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4 Impacts of USAID Programs in Mozambique 

USAID Programs in Mozambique
While much progress has been made in recent years, Mozambique has long struggled with poverty due to natural disasters, COVID-19, lack of access to education and repeated conflict, with approximately 62% of the total population living in poverty. This means that a majority of the population is living on less than $1.90 a day. These circumstances often arise in the more rural parts of Mozambique where a lack of skills training lends to selling produce in markets leaving people with barely enough to support their families. Since its inception in 1961, the U.S. Agency for International Development (USAID) is a federal agency that aims to support countries by uplifting and strengthening communities through various programs and partnerships. The following are examples of success stories of USAID programs in Mozambique that follow a history of aid that spans more than 40 years in the country. 

Partnership With GiveDirectly

Following cyclone “Idai” in March 2019, hundreds of thousands of people experienced displacement from their homes in Mozambique. In combination with the impact of the COVID-19 epidemic, approximately 4 million people, roughly 10% of the population, were facing food insecurity. To address this issue, USAID has partnered with GiveDirectly, a program that takes a unique approach to fighting poverty through direct cash deposits for villagers who need to purchase food, medical and agricultural supplies. Since 2021, GiveDirectly has provided $10.9 million in cash to 18,000+ people across 55 different villages which includes more than 7,000 households. 

USAID’s partnership with GiveDirectly in 2024 has allowed for the growth of programs like Cash+ Youth in Conflict Affected Communities which provides $250 each to youths while they receive business skills training through USAID. The partnership has also brought growth to GiveDirectly programs like Cash+ Climate Smart Agriculture and Cash+Resilient Agriculture. These programs provide cash transfers that increase distribution of agricultural inputs, training in sustainable agricultural practices and the purchase of new farm equipment like fertilizers and high-quality seeds.

Educational Programs

Education plays a pivotal role in allowing children to set themselves up for the future they deserve by learning necessary reading and writing skills. As of 2016, 94% of children in Mozambique attended primary school, a significant improvement from 2003 when only 72% of school aged children attended primary school. Despite this improvement, less than 5% of students demonstrated grade-level reading proficiency by the 3rd grade. This is primarily due to factors such as a lack of reading material, teacher and student absenteeism and limited community engagement in the daily life of the school.

USAID has invested in the education and future of Mozambique’s child population through new educational programs like SABER. This five-year program, announced on August 17, 2023, plans to expand bilingual education in more than 4,000 primary schools across the provinces of Zambezia, Niassa, Nampula and Cabo Delgado. SABER is part of USAID’s plan to invest more than $150 million into education and community engagement across Mozambique in the next five years, improving the literacy and numeracy skills of more than 2.2 million students.

Previous educational programs in Mozambique, such as “Eu Leio” (I Read), sought to increase the distribution of reading materials within a period of six years (2014-2020). The program accomplished this while improving school building capacities and holding students and teachers accountable for the learning outcomes of their community. As of September 2019, their efforts have established 116 school libraries, 116 school councils began monitoring teacher/student tardiness and absenteeism and 116 District Education Plans to address critical education gaps originated.

Gender Equality

Among many in Mozambique there remains long-standing beliefs about gender that tend to encourage discrimination towards women. These gender norms, among other contributing health epidemics like HIV is what leaves Mozambique rated 119th out of 166 other nations on the UNDP Gender Inequality Index. These disparities play out in a variety of ways with approximately half of women being illiterate, 11% of young women and adolescent girls contracting AIDS, and women comprising most of the unskilled labor force that includes agriculture despite their work going largely unpaid. Women in Mozambique face these problems, all while the media continues to support harmful stereotypes about women by portraying them as deserving of violence.

The harmful stereotypes in the media are why one of the many USAID programs in Mozambique is directed towards bridging the gender divide through the Media Strengthening Program. This program aims to amplify citizens’ voices who may not otherwise be heard by targeting gender biases in reporting while working to include female voices as sources. Key targets of gender biased reporting may include topics such as early marriage, women’s health issues and gender-based violence. While more work is necessary to end gender biases in Mozambique, the media is a key component in changing people’s perspective across the country so that further change faces less resistance.

