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Google’s Contribution to Fighting Extreme Poverty

Google’s Contribution to Fighting Extreme PovertyGoogle is one of the most renowned tech companies in the world with an exquisite smartphone line, a widely-used search engine and the ownership of media-giant, YouTube. Despite the success of Google, it started from humble beginnings. Two Ph.D. students, Larry Page and Sergey Brin, founded Google, originally named Backrub, at Stanford University for a research project in 1998. From an initial investment of $100,000, Google turned into a multi-billion dollar company, focusing part of its fortune on its own philanthropic goals. Google’s contribution to fighting extreme poverty includes dedicating $50 million to the global education initiative and $50 million to the economic opportunity initiative. Google.org announced a $1 billion commitment in grants and one million employee volunteer hours to close the global education gap, create economic opportunities and diminish prejudice and discrimination.

Google and GiveDirectly

In 2012, Google granted $2.4 million to GiveDirectly. GiveDirectly is a nonprofit organization that transfers money to people in Kenya using “electronic monitoring and payment technology.” Recipients can receive money via personal cell phones or the cell phones GiveDirectly gives them.

GiveDirectly hopes for economic stimulation by increasing cash flow to impoverished individuals to create more expenditure on services and products. For example, NPR covered a GiveDirectly success story about a Kenyan man who used the money he received to buy a used motorcycle. With his motorcycle, he charges riders a fee similar to taxi services like Lyft or Uber as a source of income. This organization allows donors to fund individual living expenses instead of general predetermined expenses, giving recipients the freedom to purchase the specific items they need to financially benefit their family.

As of 2016, 36.1 percent of Kenya’s population lives on less than $1.90 per day. This statistic dropped from 46.8 percent in 2006 but Kenya is still far from eradicating poverty altogether. Google’s contribution to fighting extreme poverty allowed GiveDirectly to recreate its program in Uganda and East Africa, as well as research its economic, social and psychological impacts.

Google and StoryWeaver

A year later in 2013, Google funded $3.85 million to an India-based organization, StoryWeaver, as part of the $50 million initiative to close the global education gap. StoryWeaver is a free online educational resource targeting underprivileged areas. It is also a platform for authors, illustrators and translators to create stories for children. StoryWeaver makes books more available to children all over the world in their native languages at varying reading levels. The ability to read and write sets the foundation for further education and countries in poverty have a significantly lower literacy rate due to inadequate educational materials or resources.

Literacy rates in India logged in at 74.04 percent in 2011 compared to the average world literacy rate of 86.3 percent. As a result, StoryWeaver works to provide free reading material to communities in need. StoryWeaver has already garnered over two million reads and 13,000 stories in 175 languages. With Google’s help, StoryWeaver will be able to expand its platform and user base while increasing the production of stories.

Google emphasizes the importance of accessible educational materials and worldwide economic participation by supporting innovative national and global nonprofits. With its powerful influence, resources and platform, Google is in a strong position to establish positive changes and produce substantial outcomes. Google’s contribution to fighting extreme poverty began almost 14 years ago and its efforts continue to remain steadfast today.

– Angela Dong
Photo: Flickr

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GiveDirectly Sends Money Directly to People in Poverty

GiveDirectly
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

Universal Basic Income: GiveDirectly’s Experiment

Universal Basic Income

The nonprofit GiveDirectly has initiated a new cash transfer experiment that will provide at least 6,000 Kenyans with a test of universal basic income for 10 to 15 years.

According to the founders of this initiative, “…experimental tests show that the poor don’t stop trying when they are given money.” Instead, cash-based development initiatives result in people feeding their families, sending their children to school and investing in businesses.

Research also reveals that people prefer cash transfers over social programs because it provides them with more flexibility, freedom and dignity. In a study conducted in Bihar, India, 80 percent of the poor were willing to sell food vouchers for cash, with many offering discounts of up to 75 percent.

Considering this evidence, according to a Slate article, U.N. Secretary-General Ban Ki-moon has argued that “cashed-based programming should be the preferred and default method of support.”

According to Vox, basic income or universal basic income is defined as a regular payment to a group of people just for being alive. This cash transfer experiment by GiveDirectly is perhaps the first truly universal basic income program recorded in history, because unlike previous policies, it provides payment for whole villages over long periods of time.

