News

Charity Gives Money Directly To World’s Poorest People

Print Friendly, PDF & Email
If they can afford it, people in Kenya are upgrading their roofs to steel. Image: CPL Bryant V. Cox, U.S. Marine Corps
If they can afford it, some people in Kenya are upgrading their roofs to steel. GiveCharity helps with this cost. Image: CPL Bryant V. Cox, U.S. Marine Corps

What would you do with a thousand dollars? You can probably think of a lot of fun ways to spend that much money.

But what if your family didn’t always have enough to eat? Or what if you lived in a house with a dirt floor and a thatched roof? A thousand dollars could change your life.

That’s the idea behind a charity called GiveDirectly, which puts money in the hands of poor people and lets them spend it however they choose.

GiveDirectly was founded in 2008 by four American university students. Paul Niehaus, Michael Faye, Rohit Wanchoo and Jeremy Shapiro were studying economics (how goods and services are produced and distributed) in the developing world. They wanted to find the best way to help the poorest people.

Traditional charities work by raising money from donors and spending it where they think it can do the most good. Charities often support major projects like building schools, hospitals, roads, wells and irrigation pipes, or providing medical care for people in need.

But not all of the money collected by charities goes straight to these projects. Some is used to pay for the cost of running the organization, the salaries of the people involved, and even the cost of raising money from donors (fundraising). In some cases, as little as half of the money donated to a charity is actually used for the programs it supports.

The idea behind GiveDirectly was to give money directly to the poorest people it could find and let them decide how to use it. This is called an unconditional cash transfer (UCT).

The organization eliminated as many expenses as possible so 90 per cent of the money it raises goes to the people who need it.

GiveDirectly decided to start its program in Kenya, a country on the east coast of Africa where many people live below the poverty line. (This means they do not have enough money to pay for their basic needs.)

The organization uses census information to find the poorest regions of the country. Then it looks through villages to find houses which do not have solid walls or floors, or which have thatched roofs instead of tin, to help identify the poorest people there.

Using a sort of lottery, GiveDirectly chooses people from this group to give money to. Selecting people randomly makes it easier to explain to the village why some households get money and others do not.

Those who are selected are given about $1,000. In Kenya, $1,000 can buy food for one adult for five years, or pay for secondary school education for a child for five and a half years, or it could buy an acre of land.

GiveDirectly has been giving UCTs to poor people in Kenya for about two years. In October 2013, two researchers released a report they had written on how this money is affecting the lives of the people who receive it.

The researchers found that people tended to use the money for such things as installing a tin roof on their house, buying food, or paying for medical and education expenses. Some people used it to start businesses such as farming, raising chickens, or selling clothing or other goods.

There was no indication that people spent the money on alcohol, tobacco or gambling.

Traditional charities are often concerned with improving health care and education for children, because these have been shown to have benefits for the future. People who received UCTs from GiveDirectly have higher incomes, more food and less stress than they had before. But it is too soon to tell what the long-term effects will be.

Related Links

GiveDirectly’s website

Facts about Kenya – National Geographic website

Facts about Kenya – Kwintessential

Poverty in Canada – CBC

Poverty in Canada – TVO

CURRICULUM CONNECTIONS
By Kathleen Tilly

Writing/Discussion Prompt
The article begins with the question: “What would you do with a thousand dollars?” Write a list of what you would do if you were given $1000.

Then think about the poor people around the world who might receive $1000 from GiveDirectly. Write a list of all of the things they might by with this money.

Compare the two lists. What do you notice?

Reading Prompt: Making Inferences/Interpreting Texts
Many charities bring goods such as food, clothing and medicine to people in need around the world. GiveDirectly is unique. GiveDirectly doesn’t give people things; it gives them money and lets them choose how to spend it.

Why do you think the charity is organized in this way? What are the benefits and/or challenges of structuring a charity in this way?

Junior
Use stated and implied ideas in texts to make inferences and construct meaning (OME, Reading: 1.5).

Intermediate
Develop and explain interpretations of increasingly complex or difficult texts using stated and implied ideas from the texts to support their interpretations (OME, Reading: 1.5).

Grammar Feature: Prefix
A prefix is a one or more letters that are added to a word. A prefix often changes the meaning of the word. For example, when the prefix ‘un’ is added to the core word ‘comfortable’ it changes the word from ‘comfortable’ to ‘uncomfortable’.

Read through the article and find all of the world that include prefixes.