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Should charities give cash to poor people, no strings attached?

Published: Friday, Aug. 30 2013 7:00 a.m. MDT

A Kenyan woman shows the message that appears on her phone when her GiveDirectly funds are available.

GiveDirectly

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GiveDirectly, a nonprofit charity founded in 2011, is now drawing a flurry of mainstream media coverage due to its simple-yet-counterintuitive philosophy: Giving cash directly to poor people, no strings attached, is the most efficient form of charity.

“The founders of GiveDirectly (were) a handful of graduate students at Harvard and M.I.T. who were studying the economics of various developing countries,” Jacob Goldstein reported for the New York Times Magazine on Aug. 13. “They chose to situate the charity in Kenya because it was a poor country with a well-developed system for sending money to anyone with a cheap cellphone.

“But they also planned to differentiate their charity; whereas most of the government programs give people money for as long as they qualify, GiveDirectly offers people a one-time grant, spread over the course of several months, and without any requirements.”

On Aug. 16, the public radio program “This American Life” profiled GiveDirectly.

“Giving cash with no strings attached clearly has limits,” Planet Money reporter David Kestenbaum said on “This American Life.” “Even if it works in rural Kenya, it may not work so well in Asia or in urban areas. It won't magically fix all the other things that keep people poor. It won't end civil wars or fix corrupt governments or create new vaccines. But even if it just helps poor people climb up a couple rungs, that would be a huge accomplishment. … There does seem to be this shift that's happening, a shift away from glossy brochures and smiling children and happy anecdotes, a shift toward data. Philanthropy is getting nerdier.”

Months before the New York Times or “This American Life” had reported on GiveDirectly, the Deseret News’ Mercedes White wrote a story in April headlined, “No strings attached: How one nonprofit is helping the poor by giving them cash.”

“Because of its rigorous research methods and commitment to outcomes, GiveDirectly has made several powerful allies in the world of development,” White reported. “It is currently ranked the second most efficient charity organization by Give Well, a nonprofit rankings group with a reputation for statistical rigor. Google also evaluated the group and came away so impressed that it gave the organization a $2.4 million grant to expand the project to other countries.”

Email: jaskar@desnews.com

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