GiveDirectly

GiveDirectly were the new kids on the block for a long time.

A small, nimble team founded by PhD economists with a novel approach to ending poverty.

Just give cash.

A trend that could intensify if the third wave of American philanthropy materializes.

That's a huge opportunity, but the potential of operating across entire countries is a radically different proposition.

The question then becomes, how does GiveDirectly work effectively at that type of scale? Welcome to Ideas and Development, a VoxDev podcast on economic policy and research.

I'm Oliver Hannaway, the managing editor here at VoxDev, and my guest today is Caitlin Tulloch, who is the senior director for research, learning, and product at GiveDirectly.

Caitlin, welcome to Ideas and Development.

Like, Northwestern's gonna be basically the exact same whether or not I donate $50,000.

But if I donate $50,000 of malaria bed nets to Africa or if I donate it to GiveDirectly, which, uh, is a cash transfer, um, company that gives money to poor African families, the amount that does is literally lifesaving.

Mm-hmm.

In fact, I believe that Against Mara- the Against Malaria Foundation estimated that, um, one should expect that for every 4 or $5,000 spent on malaria nets, one child is spared of a malaria death.

Over the following months, millions worth of Bitcoin were donated to causes ranging from clean water and medical research to environmental conservation and open source development.

The Water Project, BidGive, the Electronic Frontier Foundation, F, GiveDirectly, OpenBSD, and GreenSteps were just some of the projects that benefited.

The campaign attracted global attention because of both its generosity and its secrecy.

To this date, we still don't know who, Pine, is.

So, Anthony, it's interesting that Malawi has been chosen.

What did GiveDirectly tell you about why the country was zeroed in to test this out?

They say that Malawi is ideal, and the reasons being for that are quite simple.

Malawi is exceptionally poor.

I spoke to a NGO watchdog based in Chicago and their benchmark is that anything over 75% is excellent.

So it's pretty high because you don't have to pay trainers, fly people in and out, pay for equipment, things like that.

Now, GiveDirectly has done a study about how much would be needed to roll this out across all of Malawi.

And they came up with a figure of $4.6 billion, which isn't really that much for a country of 20 million people, especially when you think that over the last 20 years, Malawi has received about $20 billion in aid, but its poverty figures really haven't budged very much.

Just give people money.

So this charity, GiveDirectly, sends cash directly to people living in poverty.

Its biggest experiment yet now is about to happen in Chiradzulu.

I hope I'm pronouncing the name correctly.

You see, $550 is close to a year's spending for a household there.

So if everyone has more cash, but shops cannot supply more goods, prices should rise and then eat into this benefit.

Now, GiveDirectly has tested this in a smaller area called Kondoni first.

The cash was injected there, was roughly equivalent to doubling that local economy, yet prices only rose by about 1%.

This is what I thought at 3:00 in the morning, okay? So firstly, obviously, I come from a privileged background, so there's a problem about my discussing this stuff because I'm at the wrong end of the inequality.

In my defense, I also spent 10 years as a civil servant, 10 years as a minister, and I've worked on extreme poverty in Afghanistan, and I worked with GiveDirectly in Africa, et cetera.

What I think I care most about, whether I'm in Cumbria or in Afghanistan, is the people who are really suffering, who are the very worst off in society.

And I, I talked about homeless and poor elderly.