Conservation Efforts

Among the USAID programs in Mozambique are efforts in wildlife conservation. No organization has exemplified this effort more than the partnership between Gorongosa National Park and USAID, a partnership that celebrates its 20th year anniversary as of 2024. After their initial partnership in 2004, USAID began its support of a number of initiatives in the Gorongosa National Park including wildlife protection with the hiring and training of park rangers, habitat restoration through the construction of beehive fences, and conservation through pangolin rehabilitation and veterinary care. With these efforts there are now more than 100,000 animals in the park including elephants, lions, hippos, antelope, painted wolves, hyenas and leopards.

The efforts of Gorongosa National Park, which USAID has supported, have created sustainable incomes for local residents by re-allocating jobs. For example, USAID’s partnership with Gonorosa National Park is replacing jobs like illegal hunting, mining and slash and burn logging with coffee cultivation, honey production, cashew farming, fish farming and chili growing. These efforts are in addition to how USAID’s support is reaching 200,000 people through community health workers, traditional birth attendants and mobile medical clinics.

Concluding Thoughts

These partnerships and organizations alongside many more have successfully demonstrated the impact that USAID programs in Mozambique have had in elevating communities. Mozambique is one country among many other success stories of the good work that USAID has accomplished throughout the world. 

– Hunter Gomersall

Hunter is based in Santa Barbara, CA, USA and focuses on Good News for The Borgen Project.

Photo: Flickr

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Innovations in Poverty Eradication in Mozambique

Innovations in poverty eradication in MozambiqueMozambique is a land of contrasts where poverty and plenty coexist. While the continent is home to untapped natural resources, it also remains home to a very large poor population. Mozambique currently ranks sixth from the bottom on the UN’s Human Development Index. Approximately 68% of its population lives in extreme levels of poverty. Moreover, Mozambique is one of the world’s most climate-vulnerable countries, facing significant environmental challenges and the rapid population growth of the country, ranking third highest in Africa, is increasingly straining public services. However, GiveDirectly is working to change this by employing innovations in poverty eradication in Mozambique through direct cash transfers.

What Is GiveDirectly?

GiveDirectly is a non-profit organization that sends money to the world’s poorest households. By sending money by direct cash transfer, GiveDirectly immediately eliminates the need for intermediaries and significantly impacts global poverty.  

While GiveDirectly currently operates to alleviate poverty around the world; its work in Mozambique has seen them delivering cash to families on the frontline of climate disasters since 2021 and has placed GiveDirectly at the forefront of innovative poverty eradication in Mozambique. 

Innovations in Poverty Eradication in Mozambique

GiveDirectly is alleviating poverty in Mozambique by giving no-strings-attached cash to people living in extreme poverty across the country. In the last decade, GiveDirectly has delivered $900M+ to more than 1.48 million people across nine African countries. It is clear how cash transfers play a significant role in moving the needle of people living in poverty from one point to another. 

In Mozambique, GiveDirectly has made a significant impact, raising over $7.4 million. This funding has been directed towards crucial programs like Cash+ Resilient Agriculture and Livelihoods. These initiatives aim to reduce poverty by empowering households to invest in their farms, thereby improving their economic stability. Moreover, the Climate Disaster Recovery and Food Security program further aids poverty alleviation by enabling families to invest in their homes, businesses, education, and health. 

Benefits of Cash Transfer

Many individuals may be skeptical of a “no-strings-attached” cash, believing that unconditional cash is spent on “temptation goods” such as drugs and alcohol. In fact, there is little evidence to suggest better outcomes come with conditionality. Actually, there are many benefits to alleviating poverty through cash transfers. The main benefit is that a cash transfer enables people to achieve their own, personal goals. 

For instance, GiveDirectly points out how cash transfers to individuals in Mozambique allowed kids to go back to school, individuals to reinforce their houses and people moving away from elephant crop raids. What is innovative about the way GiveDirectly alleviates poverty is that they empower recipients to make their own decisions. 

