the next few weeks ($100k max per donor). This level of funding will enable us to see how effective they can be at the next magnitude of scale, helping tens of thousands of families at once.

Consider taking us up on this offer. Help us distribute the future.