The Charity That Just Gives Money To Poor People

[orphanedhawk]

There's a charity called GiveDirectly that just gives money to poor people in Kenya. No strings attached. People can spend the money on whatever they want, and they never have to pay it back.

The idea behind this is straight out of Econ 101: Poor people know what they need, and if you give them money, they can buy it. But many people in the charity world are skeptical of what GiveDirectly is doing. They say people will waste the money or become dependent.

We recently traveled to Kenya to see how the program was going. We talked to a man named Bernard Omondi who used the money — $1,000, paid in two installments — to buy a used motorcycle. He uses it as a taxi, charging his neighbors to ferry them around. Before he had the motorcycle, he says, he sometimes worked as a day laborer, but often couldn't find any work at all.

We talked to several other people who started small businesses. One family bought a mill to grind corn for their neighbors; another started selling soap and cooking oil.

All of the people who got money from GiveDirectly lived in mud-walled houses with grass roofs. Many of them spent part of the money on metal roofs to replace the old, grass roofs. As it turns out, grass roofs are not only leaky, they're also oddly expensive: They have to be repaired several times a year, which requires buying a special kind of grass. Buying a metal roof costs more up front, but it's cheaper in the long run.

GiveDirectly uses a Kenyan mobile money system that makes it cheap and easy to send money to anyone with a cellphone. (The group gives cheap phones to people who don't already have them.) Mobile money is spreading to other countries, and the people who started GiveDirectly think giving cash could become one of the major ways people in richer countries help people in the developing world.

If giving cash does prove to work, it will raise an awkward question about some of the other charities out there: Maybe they'd do more good if they took the money they're spending and just gave it to the poor.

http://www.npr.org/blogs/money/2013/08/23/214210692/the-charity-that-just-gives-money-to-poor-people

[orphanedhawk]

My son pointed out that giving money directly does help the individual but does nothing in helping the bigger cost common good projects like building water systems, schools, etc.

[adgal]

Although, if you really dissect what we do here, it's not so different.  By paying a portion of rent or whatever directly, the money they do have is freed up (you do not have to claim additional rent subsidies from a private agency against your welfare check or whatever source of income you receive).  And I still don't see a lot of folks starting business' or whatever.  Sure, lots of those living below the poverty line are great people who are struggling. That is probably the majority to be honest - if you don't work in this field you never really see or hear from them, that's why so many can't really understand what the majority of the homeless or very poor even look like.  That's why the assumptions are made that they must be lazy or a drug addict - those are the stories you hear about.  But we dont' yet have a tool to differentiate between who is telling us the truth, and who is not.  

[adgal]

Actually, I don't think it raises any questions whatsoever.  Kenya is a very different country, where there are very different challenges then we see with our homeless population here, as well as our folks living in poverty.

Poverty is the number one cause of homelessness.  From there, the additional reasons are endless.  If you take those you see actually living in parks, eating out of garbage cans (the sterotypical homeless person), the overwhelming majority of those suffer from fairly severe mental health issues.  Schizophrenia and post traumatic stress disorder are biggies.  Giving money directly sounds like a great idea, but I can pretty much guarantee you no one is going to start a business.  The organization I work for always always direct pays vendors.  So their landlord if we house them, or whatever the case may be.

As for the working poor or other homeless, those living in poverty, the problem is you can never know for certain.  Lots are just poor, but there are still those with serious addiction issues, or those that seem to feel a pair of roller skates supercedes their need for food for their family (yep, seen that).  They will care for a pet by buying pet food or vet bills before paying rent or groceries.  They aren't bad people, but we do have to work on the root cause of their situation and often work hard at developing goals and life plans.  So same thing, we direct pay landlords, daycare centers, whatever the case may be as long as they keep working on the situation with us.  Cash is just not an option, nor is it a great idea.  I'm sorry, but I would heavily dispute this as an idea here and could produce the facts and figures that prove my point.

System dependency is also an issue.  My goal is always always to work with people to move toward independence. That is my agencies mandate, and one I agree with.  Throwing cash at someone is not the solution.  If the folks that did this study tried to compare what is happening in Kenya to what is happening here, I can pretty much guarantee no one in the world of homeless serving agencies or social services would give it much credence.  Very very different scenarios and very different situations.  Sorry OH, I sound so negative and don''t mean to.  You have a beautiful heart and I know why you posted this.  On the surface it sounds like a good idea and a great solution.  Unfortunately, it would only solve the problem for a small percentage of people I think.