GiveDirectly stands out in innovatively alleviating poverty in Mozambique through its evidence-based approach and its rigorous standards of evaluation when it comes to implementing its programs. GiveDirectly is a standout NGO that effectively combats poverty through its innovative and highly scalable approach. By utilizing mobile money, GiveDirectly can swiftly provide cash assistance to tens or even hundreds of thousands of people. This means the charity can deliver aid rapidly and efficiently, making a significant impact in eradicating poverty. 

– Lara Inglis-Jones
Photo: Wikimedia Commons

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3 Organizations Working Toward Poverty Reduction in Liberia

Poverty Reduction in LiberiaLiberia has implemented various poverty reduction initiatives, which are essential in regions where the extreme poverty line can fluctuate due to uncontrollable factors. These plans are aimed at bringing about positive change, not only within Liberia but also globally.

The Pro-Poor Agenda for Prosperity and Development in Liberia is daring and has broad goals. The International Monetary Fund (IMF) outlined that Liberia seeks to eliminate poverty and hunger, bridge gender inequalities, provide comprehensive education and increase its people’s overall quality of health. 

In Liberia, the number of households below the extreme poverty line increased to more than 50% as of 2021. Half of Liberia’s families live on less than $2 a day. Countries have tried many ways to tackle the problem of poverty. Some have worked, some have not and some are still being studied. The following are organizations working toward poverty reduction in Liberia. 

3 Organizations Working Toward Poverty Reduction in Liberia

  1. GiveDirectly. GiveDirectly is a nonprofit organization that believes in universal basic income. It stands behind the idea that poverty reduction in Liberia is possible. A UBI is financial assistance awarded to people living in extreme poverty. As of December 2023, GiveDirectly reported that its UBI initiative in Liberia has dramatically improved the quality of life of Liberians, and it provides data for improving the structure of UBIs for future positive impact. GiveDirectly offers the UBI to all of Liberia’s people experiencing extreme poverty, regardless of outside factors like unemployment or disabilities. It engages in long-term studies to examine the impact of its efforts toward poverty reduction in Liberia. After three years of study, the company gathered positive and applicable results, including happiness, overall well-being and food security. The group is meticulous about its research and the information it gathers, even offering equations on its website showing its study’s positive and negative results.
  2. New Breed Tech Hub. New Breed Tech Hub offers a real-life Magic School Bus in their struggle against poverty reduction in Liberia. This startup engineered a mobile ground assault on digital illiteracy in Northern Liberia by building a computer lab into a bus. It offers education programs to women and children to help develop their skills for the 21st-century job market. Access to the internet and technological proficiency are increasingly regimented in this market. Founder Jeremiah Lloyd Cooper, a survivor of post-war Liberia, says he wants to give kids opportunities “he did not have” and “prepare them for the 21st Century workforce.” Technology bridges extreme poverty to the possibility of a brighter future. Online education programs for struggling adults help them learn new, marketable skills. There is detailed environmental information gathered from drones to help farmers maximize their crop output. In addition, there are digital currency routes for impoverished people to receive donations and payments for services rendered as just a few of the ways that technology boosts an economy. Technology is one of the critical factors affecting poverty reduction in Liberia. However, if the people of Liberia are not adept at using technology, all possibilities become moot points. That is why New Breed Tech Hub’s venture is such an important and novel idea. The company can build a more positive future with the skills learned from its mobile computer labs. 
  3. DE4A. Around 33% of Liberians are using the internet compared to 63% of people on the planet. Moreover, it costs an average of $2 for 1G of data. The average household under the extreme poverty line can expect to have only $2 for necessities like food, clean water and shelter. The Digital Economy for Africa (DE4A) is an initiative from the World Bank that proposes to bring affordable internet to households and businesses by the year 2030 at the latest and has already had a significant impact on the cost of data and the distribution of the internet. The initiative managed to increase the number of people who had access to the internet from 26% in 2019 to 36% in 2022. It also decreased the cost of data, lowering the price from 10% of a household’s income to 5%.

What’s Next?

Several initiatives and organizations are actively working to alleviate global poverty and support poverty reduction efforts in Liberia. While the examples mentioned above are just a few, there is hope for new opportunities that aim to create a safer and more equitable Liberia.

– Antonio Muhs
Photo: Wikimedia Commons

Direct Cash Transfers: Is There a Case for Giving Directly?

