Why is GiveDirectly (seemingly) the only organization focussing on unconditional cash transfers?

Amber Dawn

Why is GiveDirectly (seemingly) the only organization focussing on unconditional cash transfers?

Amber Dawn

1 min read · Sep 24, 2024

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Why is GiveDirectly (seemingly) the only organization focussing on unconditional cash transfers? — EA Forum

Global health & development

Cash transfers

GiveDirectly

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Most EAs agree that unconditional cash transfers (UCTs) are a good intervention against poverty. GiveWell and other organizations use them as a benchmark against which to measure other interventions. But GiveDirectly is the only organization I ever hear about that focusses on UCTs. From a quick google, it seems like some large charities (e.g. Unicef) have cash transfer programs (but also do other things). Wikipedia suggests that GiveDirectly really does dominate the space (on the 'unconditional cash transfers' page, it’s one of only three headings, alongside Sopreon and the CALP network, neither of which I’ve ever heard of).

Why is this? Some hypotheses that spring to mind:

(1) Most charity entrepreneurs instead found organizations that (they believe) are more impactful.

Cash transfers are a benchmark for impact, but according to the estimates of GiveWell and others, many interventions far exceed that benchmark. If you trust GiveWell’s estimates and are agnostic about what intervention you’re doing, it makes sense to found (or incubate) organizations that do the benchmark-exceeding thing.

(2) GiveDirectly is a respected organization and has room for more funding, so people who want to support UCTs just donate to them.

Both of these arguments/hypotheses make sense to me, but I can think of some reasons why it might be good if more UCT organizations existed:

(1) Local biases
Some donors might be enthusiastic about cash transfers, but also want to donate within their country/region. I’m sure that GiveDirectly chose their areas based on where it was most cost-effective to work, but like, it’s not as if there isn’t poverty in other countries! Even in rich countries, many people don’t have their needs met. While rich-country cash transfers are probably not competitive with poor-country cash transfers (or other highly effective interventions in global health and development), they might be better than the counterfactual (e.g. the rich-country donor donates to the local opera or whatever).

(2) Robustness
What if GiveDirectly has to shut down some day, or their transfers cease to be (as) effective for some reason? Seems good to have other organizations doing this widely-agreed-to-be-good thing.

Thoughts?

Otis Reid

I think (2) is just a very strong argument. As far as I can tell (have not researched deeply though), GiveDirectly is implementing a best in class version of a fairly undifferentiated product (giving cash unconditionally to poor households), so starting more competitor orgs seems low value. (I personally find the local biases argument unconvincing, but GD does allow UCTs to Americans here (https://www.givedirectly.org/united-states/) -- it would be interesting to unpack where the funding for that program has mostly come from, e.g. was it from existing GD donors (so maybe crowded out more funding for LICs), from totally new donors (and do those donors eventually also start giving to LICs?), etc.)

Henry Howard🔸

There are so many countries that GiveDirectly doesn't cover, so there seems to be a lot of room for other charities to pop up in these areas.

Gemma 🔸

Greater Change is a UK based org looking to run an RCT for the impact of cash transfers on homelessness

James Herbert

This doesn't really answer your question but there is a Dutch org with a very similar model to GD: 100weeks.

Michael Simm

There is one other Unconditional Cash Transfer organization I'm aware of in the EA world, although it's early-stage. It's called The Logical Foundation , and I started it over the past few years.

Sorry I didn't see this post earlier.

We have a very different focus and emphasis compared to GiveDirectly, so we don't compete with them for funding. GiveDirectly delivers aid to the poorest people in the world. Our goal is to help Unconditional Cash Transfers take market share from (and ultimately disrupt) conventional anti-poverty programs in the developed world.

Money does go much further in poor countries, so we work with GiveDirectly to get them funding that they can access. However, the vast majority of anti-poverty funding is restricted by the funding source to their local geography. We enable these funders to diversify into UCT's.

The thing about developed countries like the US or UK, is they don't have the same kind of opportunities for niche medical interventions that can outperform UCT cash benchmarks. But cash outperforms every conventional anti-poverty program, so we see an opportunity to massively raise the profile of UCTs and increase public exposure to Universal Basic Income.

Over time, we intend to make unconditional cash transfers and Universal Basic Income the default for philanthropy and government safety-net programs.

Also our goal isn't just poverty alleviation, we are very concerned about global job disruptions due to AI and Robots - and we think UBI would dramatically mitigate the chaos that will happen as exponentially more people lose their jobs, possibly preventing total social collapse.

(that's in an optimistic 'AI doesn't just kill everybody' future)

I'm happy to answer any questions, and I posted a longer (outdated now) case for our work on this forum a while ago.

Henry Howard🔸

I suspect another explanation, which is that there is a lot of skepticism about the effects of unconditional cash transfers. The debate about their effects, particularly long-term, is ongoing. E.g.:

https://blogs.worldbank.org/en/impactevaluations/givedirectly-three-year-impacts-explained

https://chrisblattman.com/blog/2013/10/25/and-the-cashonistas-rejoice/

Lots of serious people are waiting and watching to get more results from more trials and to make sure nothing bad happens.

Simon Stewart

KYC/AML, international payments and fraud avoidance are expensive and difficult. The market for UCT platforms is likely a natural duopoly or small oligopoly.

The Red Cross have committed to delivering 50% of their humanitarian assistance with cash or vouchers by 2025.