GiveDirectly is a charity that does exactly what its name implies: It gives poor people money directly, no strings attached. It primarily targets the poorest populations in the world, where money goes the farthest: GiveDirectly organizers go to villages, get residents signed up, and then transfer them about $1,500 cash each in installments.
A few years ago, GiveDirectly decided to test its cash model in a different domain: disaster relief. Instead of trying to rebuild homes or provide food, they’d do what they do best: give the survivors money.
Yesterday, the organization announced that it will be doing its disaster relief work on a larger scale, in partnership with Google.org, Google’s philanthropic arm.
Giving effectively in the aftermath of disasters is challenging. People are very generous, but it’s not always easy to put all those donations to work — and major disaster charities have faced criticism for having few visible results despite hundreds of millions in spending.
So what if you just gave the people most affected by disasters a lot of money, right away? GiveDirectly tried it in the aftermath of Hurricane Harvey and Hurricane Maria. It gave some of the most affected people $1,500 each on a prepaid debit card — enough to buy a new bed, refrigerator, or washing machine, or to start repairs on a home, or to cover lost income from time off work during the storm.
The results were promising. GiveDirectly was able to reach most residents in targeted areas, and people mostly spent the money quickly.
Now, with an above-average storm season in the US expected, GiveDirectly is partnering with Google to do it again at a larger scale, hopefully getting more data about how well cash transfers work to help with disaster relief.
“Google.org is contributing $3 million to GiveDirectly to support large-scale cash transfers when a major natural disaster hits the U.S.,” Google and GiveDirectly announced in a press release. The team estimates that the money will support 2,400 low-income families in recovery from a disaster, and help GiveDirectly learn more about when in the recovery process disaster assistance is most useful. And by donating money now instead of in the aftermath of the storm, Google can make sure that GiveDirectly isn’t scrambling to distribute a windfall of unpredictable size, but can plan ahead and strategize.
Google will also be contributing their technical expertise: “A team of four Google.org Fellows is working full-time to combine government data on socioeconomic indicators and storm damage data into a single tool that will help GiveDirectly better identify and support the people most in need.”
Why cash is a big deal
GiveDirectly’s work overseas has been impactful in more than one way. In addition to directly benefitting the families who get the money, GiveDirectly has pushed other researchers to use cash as a “benchmark” when studying other charitable interventions.
The idea is simple: say you have some clever idea to improve people’s lives, like a vaccination program, or water pump installations, or new schools. Test the effects of your intervention and see how it compares to the effects of just giving your program expenses to the locals as cash. If your intervention doesn’t work as well as just giving people money, then don’t be clever — just give people money.
When you conduct such assessments, some interventions do turn out to be even more effective than cash. But the cash benchmark can help hold organizations accountable for their results — and discourage paternalistic interventions that don’t hold up compared to cash transfers.
It would be great news to see the same dynamic take hold in disaster relief. It’s common for chaos to dominate in the aftermath of a disaster, and it’s tough for charities to manage donor expectations and serve vulnerable populations effectively.
Perhaps, once GiveDirectly has collected some more data on the effects of direct cash transfers for disaster relief, other charities will start competing to demonstrate how their programs compete with cash. If cash is best, we can do all of our disaster relief through direct transfers to the people affected. And if other interventions work, they’ll have the chance to prove it. Either way, GiveDirectly fulfills its mission: to give poor people money, and by doing so, make us rethink how charity ought to work.
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