Direct Cash TransfersDirect cash transfers provide an alternative method of delivering Overseas Development Assistance (ODA). However, arguments over their effectiveness and impact in comparison to development projects are rife.

Conventional and Alternative Modes of ODA

Traditional foreign aid efforts often come in the form of building new schools, providing water wells in rural areas of developing countries and infrastructure projects to boost employment to kickstart economies.

However, increasingly in recent years, the case for new approaches to providing ODA has gained traction, most catalyzed by the suboptimal use of foreign aid funding.

Direct Cash Transfers as a Viable Option

Direct Cash Transfers could be one solution to this problem, an opinion held by Rory Stewart, former President and now advisor of the international non profit organization, GiveDirectly. Founded in 2009, GiveDirectly has disbursed $700M+ in cash directly to about 1.5 million people living in poverty. GiveDirectly currently has a presence in Bangladesh, DRC, Kenya, Liberia, Malawi, Mozambique, Morocco, Nigeria, Rwanda, Turkey, Uganda, USA and Yemen.

According to Stewart, who is the former UK Member of Parliament (MP) for Penrith and the Border:

“Unconditional cash transfers have been proven to deliver support to those that need it with unprecedented speed and scale, meaning we now have the opportunity to do something historic.”

Assumptions are often made regarding how this money is likely to be utilized by those receiving it. GiveDirectly claims that it is most often used for “medicine; cows and goats and chickens; school fees; water; solar lights; tin roofs; irrigation; motorcycles to jumpstart taxi services; businesses to generate income; and more.” But how credible are these claims?

A Compelling Case for Direct Cash Transfers

In their efforts to demonstrate the effectiveness of their work, GiveDirectly highlights evidence from multiple sources. For example, according to research conducted in a study by ODI,

“Evidence was extracted from 165 studies, covering 56 cash transfer programs in low- and middle-income countries … There is strong evidence that cash transfers are associated with reductions in monetary poverty.”

GiveDirectly also calls upon the opinion of fellow non profit, Give Well, who dedicate their efforts to highlighting to donors the best channels for their cash. According to Give Well, “Cash transfers have the strongest track record we’ve seen for a non-health intervention, and are a priority program of ours.”

Claims of misuse for direct cash transfers are also disregarded by a paper produced by the World Bank in 2017. After reviewing quantitative evidence from 19 studies on the effect of direct cash transfers, and a further 11 studies measuring what the recipients of direct cash transfers spent the money on, the paper found that cash transfers significantly reduced spending on ‘temptation goods.’

The statistics paint only part of the picture. Many ODA projects still boast tremendous success in improving living standards in developing countries, improving education levels and boosting economic progression. However, these statistics have led many to believe that there must be a better way to allocate foreign aid budgets.

Although traditional means of providing ODA will likely continue to be allocated a significant proportion of Western foreign aid budgets, the efforts of GiveDirectly certainly provide a compelling case for direct cash transfers to take up a larger percentage of aid budgets in the future.

– Ethan Leyden
Photo: Flickr

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How Tab for a Cause is Addressing Global Poverty

Tab for a causeSince its launch in 2011, Tab for a Cause has raised more than $1.5 million for charity. The method by which Tab for a Cause is able to hit this milestone is simple: any time one of Tab for a Cause’s users — called Tabbers — opens a new tab in their browser, the browser extension allocates between one-tenth and one full cent to charity.

While Tab for a Cause’s traditional interface allows users to pick and divide their donations among a range of approved charities, the nonprofit recently rolled out specific global initiatives. This article illustrates four of these specific initiatives, which address global poverty.

Tab for Ukraine

Following the 2022 Russian invasion of Ukraine, Tab for a Cause launched its Tab for Ukraine initiative. Tab for Ukraine provides user-initiated donations that help Ukrainian families in the war access food, water, shelter, education and other crucial services. The specific charity that this initiative supports is Save the Children, which has worked in Ukraine since 2014.

In 2022 alone, Save the Children provided essential services to more than 1,095,323 Ukrainians. These services included hygiene kits, mental health support, direct cash transfers, online education spaces and locations where children could safely participate in sports, art, language learning, socialization and playtime.

