When we set out to build GiveDirectly, we hoped not only to shift resources and decision-making to those in extreme poverty but also to increase the effectiveness of the sector as a whole. The effective altruism movement and organizations including the Centre for Effective Altruism, GiveWell, The Life You Can Save, and many others have made tremendous progress in doing precisely that –– often starting with the question of whether a program does more “good” than people in poverty could do for themselves if they were just given the money.

Since 2015, GiveWell has underscored this move towards greater efficiency and impact by only recommending interventions that they estimate are at least as good as cash transfers. This week, GiveWell announced that they’re updating their “top charities” cutoff: going forward, an organization must have unfunded programs they’ve “estimated at 10 times as cost-effective as unconditional cash transfers” to be included as a top charity. As a result, they’ve now reduced their list of top charities to 4, of which GiveDirectly is not included. To be clear:

  • GiveWell’s update does not reflect a change in their view of either cash or GiveDirectly: “This does not reflect an update to our view of GiveDirectly…GiveDirectly is one of the strongest programs that we’ve found in years of research and we continue to have a very high view of their work.” (GiveWell summary)
  • Nor does it reflect a change in their recommended giving allocation, as GiveWell has not directed marginal funding to GiveDirectly since 2015.
  • It’s possible that GiveWell could recommend GiveDirectly again in the future — either because they increase their estimate of cash’s effectiveness (e.g., by incorporating recent research on the multiplier effect of cash) or because they expect to direct more funds and lower their cost-effectiveness threshold as a result (currently 10x, previously 6x and 8x this year and last).

Nonetheless, it is a good opportunity to discuss our views and where they align and differ from GiveWell’s.

GiveWell’s top charities are exceptional opportunities

Simply put, we have enormous respect for GiveWell and think their evaluations are among the most thoughtful and comprehensive in the space. The outcome of these evaluations is a list of some of the most effective interventions and NGOs in the world, which we would also like to see funded.

Who should decide what people in extreme poverty most need?

If your answer is not “those people,” you need some process for deciding what outcomes matter most, and which programs produce those outcomes most cost-effectively. GiveWell does this with their cost-effectiveness analysis which incorporates the values (or “moral weights”) of GiveWell staff, donors, and a survey of people living in Kenya and Ghana, alongside estimates about cost, program details, and other factors. 

Ultimately, this results in a spreadsheet. This framework combines the views of a relatively small number of stakeholders and then applies those outcomes to millions of people.

GiveDirectly believes that the weights that should count the most are those of the specific people we’re trying to help. Each individual will have their own specific needs, preferences, and aspirations. We have yet to see a place we worked in (village, county, country) where everyone made the same investments, so why prescribe the same solution for everyone? Why not treat each individual person living in poverty as exactly that, respecting their individuality and allowing them the dignity of pursuing their own goals?

Discussion of empowerment is not new, and most of the aid sector agrees that it’s important. However, it often takes the form of “consultation” or “participatory processes,” not real decision-making power in the form of real money. People in poverty have largely been denied an actual say in the process of development, instead having to accept others’ opinions about fertilizer, job skills, or whatever the latest theory of change has deemed most important for their lives.

As we write in our values, we try not to impose our preferences or judgments on recipients; instead, we aim to respect and empower them to make their own choices, elevating their voices in the global aid debate. This comes at a potential cost, as it means that neither we nor donors get to set priorities (and we may even lose some “efficiency” in providing this option). Still, this value is core to GiveDirectly’s identity as the first organization exclusively devoted to putting the poor in control of how aid money is spent.

What’s the strategy? Are you optimizing for GiveWell’s expected funding or the entire aid sector?

GiveWell and GiveDirectly share the goal of improving sector effectiveness and simply differ in strategy. 

GiveWell is a charity evaluator with the stated goal of “finding and recommending a small number of outstanding giving opportunities to help donors save or improve lives the most with their gifts.” As one of the largest private funders in global health and development, they’ve made a huge difference in the lives of millions and been a positive influence in the sector. Their priority is to maximize the impact of the funds they direct from donors (~$500M in 2021), so they choose cost-effectiveness cutoffs based on the amount they expect to move. 

But there’s a lot more money at stake. Official development assistance is $178B a year, and U.S. charitable giving alone is another $484B a year. Recently, Mackenzie Scott gave away $4B in 9 months, and Elon Musk debated how to use $6B with the head of the World Food Programme. We want an approach to giving well that has answers for budgets at these scales.

GiveWell would say they’re focused on prudently allocating the money they expect to direct, and if they received even more funds, they would figure out how to allocate those well too. We expect that they would. But GiveWell is not just any other donor — it is the premier, trusted voice on how to give. Structuring GiveWell’s recommendations only around the funds they expect to direct, at best, says nothing about the vast majority of funds that could help people living in extreme poverty. At worst, it suggests these funds can’t do much good.

Cash transfers offer a unique opportunity: they’re one of the most cost-effective tools we have and the only intervention that can scale massively to reach the nearly 1B people living in extreme poverty –– reaching them where they are and letting them put funds towards their diverse needs.

We have an intervention that is scalable, the evidence that it works, and the resources required to improve hundreds of millions of lives. Let’s take the opportunity. 

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