For this project, GiveDirectly will randomly select dozens of villages in Kenya and provide every resident with a payment of between $0.70 and $1.10 for least 10 years. While $240 and $400 per year is extremely low by U.S. standards, it is equivalent or more than what the recipients ordinarily make.

World-leading academic researchers, including Abhijit Banerjee of MIT, will rigorously test this new system. The experiment will cost around $30 million, of which 90 percent will go directly to extremely poor households and the rest going towards having the money delivered.

The idea of universal basic income is currently being debated around the globe, with support from across the political landscape and pilot programs being considered by Finland and Canada.

To get the experiment started, GiveDirectly’s co-founders Michael Faye and Paul Niehaus are using $10 million of their own funds to match the first $10 million donated by others.

“At worst that money will shift the life trajectories of thousands of low-income households,” writes Faye and Niehaus in a Slate article. “At best, it will change how the world thinks about ending poverty.”

– Kerri Whelan

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Giving Directly to the Poor, No Strings Attached

Giving Directly to the Poor, No Strings Attached
What if we could give directly to the poor and let them decide what they most need to spend the money on? GiveDirectly does just that. It is the only nonprofit that gives cash transfer directly to the poor.

The New York-based nonprofit was created in 2008 by President and Co-founder, Paul Niehaus with the belief that people should spend their money how they wish. Niehaus says, “no one person has the same goal or aspiration.”

How does it work? People donate money through the organization’s website and extremely poor people in Kenya and Uganda receive cash transfer through their mobile phones. The recipient does not even need a mobile phone, just a SIM card so that they can use it on someone else’s mobile phone and receive the money.

The results of this method have been the distribution of $1,000, roughly a year’s income, to thousands of extremely poor families in Kenya and Uganda. GiveDirectly’s method not only cuts costs but also gets rid of opportunities for corruption by eliminating the middleman.

GiveDirectly is leading the way in transparency and data-driven decision making by streaming in realtime, key performance metrics on its website. The organization has also done randomized controlled trials on their programs, just like pharmaceutical companies to evaluate drugs. These tests are not usually done by charities because of their cost, difficulty and time consumption, despite being the best method for determining if programs are actually working.

The results of GiveDirectly’s methodology speak for themselves. After one year of receiving transfers, families had increased their earnings by 34 percent and increase their assets by 52 percent. There was also a decrease in those going to bed hungry by 36 percent and a decrease in the number of days kids went without food by 42 percent.

People improved their living situations by investing in their homes, their livelihoods and their savings, not on more alcohol or tobacco.

As a result, more organizations are following suit. The U.N.’s World Food Program with annual funding of $4 billion was only spending $10 million of it on cash and voucher programs, in 2009. In 2014, the cash and voucher programs expense increased to $1.25 billion across 87 programs in 56 countries.

GiveDirectly can serve as a test lab for the improvement of large institutional cash programs. It is running tests that will give the recipients more control of when they receive their money and another test on possible suggestions of how recipients can best spend their money. It is also giving advice on using cash relief after natural disasters.

As a result of its incredible effectiveness, GiveDirectly is receiving a major donation from Facebook co-founder, Dustin Moskovitz and his wife Cari Tuna. They are donating a bulk of their wealth, $25 million through their foundation Good Ventures, which is more than GiveDirectly’s 2014 budget.

Moskovitz and Tuna want to do the most good possible and have supported exhaustive research to conclude which organizations are the most effective and cost-efficient. Tuna believes if GiveDirectly could have some influence on changing institutional spending from not so cost-effective programs to cash transfers, it would be a great feat.

– Paula Acevedo

Sources: GiveDirectly, Huffington Post, Reason.com

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3 Top Charities for Measurable Returns

Charities_for_Measurable_Returns
When people choose to donate to one charity over another, they frequently do it guided by a strong conviction or emotion rather than pure rationale. Charity evaluators, however, are rapidly changing the way people think about giving back to society.

They argue that rather than giving to the cause that is closest to one’s heart, one should give to those charities that are the most effective, in measurable terms. One of the most trusted of these charity evaluators is GiveWell, a San Francisco-based group founded in 2007 by two hedge-fund staffers.