Tab for Global Health

Another Tab for a Cause initiative is Tab for Global Health. This initiative provides donations that help train and employ health care professionals in developing nations, enabling health care access in the communities that need it the most and generally creating “healthier and happier communities around the world.” The charity that this initiative supports is Partners in Health.

Founded in 1987, Partners in Health provides high-quality health services to people in Haiti, Kazakhstan, Lesotho, Liberia, Malawi, Mexico, Peru, Rwanda, Sierra Leone and the Navajo Nation. While Partners in Health mostly focuses on developing nations, they work within the U.S., too.

Tab for Ending Hunger

For users looking to fight food insecurity, Tab for a Cause also offers its Tab for Ending Hunger. This supports the charity Action Against Hunger, which provides baby formula, emergency nutrition services and quality food to those who need it, fighting global malnutrition.

Action Against Hunger originated in 1979, and operates in 55 countries throughout Africa, Asia, Europe, Latin America, the Caribbean and the Middle East. Through its programs, Action Against Hunger provides services to an average of 28 million people worldwide every year.

Tab for Ending Poverty

The final initiative covered in this article is Tab for Ending Poverty. This funnels donations to GiveDirectly, which provides money directly into the pockets of those who need it, trusting that those living in poverty will spend the money on necessities. The goal of this charity is to accelerate the end of extreme poverty.

Founded in 2009, GiveDirectly provides direct cash transfers to people in Bangladesh, the Democratic Republic of the Congo (DRC), Kenya, Liberia, Malawi, Mozambique, Morocco, Nigeria, Rwanda, Türkiye, Uganda, the U.S. and Yemen. To date, GiveDirectly has provided more than $700 million to people living in poverty in the aforementioned countries.

Conclusion

With each day that passes, Tab for a Cause’s users raise more money for charity, helping to fight global poverty and food insecurity. For those looking to be part of this effort, Tab for a Cause is free and available for Google Chrome, Safari and Microsoft Edge.

– Natalie Coyne
Photo: Unsplash

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Effective Charities Reducing Poverty

Effective Charities Reducing Poverty
One of the most straightforward methods to combat extreme poverty is contributing to charities dedicated to this cause. However, the positive impact a donation can have varies between different organizations. Despite this, only 38% of U.S. donors research where their money is going. Fortunately, websites such as TheLifeYouCanSave and GiveWell provide valuable data to help individuals identify effective charities that reduce poverty globally. Here are three charities reducing poverty. They are different, yet highly cost-effective and impactful, organizations worthy of support.

