Hacking Philanthropy


Silicon Valley’s favorite charity is revolutionizing aid, a thousand dollars at a time. 

There’s a hoary truism in the aid world: Give a man a fish, feed him for a day; teach him how to fish, feed him for life. “Except it turns out it’s hard to fish if you can’t afford a fishing pole,” says Michael Faye, cofounder of GiveDirectly, a four-year-old nonprofit that uses rigorous data analysis to identify the neediest recipients in Kenya and Uganda and employs mobile banking to transfer money (about $1,000, a year’s budget) straight to them—no strings attached. Founded by four Harvard- and MIT-trained economists, GiveDirectly operates on a deceptively simple principle: Instead of funneling donations through a network of charities that absorb a portion of funds into operating costs and may misunderstand requirements on the ground, give money directly to the poorest to spend however they want. “They know their needs better than we do,” Faye says. “Whether that be tin roofs, medication, schooling, motorbikes to start a taxi business, or, in one case, a keyboard to start a band. It’s a question of dignity; the poor have an equal right to agency and freedom of choice.” 

It’s also a question of efficiency. GiveDirectly embraces the ideals and methods of “effective altruism,” the brand of data-driven, trial-monitored philanthropy that’s all the rage in Silicon Valley. (Facebook’s Chris Hughes sits on the board.) With low overhead, fewer opportunities for corruption or bureaucratic bloat, and no imposition of burdens, 90 percent of donor funds go directly to recipients, who, after a year, increase their earnings by 34 percent and their assets by 52 percent, while reducing the days their children go hungry by 42 percent. 

Of course, one-time cash transfers aren’t a panacea for poverty’s systemic causes. But Faye hopes they will become a benchmark for the aid sector. “Organizations,” he says, “should prove they do more good with a dollar than the poor could themselves.” givedirectly.org

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