It recommends charities to donors according to four main criteria. First, the organization must provide strong evidence of positive impact on people’s lives. Second, it must be involved in highly cost-effective activities that provide a high, measurable return for every dollar invested. Third, the program must demonstrate that there is room for more funding and that it can productively put to good use additional donors’ dollars. Fourth, the charity must be transparent and accountable to donors.

Although GiveWell has been criticized for its results-based approach – leading it to favor health care interventions in the developing world, while ignoring others that cannot provide evidence of success due to the nature of their activities –  its evaluations do carry weight in the world of philanthropy.

Its top three recommended charities are:

1. Against Malaria Foundation (AMF)

GiveWell believes that AMF effectively expands access to bed nets in sub-Saharan Africa, where over 1 million people – mostly children – die each year of malaria. Through providing insecticide-treated bed nets that cost only $5 each, AMF prevents deaths and many other non-fatal cases of malaria.

2. GiveDirectly

According to GiveWell, GiveDirectly effectively distributes cash to extremely low-income individuals in Kenya. By directly transferring money to the very poor, recipients are allowed to spend more on their basic needs – such as food – and other investments that have high returns.

3. Schistosomiasis Control Initiative (SCI)

GiveWell states that SCI effectively expands access to deworming treatments in sub-Saharan Africa. In this region, a large percentage of the population, especially children, are infected with parasite worms that cause short-term symptoms such as anemia, and long-term developmental problems. This condition is relatively easy to treat: around $5 can protect a child for 10 years.

All three charities work in Africa, which is not surprising given that money can go much further in the poorest regions of the world. Twenty-five dollars, for example, allows someone in the developing world to get an eye surgery, while in the United States, this is an insignificant amount. Although most people prefer giving back to causes that are close to home, sometimes those in greatest need are far off.

– Nayomi Chibana

Sources: GiveWell, The Guardian, The New York Times
Photo: Harpers

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Facebook and Google back GiveDirectly

givedirectly

Why not just give the poor cash?  Rather than funnel the funds through a development organization, why not give it directly to the poor themselves?  GiveDirectly, a U.S. based nonprofit operating in Kenya, asked just that question and couldn’t come up with a reason why not.  Solid evidence shows that rural and poor individuals use the money wisely.  Many of the world’s poor are not irresponsible; they were born in circumstances that complicated their economic condition.  Thus evidence shows when they are given money they use it in positive ways.

Google and Facebook reviewed the research backing GiveDirectly and decided the idea was worth taking a second look.  Facebook co-founder Chris Hughes and a host of venture capitalists and tech entrepreneurs gathered over wine and conversation for an introduction to GiveDirectly.  Hughes was frustrated with nonprofits after a venture of his failed to gain traction and found GiveDirectly excited him and got him interested again in humanitarian issues.  Rather than funding major projects, GiveDirectly focuses on giving donated funds directly to poor individuals.

Research shows it can be effective and Hughes joined the board in addition to providing monetary support for the organization. Partnering with Hughes was Jacquelline Fuller, Director of Giving at Google. After an initial air of skepticism among Google superiors, Fuller was able to convince them that Google should support GiveDirectly.  Hard data on how recipients used the cash to improve nutrition, health, and their children’s education worked to convince Google superiors of the positive effects GiveDirectly is having in Kenya. Google donated $2.5 million to the cause.

The idea for GiveDirectly came from Paul Niehaus, an assistant professor of economics at UC San Diego, who originally came up with the idea of transferring money to individual’s cell phones. In 2008, he was working with the government to reduce corruption and saw transferring money directly to cell phones as one way to do that. GiveDirectly has significant impacts on nutrition, education, land, and livestock.

The organization finds poor households, typically people who live in mud huts with thatched roofs, and transfer money to their phones using a system called M-Pesa. The transaction costs a mere 3 cents per donated dollar. Many of the recipients use the money to upgrade to metal roofs. GiveDirectly admits that giving cash is not the solution for ending poverty, but it does provide an ability to meet immediate needs and ensure money gets to the people who need it the most.

– Amanda Kloeppel

Source: Forbes