GiveDirectly, which four MIT and Harvard students founded in 2012, was donned potentially “the most economically efficient charity ever” by the online magazine The Atlantic. The organization champions unconditional and direct economic investment into the world’s poorest areas, having the potential to alleviate whole areas from poverty within years as well as promote effective foreign aid.

How Does it Work?

In its simplest form, GiveDirectly allows the public to send cash directly to the poorest individuals through bank transfers via mobile phones that they receive from those on the ground. So far, more than $650 million has been donated to 1.4 million people living in poverty. Donors are then able to stay informed about the progress of the individuals they have donated to, with GiveDirectly averaging a 99% follow-up rate from every recipient. The method of this highly effective foreign aid rests on the simple idea that people see a greater improvement in their overall quality of life when they have a say in how recipients spend the money.

Obstacles

GiveDirectly has been battling with the unproven notion that it is not a good idea to give money to those who are poor. This led the organization to conduct its own research into the matter. The research revealed how the extensive benefits of cash transfers often reach beyond a program’s core objectives, facilitating effective foreign aid. The research also found that monetary poverty, education, health and employment all improved as a result of direct injection of cash into poor areas.

Rory Stewart, president of GiveDirectly and former U.K. Secretary of State for International Development, initially had his reservations about GiveDirectly. He stated he thought the best way to approach foreign aid was by “teaching people to fish rather than giving them fish.” However, after his appointment as the president in 2022, he stated on BBC World News that “a relatively small amount of money from Western standards can transform people’s lives so much more rapidly and efficiently than many traditional aid programs.”

Projects for the Future

GiveDirectly functions on an optimistic outlook of human nature and individualism. Individual cash donations allow people to make their own investments, giving dignity to the receiver. Tarkok, a subsistence farmer in Kenya, has been the recipient of $180 over the last 11 days. He “intend[s] to use [the money] to buy at least three bags of 90 kg maize grains that [will] last … for at least six months.” The rest of the money will go toward the purchase of goats. This is just one example of the impact small donations can have on the world’s poor.

Looking Ahead

Rory Stewart’s appointment as president of GiveDirectly last year marks a shift in the world of international development. More than 180 governments have implemented cash programs during COVID-19, marking a decisive step forward to meeting the U.N.’s goal to end global poverty by 2030. GiveDirectly is now the world’s fastest-growing nonprofit, with more than $1 billion raised so far, showing the impact that its new approach is having on foreign aid, alongside alleviating poverty.

– George Somper
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