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GiveDirectly Sends Money Directly to People in Poverty

GiveDirectly, a U.S. nonprofit organization, is seeking to change the way aid is given to impoverished communities around the world. Where most nonprofit organizations seek to fight global poverty through advocacy programs, research studies, services and volunteers, GiveDirectly bypasses traditional nongovernmental organization structures to allow donors to see exactly where and who their money is going to. By doing so, GiveDirectly is able to send money directly to people in poverty.

Modern payment through technology has become a prominent cost-effective way to transfer sums of money over thousands of miles. GiveDirectly uses such technology to take and use money from donors and transfer it directly to people in impoverished communities. After opening to the public in 2011, the nonprofit exclusively makes payments to people in extreme poverty through online transferable cash grants.

The next step is to study the impact of direct aid to poverty-stricken communities. Over the next 12 years, every adult in 40 villages throughout Kenya will receive $0.75 per day through GiveDirectly donors. The wage, while below the poverty line, will ensure a source of income on top of day-to-day jobs.

Residents of another 80 villages will receive that amount over just two years and residents of yet another 80 villages will receive that amount in a lump sum. Since GiveDirectly sends money directly to people in poverty, all community members will receive the donations despite income levels, as a form of universal income. More than 26,000 people will receive a donation transfer, where 6,000 will receive a sustained universal income.

According to the GiveDirectly website, the group has received 81% of the funds required to pay for the study throughout all 12 years. The research team includes Abhijit Banerjee, co-founder of J-PAL and a professor at Massachusetts Institute of Technology; Alan Krueger, a former Chairman of President Obama’s Council of Economic Advisers and a professor at Princeton and Tavneet Suri, Scientific Director for J-PAL Africa, also at Massachusetts Institute of Technology.

Stephene, a 27-year-old laborer in Kenya, enrolled as a recipient of cash-grants from GiveDirectly four months ago. Two months in, he received his first payment over the phone of $97. He spent his first sum of money plastering his house and on necessities for his wife who is expecting a child.

When asked what he would spend the donated money on, Stephene said he would use it to buy his own boat, to make his life as a fisherman easier. He recently received his second payment of $481. The funds went to buying iron sheets and finally, his own fishing boat. In an interview with GiveDirectly, Stephene said, “This has improved my source of income [and] thus improved my living standards.”

Recipients of donations receive an SMS text message when their payments are ready for collection. On average, it takes 32 minutes for individuals to walk to the closest agent and collect their cash transfers.

In addition to the efficiency of the aid program, recipients can spend their payments on necessities that are unique to their lives and families. By sending money directly to people in poverty, the organization breaks down some of the difficulties of traditional foreign aid.

Riley Bunch

Photo: Flickr