What if We Just Gave Them Money?

Did you get a chance to listen to or read the NPR story about fixing poverty? It was eye opening for me, and I keep thinking about it.

The title is: How To Fix Poverty: Why Not Just Give People Money? Here’s a paragraph from the article that will give you the basic idea of what it’s about:

Today practically all aid is given as “in-kind” donations — whether that’s food, an asset like a cow, job training or schoolbooks. And this means that, in effect, it’s the providers of aid — governments, donor organizations, even private individuals donating to a charity — who decide what poor people need most. But what if you just gave poor people cash with no strings attached? Let them decide how best to use it?

According to the piece at NPR, this kind of direct giving can be hugely beneficial.

Like you, I’m intensely interested in seeing poverty disappear. I remember getting goosebumps while watching Bono’s TED talk and hearing the predicted dates of when extreme poverty will be eradicated. Sometimes it feels like so many people are working toward this goal and it’s amazing.

Like you, I’ve supported what seems like a thousand buy-one-give-one companies (glasses, socks, meals, shoes, laptops, school supplies), and I feel no regret about that. I’ve spread the word, or supported kickstarters, about innovative products designed to improve the lives of people who are in poverty — devices that help find water or that clean water, devices that help generate electricity or harness solar energy — and I’d gladly do it again. I’ve bought scarves and jewelry and bags that help provide income — and I will continue to do so.

That said, if I’m honest, I much prefer the ideas presented in the radio program. If you want to help, give money instead of stuff, and let the people in need decide the best way to spend it.

It reminds me of a Q&A I was lucky to take part in, with women in a small village in rural Ethiopia. Before the Q&A, we were given a tour of the village and shown the evidence of assistance programs that were working. It was inspiring. And during the Q&A I had a lightbulb moment. I asked (through translators) what the biggest challenge these women faced. Their answer? At night, when they were sleeping, people kept trying to steel their goats.

Stolen goats?! I was so surprised to hear that was their biggest challenge. It was a problem I wouldn’t have known existed, even if I had hung out in the village for days. And it was a life-changing reminder that an outsider can never know how to help as much as a community member does.

What are your thoughts on this? When helping others, would you prefer using your funds to buy people products or services? Or would you be okay giving them the money directly and letting the recipients decide how to spend it? When people are in the giving position, I know the instinct is to prevent money from being wasted. We wonder: Will the recipient use it to buy drugs? Will they gamble it away? Will their spouse steal it from them? And it sometimes feels “safer” to do the spending for them and give them products instead of cash. But is it more helpful?

Do you think our giving efforts could ever switch to mostly giving people money? It seems like non-profit administrative costs could almost be eliminated if we switched. In my head the whole idea seems much more efficient, with potential to be much more effective. What do you think?

 


Credits: Photos by Karen Walrond for ONE.org, from my trip to Ethiopia.

33 thoughts on “What if We Just Gave Them Money?”

  1. This is really thought-provoking. Currently in Salt Lake City, there has been a major effort to eradicate or at least minimize homelessness and drug use in the downtown Rio Grande District. It’s been a multi-agency effort and it’s only beginning. The mayor of SLC, a very liberal mayor for Utah, told news outlets that people shouldn’t give money to the homeless. They are finding it increases the drug usage problem and the money could be used for better resources. So I wonder where we draw the line of giving money and not giving money.

    1. Totally, it brings up so many questions. If we’re thinking of poverty, should we separate drug addiction (which can happen in or out of poverty), and homelessness (which is commonly connected to mental illness)? We know poverty can occur without these factors. Is that where this type of giving would work best?

      1. My friend who is a police officer recently enlightened me about the difference between the transient population and the homeless population, which is part of what you are bringing up. Poverty, homelessness, mental illness, addiction, transience are often overlapping issues but require different solutions. I have definitely switched over to giving money to charitable organizations rather than goods (no canned food drives, just money to the food bank, etc.) The money can be used more efficiently and effectively. Looking forward to hearing others’ comments on this!

    2. Here’s what a homeless friend of ours told us. When you give a homeless person $1, that means a coffee at McDonalds. Which means you can stay there 2 to 3 hours before you’re kicked out. Which means getting out of the cold in the time between when shelters close (about 6 a.m.) and when public libraries open (about 10 a.m.).

      So as he put it, would you rather give that panhandler a dollar that gets him out of the freezing street for a few hours, or choose not to do so for fear he might spend the money on drugs or alcohol? Even if 1 in 4 does that (for instance), are you comfortable deciding the other 3 should stay out in the cold just so you can feel sure you didn’t support the 4th guy’s addiction?

      There’s also C. S. Lewis’s remark about this, which I find persuasive: somebody told him not to give a beggar money because “He’ll just drink it,” to which Lewis replied, “If I keep it, that’s most likely what I’ll do with it anyway.”

