This American Life

[Cromacster]

Interesting piece on money, charity, and poor villages in Africa.  Worth a listen.


http://www.thisamericanlife.org/radio-archives/episode/503/i-was-just-trying-to-help?act=1#play

Planet Money reporters David Kestenbaum and Jacob Goldstein went to Kenya to see the work of a charity called GiveDirectly in action. Instead of funding schools or wells or livestock, GiveDirectly has decided to just give money directly to the poor people who need it, and let them decide how to spend it. David and Jacob explain whether this method of charity works, and why some people think it's a terrible idea. (28 minutes) economics • personal finance

[AlmostIndependent]

Love the show. I thought this piece was pretty interesting.

[Cromacster]

It was interesting to hear about what the people did with the money they received.

There were those who chose practical things like upgrade their roof from grass to tin, or make an investment in a cow or other money making endeavors.  Then the others who wasted their money on booze and prostitutes.

[CNM]

I liked how, when people were asked directly about how they spent the money, all respondents said they spent it wisely on roof upgrades or establishing a business.  But when they asked how their neighbor spent the money, it was always on some frivolity.  Although, that did not necessarily end up being true.  On example comes to mind is everyone thought this guy spent his money on booze, but it was really to finalize his divorce and pay a dowry so he could get remarried.  I think this says a lot about human nature!

[Mr.Macinstache]

I heard the first 10 mins, and really to me is was a slick commercial for their Give Directly system.

I do endorse the idea of giving charity directly to those who need it. There's no reason for a middle man to be involved... the irony is that Give Directly is the middleman. Heh. Pretty slick.

[smedleyb]

Jury is still out on this program.  Hopefully to OP updates thread when statistical data is parsed and analyzed by the end of the year. 

A fascinating, yet strangely simple approach to the question of how to help those in need.

[Cromacster]

Jury is still out on this program.  Hopefully to OP updates thread when statistical data is parsed and analyzed by the end of the year. 

A fascinating, yet strangely simple approach to the question of how to help those in need.

From what they said in the story, they are still compiling the data and will be releasing it some point soon.  If I can find it I will update this post.

[nuclear85]

The part I found frustrating was how they chose which people to give money to -- for example, in some villages, they give money only to people who still have grass roofs. What about the Mustachian African who has saved up for years to buy that metal roof? He's essentially watching his neighbors be rewarded for being less frugal than him, when he probably wasn't making more than his neighbors all along.

Admittedly, Give Directly acknowledges that this approach is questionable, and they are testing different ways of giving money. But that part of it makes me not so sure about the whole thing...

[Cromacster]

they are testing different ways of giving money. But that part of it makes me not so sure about the whole thing...

One person they interviewed brought this up, how its ethically questionable to run experiments such as this on humans.  A good charity, would want to use the most effective method.  Without experiment it is hard to determine what the best method is, which is what Give Directly is working towards discovering.  This is an interesting dilemma....Wanting to improve peoples lives in the most effective way possible without studying what the most effective way is.

All this said from my privileged american life...

[etselec]

I heard the first 10 mins, and really to me is was a slick commercial for their Give Directly system.

I do endorse the idea of giving charity directly to those who need it. There's no reason for a middle man to be involved... the irony is that Give Directly is the middleman. Heh. Pretty slick.

I think there are legitimate reasons to need an agency to facilitate cash transfers (if you decide that cash transfers are how you would like your charity dollars spent). When I choose where to give, I'm thinking about how to maximize my donated money's impact, which I would argue is an extremely Mustachian thing to do. In that regard, third world countries are my best bet, by leaps and bounds. But since I live in a first world country (and you probably do as well), how the heck am I going to find these extremely poor third-worlders to give my money to? And if I plan to give to charity on an ongoing basis, I'd like them to be doing some research to figure out whether it's actually working, so that, if it turns out it's not, I can stop giving them my money and start giving it to someone who's getting better results).

Give Directly is one of GiveWell's top recommended charities, and GiveWell is extremely choosy about who they endorse, basing their recommendations primarily on proven effectiveness of the intervention. Skepticism is a good thing when investigating a charity, but this one checks out very well to me.

[CNM]

I heard the first 10 mins, and really to me is was a slick commercial for their Give Directly system.

I do endorse the idea of giving charity directly to those who need it. There's no reason for a middle man to be involved... the irony is that Give Directly is the middleman. Heh. Pretty slick.

I don't think that Give Directly was trying to cut out the middleman; it was trying to cut out charity spending that is limited to specific projects.  Instead, they would give the money directly to the people to let them decide how to use it.  The idea is that the specific project funding may not be the best allocation of funds because, perhaps, the community would be fare better spending that money individually on something else.   

To me, it sounded almost like micro-credit or micro-lending programs minus the obligation to repay.