Note: As of November 28, 2011, we are still working on completing a formal review of GiveDirectly and we expect to complete it soon. The content below is from a blog post we published about GiveDirectly in July 2011.
Update: We have published a formal review of GiveDirectly.
We consider GiveDirectly a standout organization, though we prefer our two highest-rated charities above it.
Note: we sent GiveDirectly an early draft of this post and have made modifications after some back-and-forth.
We've been interested for a long time in the idea of simply giving out cash to the very poor, as a promising form of charity, and we've long been puzzled over why there don't seem to be any charities focusing on this approach. In 2009, while acknowledging the potential drawbacks of cash transfers, we argued:
Why do cash handouts seem to be so rare in the charity world? Perhaps it’s because extensive experience and study have shown this approach to be inferior to others. Or perhaps it has more to do with the fact that giving out cash fundamentally puts the people, rather than the charity, in control.
As of a few weeks ago, there is a charity focused on cash transfers: GiveDirectly. GiveDirectly plans to use the M-PESA system to transfer money using SIM cards, and hopes to give out 90% of its total expenses as cash transfers.
We encountered this group - and had some back-and-forth - before its launch.
GiveDirectly is a new organization and we have not done full due diligence on it: this is not a review. This post simply gives preliminary thoughts on a charity we consider to be worth watching. We have some concerns (see below) and the organization is too new for us to be able to assess these concerns and its general track record. That said, we think it's worth noting a few things that stand out about GiveDirectly relative to other charities at this preliminary stage, and that we consider to be good examples of the sort of thing we're looking for and trying to encourage. Most of these revolve around the idea of putting one's plans on the record so one can be held accountable in the future.
Reasons to be optimistic
We do think there are some interventions (for example, health programs) with a strong enough track record that it's reasonable to bet on them over cash transfers. But we're glad to see donors' options increasing, especially when the new option is one of the most intuitive ways of helping.
Our #1 suggestion for making social science research more credible is to "pre-register it," i.e., announce in advance what data will be collected and how it is intended to be analyzed, so that the final result can be compared with the initial plan and a reader can form their view of whether the results are an artifact of publication bias. We made this case to GiveDirectly and it sent us (see below) a template for the full survey it will be using and a plan for analyzing the data. Now that we have seen these and posted them publicly, GiveDirectly won't be able to cherry-pick results in the same way that we suspect many studies do. (Of course it will still be possible for the researchers to perform different analysis than they had originally planned; but they won't be able to sweep any unfavorable conclusions of their analysis under the rug.)
These are major points in GiveDirectly's favor. We do have some concerns.
(From GiveDirectly's response on this point: "What readers should know about potential risks is that (a) while our organization is new, cash transfers are not (see discussion of conflict risk below); (b) we locate recipients prior to accepting donations, so there is little risk of our being unable to electronically transmit a donation; (c) we are therefore able to send 90% of donations to the poor as a commitment, not as a target, and would refund donations if we were unable to follow through.")
(From GiveDirectly's response on this point: "targeted cash transfers per se are not a new thing by any means, but in fact one of the most widely used and evaluated development interventions … cash transfers now cover between 750 million and 1 billion people worldwide (p. 10) and are one of most researched and evaluated form of development intervention (p. 30), though they remain uncommon in the charity world … What donors should know about us specifically is that we include detailed questions on conflict in our follow up surveys and also as part of our ongoing, independent impact evaluation, which will assess whether transfers increase serious conflicts (such as crime). In the follow up interviews we have conducted to date, we have learned that some people have complained about GiveDirectly because they did not receive a transfer, but we have not learned of any conflict between community members.")
In an email on November 25, 2011, GiveDirectly adds:
Here is a concise summary of what we've learned about conflict to date... We conduct brief follow-up interviews with recipients after sending them transfers to collect process and outcome indicators. To date, 22 of 163 interviewed recipients (13%) reported hearing complaints from other households about the enrollment process. One recipient (1%) reported a verbal argument with a neighbor, and 1 recipient (1%) reported a criminal incident in which another recipient was rumored to have had some money stolen. Three recipients (2%) reported tension within the household about how to use the transfer; in one case the issue was whether or not the wife should start a business, and in the others it was not specified. No household reported violence within their communities as a result of the transfers.
Attachments GiveDirectly has sent us: