Monthly Archives: October 2013

Is GiveDirectly Changing the NGO World?

Everyday that passes, human beings are out there trying to change the world for the better. Many of them plod on until they give up or succeed based on the goals they set from the word go.

Recently I came across the GiveDirectly organisation that was setup by Harvard and MIT graduates with the core aim of sending donations to the rural poor directly and cheaply through the Mobile Money avenue that is widely used in a number of developing countries.

I must say it is a brilliant idea because am one of those who aren’t satisfied with the large overhead costs of most Non Governmental Organisations (NGOs) that end up spending over 50% of the money collected to sustain Rock Star lifestyles. Any way of helping the poor without spending twice or thrice of what they eventually get is welcome in my view.

How do they do it? An excerpt from their website states;

  • You donate through their web page
  • They locate poor households in Kenya
  • The donation is transferred electronically to a recipient’s cell phone
  • The recipient uses the transfer to pursue his or her own goal.

However, being familiar with the African countryside and having had a chance to spend part of my life there while growing up, I see some flaws in this approach. The assumptions that they make are;

1. Money is the solution to poverty among the rural African poor
2. The rural poor are very well versed with handling finances
3. The rural poor are as empowered as any other person to make proper investment decisions
4. Giving someone money to spend on feeding even when it’s for a limited time frame is a sustainable approach to helping the poor.
5. There is prudent decision making in the home thereby guaranteeing proper use of availed funds

I’ll proceed to give my views on each of those assumptions listed;
Money is the solution to poverty: This is partially true and in most cases a wrong assumption. Most rural dwellers in Africa do have access to non monetary resources that can be utilized to drive them out of poverty. These resources do not necessarily need money initially to uplift their livelihoods. A case in point is my village in Butaleja district, Uganda. We have a lot of swamps in that area and. Rice is a crop that can be readily grown. Despite there being a big boom of rice growing, a number of households are still wallowing in poverty. This is not necessarily because they lack the land to farm or labour to till the land but in a number of cases it’s lack of a working culture, poor self belief and misplaced expectations. Give them money and they will appear to get better for a while only to be catapulted back to their poverty stricken life.
Rural Poor are well versed with handling finances: Again I say a big No to this. It’s hardly the norm in most of these settings. Children grow up being told that money is bad because it will spoil them. It’s only when they become adults that they get their first taste of freedom handling money. This means that they are likely to take a number of years or even decades understanding money. While eventually they might get accustomed to handling money, the amounts will be minimal and when you all of a sudden slap them with a couple of hundreds of dollars, they literally run mad. I recall a cousin of mine that I used to grow rice with in the Doho Rice Scheme. Whenever we harvested our rice produce and sold it, he (being hardworking) used to get large harvests and make a lot of money selling the produce. This guy would leave the market place in Mbale town and shop the fanciest things and not rest until he has spent the remaining cash buying alcohol for his village buddies as they sing his name in reverence. He went on to exhibit similar tendencies even when he eventually got a well paying Government job and only cooled down when he was sacked.
Rural Poor are well empowered to make investment decisions: This too is a skewed expectation. While there may exist a number of them prudent in this regard, most aren’t and it’s not usually due to their own making. Things like processing of their agricultural produce are hard to fathom when they have never entered a supermarket to realise that one can pack cooked beans and sell them to others. In most cases, they are likely to regurgitate already existing business ideas I. The local community and join the bandwagon of small earners in an already over supplied local/village economy.
Feeding someone is a sustainable way of helping the poor: Wrong. People need to learn how to fish instead of being given fish. Stories abound from personal experience and friends in Africa who have tried helping in this manner and almost broken their backs expecting the beneficiaries to better their lives. Like moluscs, the recipients will always expect that  golden hand to keep feeding them. So, while a well manipulated survey may show that their lives are better because they eat Meat twice a week, you will not have solved the underlying problem. If such recipients are to be fed, let it be for a while as more solid strategies are being implemented to make them manage their destinies better.
There is prudent decision making in the household: My observation of most households in rural areas is that due to the cultural practices, the Men take charge of most monetary decisions. A good section of these men usually have very good and sober plans while they are Broke and will even cooperate with their wives when planning for prosperity. However, when money landeth, the status-quo changes. These very men put on hold all the glorious planning sessions they had with their spouses and begin making adhoc decisions usually aimed at suiting their selfish desires. It is a known fact that during harvest seasons in my Butaleja district, the rate of domestic violence increases sharply due to disagreements on family finances and investments according to a community worker friend of mine Noah Birumi Wapeera of A Little Bit of HopeSo, this is another flawed assumption.

So, why should I care if someone chooses to dole out their money to the poorest of the poor for whatever reason? I do care because in most cases money that appears like Manna from heaven tends to distort the village economy so much that even services/products tend to gain artificially high values not backed up by genuine demand or production.

In most cases when people summarise all their problems in to the one sentence of “Lack of Money“, my antennas go on the alert because chances are high they have not thought through their problems well enough. I have on a number of occasions thrown money at people’s problems hoping that somehow these people will get a breakthrough but apart from short term achievements, in most cases, no lasting impact is created.

  1. Does GiveDirectly address the pain people have about NGO’s sitting on money that should be helping the needy? YES
  2. Does GiveDirectly make a working class citizen like me happy about changing the world directly? YES
  3. Does GiveDirectly offer an opportunity to the poorest of the poor to access funds? YES
  4. Does GiveDirectly enable proper decision making for the funds recipients? NO [Seems not to be their mandate]
  5. Does GiveDirectly solve longterm problems of the funds recipients? Subject to Debate 
  6. Is GiveDirectly introducing a novel approach in the world of Charity? YES

I do therefore believe that the intentions of the founders of this organisation seem to be very good but serious flaws do exist and these are probably caused by crafting solutions to rural African problems from the comfort of a MacDonald’s restaurant at Harvard. There is room for improvement and I would be interested in seeing if the issues I raise have already been looked into.

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