Effective Charities Reducing Poverty

  1. GiveDirectly: A new and radical way of helping those most in need is through transfers of no-strings-attached cash. This concept has received wide criticism — consider the aphorism, “Give a man a fish and you feed him for the day; teach a man to fish, and you will feed him for a lifetime.” However, Michael Faye, executive chairman and co-founder of GiveDirectly argues, “There is some visceral discomfort with simply giving poor people money. But the evidence, overwhelmingly, is that cash is one of the most effective ways of alleviating poverty.” Using the gold-standard evidence of a randomized controlled trial (RCT), GiveDirectly claims its impact per $1,000 increases earnings by $270, assets by $430 and spending on nutrition by $330, with no effect on alcohol or tobacco spending, clearly demonstrating the effectiveness of their method. One research study conducted in Siaya County, Kenya, found the economic impact of a $1,000 transfer to be roughly $2,500 after 27 months. Not only did the economic benefit more than double, but psychological well-being, food security and education all improved too. Although there could be a risk of inflation, in Siaya where over 15% of local GDP was delivered in cash transfers, prices hardly increased — only rising 0.1%. Another study evaluating $1,000 cash transfers to coffee-farming communities in Uganda also found consumption, earnings and food security all improved for those in coffee farmer households as well as those not. GiveDirectly proves that cash transfers can have a huge impact on poverty-stricken communities as they reduce child labor (without reducing adult labor), increase school attendance, and provide economic autonomy and greater diversity in diet. It might be time to trust that those most in need know what they need and are capable of building a future for themselves.
  2. Malaria Consortium & The Against Malaria Foundation: Malaria is one of the leading causes of death in low-income countries, killing more than 600,000 people annually, most of whom are children under 5 years old in sub-Saharan Africa. One of the most effective ways of combating malaria is through seasonal malaria chemoprevention, a preventative medicine. In the Sahel region of Africa, which experiences notably high malaria rates, the Malaria Consortium leads the implementation of the Seasonal Malaria Chemoprevention program. This program involves administering monthly doses of antimalarial drugs to children during the four months when malaria season is at its peak. According to the World Health Organization (WHO), Seasonal Malaria Chemoprevention has demonstrated its effectiveness in reducing the prevalence of malaria attacks and severe cases by approximately 75%, potentially preventing millions of cases and thousands of child deaths. The estimated cost of providing this treatment during the high-risk rainy season is remarkably low, at around $3.40 per child. Another method for malaria prevention is the distribution of bed nets along with education on how to use them. The Against Malaria Foundation (AMF) excels in efficiently distributing bed nets while conducting follow-up audits to ensure the distributed nets are in use and being used correctly. Each bed net from the AMF costs just $2 and can protect two individuals for up to three years. Thanks to sponsor support for additional costs, the AMF is able to allocate 100% of public donations toward the purchase of bed nets.
  3. Helen Keller International: Malnutrition is another main focus for organizations dedicated to eradicating poverty, as every 11 seconds a child dies of malnutrition. According to the WHO, inadequate consumption of micronutrients (vitamins and minerals) is a form of malnutrition — micronutrients help produce the necessary enzymes and hormones for growth and development. Deficiencies in iron and vitamin A threaten the development and health, especially of pregnant women and children, in low-income countries. More than 200,000 children die every year from vitamin A deficiencies, as they are left vulnerable to deadly infections. Helen Keller International is an effective organization supporting door-to-door campaigns where health workers administer vitamin A supplements to preschool children at their homes and fixed-site campaigns where caregivers travel to health facilities with preschool-aged children to receive the supplements. It is an extremely cost-effective method as it costs only $1.00 to deliver a vitamin A supplement and help save a life.

Looking Ahead

These charities reducing poverty continue to do incredible, life-changing work to reduce extreme poverty. GiveDirectly offers an economic approach by providing families with an allowance to help them not only survive but thrive, while Malaria Consortium, the Against Malaria Foundation and the Helen Keller Foundation focus on health as they try to prevent deaths from malaria and malnutrition. 

– Alice Isola
Photo: Flickr

How GiveDirectly Impacts Global Poverty

GiveDirectly Impacts Global Poverty
GiveDirectly directly provides cash-based assistance to those in need, eliminating the need for intermediaries, and thereby significantly impacting global poverty. Here is how GiveDirectly impacts global poverty.

About GiveDirectly

GiveDirectly is a nonprofit organization that originated in 2008 with a mission to grant people living in poverty greater autonomy over their financial decisions. By adopting this approach, the organization believes it restores dignity and enables recipients to allocate the cash where it deems it most valuable. The organization has been operational in several countries since 2009, including the DRC, Kenya, Liberia, Malawi, Mozambique, Morocco, Nigeria, Rwanda, Turkey, Uganda, the U.S. and Yemen.

Hurricane Fiona Response

While GiveDirectly primarily respects individuals’ autonomy in financial decisions, it also implements targeted programs focusing on specific issues such as emergency relief, climate and refugees. In 2022, the organization provided cash assistance to 4,748 low-income families from Puerto Rico and Florida affected by Hurricane Fiona, aiming to support those natural disasters impacted.

Natural disasters pose a severe threat to those already living in poverty. According to a World Bank study, such disasters push 26 million people into poverty each year, disproportionately affecting those with lower incomes. In the case of Puerto Rico, Hurricane Fiona struck just five years after Hurricane Maria, leaving little time for a stable recovery. The disaster exacerbated challenges, especially for those in rural areas, with around 760,000 people lacking access to water and 928,000 people without electricity.

GiveDirectly responded by distributing pre-loaded credit cards to Puerto Ricans in dire need of support. Utilizing revolutionary AI tools, the organization identified geographical areas requiring assistance and successfully ran simultaneous campaigns in 32 Puerto Rican municipalities.

