Give Directly – A Bold Approach To Charitable Giving

Recently I was listening to Planet Money, which is something I regularly do. I relied on their analysis of the economic meltdown in 2008 and since then have appreciated their down to earth and common sense explanations of economic matters. They featured the work of Give Directly this month. The central conviction of this charitable organization is that those in need should receive directly the money rather than the services that are the hallmark of so many NGOs. Here is the radio interview. The belief is that the poor know better how to spend the money than others do.

GiveDirectly began in Cambridge, MA in 2008 when its founders were completing advanced degrees in economic development at Harvard and MIT. Through their work the founders learned of the explosion of mobile banking in developing countries and realized that this would make it possible to send donations securely and very cheaply to the poor. Because existing non-profits were not taking advantage of the opportunity, they created GiveDirectly as a vehicle for transfering their own money. As a non-profit created by donors, GiveDirectly is focused exclusively on giving to the poorest possible households at the lowest possible cost. Its leaders have no personal financial stake in the success of the organization, as their time is all volunteered.

These guys (and they are all guys) believe they can prove that giving in this way is a better way of giving and leads in the long run to better results, believing that the poor know best how to spend the money. Not only does the giving go directly to the individual needing help, there is no middle man, no bureaucracy that has to be sustained to distribute goods and services. 92.6 % of each gift made is directly passed on the recipient. Those leading the organization are volunteers and bear the costs of running it themselves. There are no salaries.

Of course, I began to immediately think of implications for Christian charitable giving. My sadly favorite example of wasted money is the $450,000 salary Franklin Graham was drawing until the Charlotte Observer ran a series on the Graham organization under Franklin’s stewardship. It wasn’t pretty. The overhead for most any Christian mission and charitable organization is rather immense. And, of course, once people start making money in such an organization, there are tendencies set in play which constantly are in tension with charity itself. This isn’t about evil motives. This is about basic self-interest. By the time the money we give reaches the field, there have been too many toll takers along the way.

What if we just gave the money rather than the shoeboxes for Christmas? What if we just gave the farmer the money rather than buy him a heifer? What if we……? You get the picture.

One of the closest ways of giving directly to missions is KP Yohanon’s Gospel for Asia. 100% of the money given goes directly to third world missionaries. You can imagine the consternation this causes among traditional mission boards!!! Rather than spending the $100,000 or so needed for many missionaries on an annual basis, many national evangelists can be supported for $30 per month. He doesn’t need two years for language study and cultural adaptation. He does not need furloughs for one year after every four on the field. Many have accused this model of creating financial dependency and attracting people whose ministry motives may be mixed since they can make a living through American dollars. Surely these things can happen. But they don’t have to happen in any way approaching a severe pathogen in the missionary cause.

But what about giving not even to third world missionaries, pastors, etc., but giving directly to the poor themselves? I am not familiar with a Christian organization that does so. Perhaps this is some kind of model that needs to be explored and developed. Just saying……

One thought on “Give Directly – A Bold Approach To Charitable Giving

  1. Interesting article – hope to listen to the broadcast soon. Interested to know more about their (Give Directly’s) thought processes and premises. Most definitely attention should be given to the effectiveness of how a donated money is used – perhaps some of our favorite charities might not fare so well?

    I was intrigued by the last paragraph of the article – “Last year, the GiveDirectly guys gave a presentation at Google’s corporate charity office. They didn’t show any pictures of people. But they showed charts and studies and numbers. The people at Google were impressed. They gave $2.4 million to GiveDirectly and told them to figure out how to give money to lots more people.” The statistics must have been compelling. Yet – are the North Americans still the ones deciding to whom the money will be given? How did they decide =which= poor they were going to help? For likely there is more than one idea of what GiveDirectly should get behind. Wondering how the founders of the organization figure out the contextual factors of the various situations . . .

    I suppose I should stop typing and listen for answers in the broadcast!

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