Yes, you can trust the poor


Let us for a moment contemplate the state of charity in the world. Let’s use Heifer International as the model.

After the Spanish Civil War, an Indiana farmer by the name of Dan West volunteered his time as a relief worker, feeding hungry orphans and refugees.

He decided from his experience in the field that what the people really needed was “a cow, not a cup” so they could feed themselves rather than depend upon temporary aid.

From that simple observation sprang Heifer International, which today collects money to obtain milk cows, deliver milk cows and teach people how to take care of milk cows. I fear I am oversimplifying the work of Heifer International, so for more go to heifer.org. But this is the basic model for helping the poor.

Now comes a radical idea that challenges a traditional model: Instead of creating all of the infrastructure to deliver goods and services to the poor, why not simply give the poor money and let them buy what they need themselves?

That’s what GiveDirectly does. It’s based on the idea that the poor know what they need.

Trusted with the chance to become self-reliant, they generally will do so.

So the play is this: Instead of collecting, say, $10,000 and washing the donation through the overhead of a large organization to deliver a product or a service worth $1,000 to one person at the end of the pipeline, just skip the stuff in the middle and give $1,000 directly to not one, but 10 people.

Even if half the people waste the money, you’ve still helped five times as many people as the traditional nonprofit model.

That’s the theory. If it works, it will change the charity industry.

The outcome of giving directly is far from proven. But there are some good signs. David Kestenbaum and Jacob Goldstein, reporters with NPR’s Planet Money blog, recently traveled to Kenya to see how GiveDirectly (givedirectly.org) has worked. They found a few people who spent the money unwisely. But they found most used the money to improve their long-term financial situation.

One family got into the corn-grinding businesses. Several families replaced their grass thatch roofs with metal roofs — a one-time fix that saved the families the expense of replacing their grass thatch roofs two or three times a year.

Another man bought a motorcycle and began a taxi business. He says his family never goes hungry now.

GiveDirectly was founded by graduate students studying the economics of developing countries. They were encouraged by an experiment in Mexico in which a government economist proposed an end to subsidies for food and replacing it with a program that gave money to the very poor, provided they sent their children to school and to regular health check-ups.

The Mexican government found that children in the cash program were healthier and stayed in school.

Chris Blattman, an assistant professor of political science and international and public affairs at Columbia University, isn’t sure GiveDirectly will ultimately prove successful. But he likes the experiment. Sometimes giving directly will work and sometimes it won’t. But we won’t know until

Measuring the real cost of a charity in this way — as opposed to simply calculating administrative costs, which can be easily manipulated — is something charities rarely want to discuss.

“Suppose a charity could give $2,000 of stuff to one person and help them become 200 percent richer or healthier than they were before,” Blattman writes. “Is it possible I could spend $1,000 each on two people, and help get them each 150 percent ahead? Wouldn’t that be better?”

In the end, it’s a moral issue. Good stewardship sometimes means getting unstuck from an inefficient infrastructure.

And, as a bonus, if giving cash directly breaks the cycle of dependence in favor of individual responsibility, and it sparks pockets of capitalism to boot, then we’ll really have something.