Success Tracker

The success of the way GiveDirectly impacts global poverty is evident in the positive results it has achieved through its cash-based assistance programs. To date, the organization has directed an impressive $650 million worth of aid to people in poverty.

The nonprofit shares first-hand accounts from beneficiaries who have benefited from the cash transfers. For example, Milka, a Kenyan man, is just one of the many who have been receiving monthly transfers from GiveDirectly. When asked about the impact of the donations, he talks about how the money has allowed him to start a small-scale cereal company which has significantly reduced the burden of supporting his family.

Another Kenyan recipient, Nyevu, described how “the weight of financial uncertainty that had burdened me for so long was finally lifted” after he received his first payment. He used the funds to purchase a wooden door for his house, providing a sense of security. He further invested in four goats, which not only provide income but also serve as an investment for a dairy cow in the future.

Both examples show how important it is to leave decisions up to the individual as each person will have different methods of using the funds to help their lives.

These examples underscore the importance of empowering individuals to make their own decisions, as each person has different ways of utilizing the funds to improve their lives.

Validation of the Organization’s Approach

The organization’s approach has undergone thorough research and received validation, demonstrating the effectiveness of direct cash transfers. Three hundred studies have supported this method. The studies have been compiled to illustrate the most efficient ways of providing cash transfers and to debunk the misconception that “you can’t just give money to poor people.”

For example, a study on the impact of unconditional cash transfers on poor households in rural Kenya found that in less than two years, the households had sustained increases in assets, as well as many knock-on long-term impacts.

Looking Ahead

The way GiveDirectly impacts global poverty has occurred through a straightforward yet effective method. By restoring financial autonomy to those living in poverty, the organization plays a vital role in the fight against global poverty without imposing rigid assistance on those in need.

– Daisy How
Photo: Flickr

5 Debunked Common Myths About Unconditional Cash Transfers

Unconditional cash transfers (UCTs) are rapidly increasing as a radical method of ending poverty. Cash assistance has doubled in size since 2016 and now constitutes nearly 20% of the entire humanitarian aid sector. In opposition to tradition, advocates of UCTs believe that the way forward is to provide people in extreme poverty with cash and allow them to make their own spending decisions. This approach seems to attract skepticism. However, countless cash transfer programs have shown criticisms to be misplaced while revealing the incredible power UCTs have at transforming people’s lives. The following are myths about unconditional cash transfers.

5 Debunked Common Myths about Unconditional Cash Transfers

  1. “People will waste money on drugs and alcohol”: A stereotypically held view is that if people receive unconditional cash transfers, they will waste the funds on items such as drugs, tobacco, alcohol, etc. rather than making investments toward their future.  Contrarily, countless studies have shown the opposite to be true. A 2017 study from The World Bank and Stanford University found that people don’t spend the transfers on alcohol, tobacco and other such items. As a result, concerns regarding wasting the money were therefore “unfounded.”
  2. “People in poverty don’t know what they need”: Traditionally, governments and NGOs decide what form of humanitarian assistance a particular region requires, rather than letting the people themselves make the decision. For years, there has been an assumption in development that ‘the West knows best’ and that developing regions require intellectual guidance from more developed nations to progress. This approach underestimates the importance of resources and places knowledge as a determining factor of regional development levels. Furthermore, research has consistently shown that cash transfers allow those living in poverty to make effective individual choices that improve their lives. Spending choices routinely include increased investment in agriculture, health care and enrollment in education.
  3. “It is inefficient”: There is a belief that UCTs are simply inefficient. However, the available evidence suggests otherwise. Not only do the UCT recipients tend to spend their grants in a manner that effectively improves their lives, but they also do it in a way that is often far more cost-effective than existing aid programs. Just on its own, the World Bank spends nearly $1 billion dollars per year on aid programs. A 2015 study from The University of Chicago showed that skills training had a limited impact on poverty or stability in developing countries and was not cost-efficient. Conversely, cash transfers have proven to be a successful method of stimulating wealth and long-term earning potential with a more cost-effective result.
  4. “Giving people money will make them Lazy”: This is a common stereotype of welfare recipients. Again, evidence shows that the opposite is true. Studies have shown that cash transfers actually increase workers’ productivity. Moreover, unconditional cash transfers act as a kick-starter for many communities, stimulating them to invest more time and effort into achieving prosperity for themselves and their family.
  5. “It’s physically impossible to give away that much cash”: In the past, this may have been true. However, technological evolution now means that distributing large sums of money directly to individuals is not much of a challenge. GiveDirectly is an example of an NGO that uses electronic payment services such as M-Pesa and MTN that have unlocked the possibility of a mass-scale distribution of cash. GiveDirectly sends money to the recipients’ cell phones, allowing them to either convert this electronic balance into physical cash or use their cell phones to pay merchants directly. This gives people personal, secure access to life-changing financial aid.