      1. I really appreciate Anna’s comment. We give money to homeless people we encounter and also give to shelters and food pantries. There is nothing that says what I do with those dollars is superior or more worthy than what they might do with it and I always really hated that line of thinking. I’d much rather take my odds that someone is more comfortable, rather than worrying they aren’t doing what I think they should be doing.

  2. I wonder if part of the issue is that in many countries where poverty is a predominant issue, the governments are also unstable or corrupt. If stolen goats are an issue, how would you ensure that actual money would in fact stay in the hands of those who need it, rather than being usurped by those in power (or who wish for power)?

  3. I have not listened to the story yet, but I supposed the first thing I wonder is, (as one likely wonders with most aid organizations), what if the money falls into the ‘wrong hands?”

    I love your anecdote about the goat stealing – it’s a great example of people knowing for themselves exactly what is needed – but, were you to give cash in that situation, say, to build fences or barns, who decides who gets the money? How do they distribute it? What if people take advantage of them? Rob or worse harm them for it? What if people begin to in-fight because of it?

    Maybe the advantage of goods, rather than cash, is that cash brings out our worst natures. Or maybe I’m totally wrong, having never lived with that kind of poverty. Nonetheless certainly a captivating idea.

  4. Having worked in International Development, I see so much truth in this. The bottom line is that too many major international NGO’s (and government orgs too. . ) invest millions of dollars from a top down, prescriptive level. Having spent a fair amount of time sitting through community based “needs assessments” i can tell you that most poor people know exactly what they need to lift themselves up a bit higher. (This is part of the reason why micro-lending programs like Gramean Bank and Kiva have been so important.) way too much money is spent on things that people do not want or need, or worse, cannot maintain. (There are a few large Water NGO’s that get criticized a lot for putting expensive wells in isolated communities but providing no contingency plans for how to maintain and upkeep the wells once they are installed. So many fail nearly immediately and never serve the communities they were intended for. But I digress!

    All of this is done with the best intentions, of course. But honestly, a lot of money is spent on the salaries and overhead for large staffs of Ivy League educated, idealist youth who want to save the world, but want to do it on their terms. So yeah, just giving money makes a ton of sense in some ways to me. Eliminate overhead, go directly to the people who need it most.

    YET the bigger topic that is so rarely discussed is that the real reason so many people lie in poverty across the world is OUR FAULTS. Our entire standard of living, as middle class consuming americans, is dependent on this oligarchical economic structure. There will be no “ending poverty” as long as we continue to demand the comfortable lifestyle of consumption that we are currently accustomed to. And we do have to begin to own that.

    Jumping off my soapbox now!

    xo.

  5. The first thing I thought of when reading the story was a few years ago during the recession when our household income was cut in half because our employer decided to cut wages rather than lay people off. Yes, a better decision collectively but still hard for a few years. My wealthy MIL would buy my kids random stuff for holidays…stuff we either didn’t need or didn’t quite work for what we needed, etc. and she wasn’t open to suggestions. Even though it was in relatively small increments of $25ish dollars, I so much would have rather have had the cash to be able to acquire what my children actually needed.

    For the broader discussion, poverty should be separated from homelessness and drug abuse. As a child of college educated parents money was still tight growing up. I know that poverty doesn’t automatically come with the stigma of drugs and such that people seem to attach to it or find a way to justify why that person is poor. (If only they would …… then they wouldn’t be poor.)

    It sounds like GiveDirectly has found a way to do just that…give directly to people who need it instead of working through government. I can’t quite find the right words for this but here it goes: questioning if the people receiving the money know what to do with it or will start fighting about it seems kind of patronizing like we are questioning their intelligence in knowing what their families need. Imagine if my employer questioned if I knew what to do with my paycheck.

  6. Such good thoughts here. We hesitate to give people money because we think they won’t spend it right–how patronizing and proud. I’m guilty of this! I remember giving money to a close family member who I know is not always good with money–but she spent it on needed medicine. We don’t need to be proud and think we’re better than others and know what they need–we can just help more with no strings attached and trust them to make good decisions. Or we can give them money and help them learn how to spend that money wisely if that’s a problem. While sometimes we need to exercise a little bit of judgment–like not supporting an addiction–but sometimes we just need to stop judging others.

  7. I support two kids through Compassion and every year we give their families an extra amount of money as a gift. No percentage of that gift is taken for administrative purposes and we then get a letter and a picture from the child showing us what they bought with it. Sometimes its food, or new shoes or clothes for all the kids, but mostly its large items like a mattress, a kitchen table and chairs, a pantry, a bed frame. I like the part that they can pick what they truly need with that cash.