Looking Ahead

In summary, the remarkable achievements of UCTs continue to defy expectations and change lives. Moreso, the world is beginning to see the merits of the cash movement, with recent research by the United States Agency for International Development (USAID) suggesting that up to 50% of all humanitarian assistance could now be effectively distributed as cash. Hence, unconditional cash transfers have the potential to revolutionize the development sector and nudge societies closer to minimizing or alleviating poverty.
– Henry Jones
Photo: Flickr

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The Nonprofit That May Have Found the Answer to Effective Foreign Aid

Effective Foreign Aid
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
Photo: Flickr

Free Money to Decrease Poverty in Africa

Decrease Poverty in Africa
In order to combat poverty in Africa in 2012, the government of Niger began giving monthly payments to more than 100,000 families in poverty. A payment of approximately 9880 XOF ($16 USD) went into their bank accounts every month for two years, which more than doubled each household’s usual budget. The government opted to conduct this experiment based on past trials that proved that receiving sums of money was extremely helpful to households in poverty. The outcome of this experiment was that, when individuals in poverty received free money, they had more time and were able to find productive ways to spend it.

Experiments in Universal Basic Income (UBI)

Today, this experiment has become a precursor to more than 200 trials in 75 countries to provide monetary support to those in poverty. These science-backed trials began in the 1990s, where researchers randomly distributed different types of payment (i.e. credit for a textbook or direct cash) in order to gain a deeper understanding of the effects of each type of payment that every household will find most beneficial. This proposal became “universal basic income” (UBI), where households of a given country consistently receive a set amount of money on top of their current wage. Economist Tavneet Suri explains that this extra income “can [allow individuals to] invest in riskier things because they have their basic needs taken care of.”

These experiments are similarly occurring in Kenya, where the charity GiveDirectly is funding a monthly allowance of 2,250 Kenyan shillings to more than 21,000 people. Each individual receives a phone that dings on the first day of the month to alert them that money went into their account–and it will continue to ding for 12 more years.

GiveDirectly

GiveDirectly is a nonprofit organization that began in 2009 with the purpose of sending money directly to those who need it via their phone, focusing on Kenya, Uganda and Rwanda. It is working to end the stigma that people in poverty use money that they receive for alcohol, and instead provide evidence that this money creates a more productive society. Since its conception, GiveDirectly has given more than $580 million to 1 million individuals in poverty.

Measurable Outcomes of UBI in Africa

Science has proven that providing a steady income for those in poverty is extremely beneficial. Not only do they become more productive, but they are able to work and enjoy their time without worrying about choosing if they will pay rent or eat. Here are some examples of why this tactic has been extremely beneficial when confronting poverty in Africa.

  • More children have been able to stay in school because of their eliminated need to work for their family’s income, allowing them to stay in school and complete their education.
  • A steadier income allows for more risk and creativity, like opening a business.
  • Mental health is improved not only from the lack of stress regarding fulfilling one’s basic needs, but more citizens are also able to afford health insurance.
  • Many countries saw a rise in child vaccination following the implementation of UBI, along with healthier babies being born.

UBI could be one of the largest stepping stones to ending poverty if more countries take interest in it, already showing its effect on poverty in Africa in multiple different countries. With the implementation of this proposal, countries could find themselves with a healthier, happier and more educated population.

– Aspen Oblewski
Photo: Flickr