  8. I think all of these concerns about giving money are completely legitimate (and I have some of those thoughts myself), but I also can’t help but think of what my husband reminds me every time someone says “but what if they use it to buy drugs”? Here’s the jist:

    “It is more blessed to give than to receive.” God didn’t ask us to “give, but only if you know they won’t use it to buy drugs or alcohol or they don’t have a spouse or family member who steals or a corrupt government or…whatever else” He asks us to give for US. To give joyfully and freely. Giving is about the person who receives it, but it’s also about you. You should also be thinking about YOUR heart. Are you just making excuses so that you can hold on just a little longer to what you have? Obviously you should give wisely and thoughtfully, but in the end, you just have to let those thoughts go.

  9. This is an interesting thought. After many years investing in a marginalized city 10 minutes away from my wealthy suburb, my family relocated to this marginalized area. We loved the people and we wanted to be their neighbors. One thing that I find for those who live in poverty is that they have a reactionary not proactive mindset. Rightfully so since they are living from paycheck to paycheck. If one expense pops up, then it can derail everything. So, one thought that popped in my head while reading your post was the thought of giving money seems great in theory and may help in the short term for survival but may not help them for the long term. This recommendation assumes the recipient knows how to mange their money and that may not be the case. Obviously this is a blanket statement and does not apply to everyone living in poverty but nonetheless this has been my observation. As you mentioned investing in the one for one campaigns, you also invest in the dignity and self worth of the individual creating the craft. Giving money does not create that self worth. Again, not saying not to do it, my husband help plenty in our community but I think you need to understand that their mindset may be different and as a result they may not spend their money in a way that you expect them to spend it.

    1. It’s a wonderful thing you’re doing there. The lack of resources (money or things) is only one part of the root of poverty. The others are,
      – Lack of knowledge – positive change is difficult when we don’t know better ways of doing things
      – Hurts, habits and hangups – these can hold us back from our full potentials
      – Lack of support – positive change is difficult without encouragement and support of others
      – Opposition – it’s difficult when others are against our effort – crime, discrimination, corruption, injustice.
      – Environmental – drought, lack of clean water, disease

      They are a mix of internal and external factors. Both have to be address to have lasting change. Coming along side someone and doing life with them is a courageous way to make lasting change.
      Kudos to you.

  10. My husband read a book review about this problem a few years ago, which got us into doing micro-loans through Kiva, where the idea is exactly that: let’s ask people what they actually need and want to get themselves out of poverty and give them the money for it directly. Most of our loans have been repaid, and then we loan the money to someone else. Helping choose who to loan to is a fun way our 5-year-old can help participate in giving, too. It’s usually something pleasingly concrete like buying 10 chickens to start an egg business, or a cell-phone to let other villagers make calls on for a fee.

    1. I also highly recommend Kiva. I love the loan structure, and I love being able to give someone what they feel they need to be successful. Our kids have also been able to be involved, and it feels very tangible.

  11. Having worked in social services for much of my career, I am a big supporter of just giving money to people in need, no strings attached. There is so much administrative overhead in giving aid and social services, so much oversight, so many rules on what benefit can be spent on what items, and on and on. Think of food stamps for instance: we don’t trust adults to make decisions on what food they can buy for themselves. It’s patronizing; it creates confusion at check out time; and it comes with stigma and rolled eyes. It’s not how we can best help people.
    It’s similar with donations. Sure, it’s nice to be able to distribute shoes, coats and other items to those in need. But have you ever had to sort through items used and new? It’s so much work and time. We have to match the item to person. I would venture to say that we spend more money on resources to distribute in-kind donations than would be “wasted” through fraud or sub-par purchasing decisions. I don’t mean to discourage in-kind donations, but rather stress that money is better.

  12. This reminds me of my friend who, when she was asked why she always gave money to whomever begged for it, she replied, “Because they need it.” When the follow up suggested they may use it for drugs she replied, “I cannot control that. Besides, we *all* have our addictions, some worse than others true, but if I give this person an opportunity to choose for themselves what they need most at this time, perhaps they will choose what *I* wish for them, or perhaps they *will* use it to get through one more ache. If I help perhaps that keeps them from stealing from someone, and in the long run, isn’t that better than adding “thief” to their list of problems?”

    I remembered this as I stood in line at a gas station/mart behind a man debating to buy diapers or cigarettes. He put back the cigarettes and mumbled under his breath. I could see he was extremely stressed. (Who buy gas station diapers?) I asked him if he needed some help, and he grunted at me “No”. I asked him again if I could buy his cigarettes, he replied “Thank you ma’am, you’re not from here are you? (I was in Utah, a “Mormon” state where smoking is pretty frowned upon.) I said, “No, but I am against smoking no matter where I am. No one smokes in CA. (not true, but it’s frowned upon here too) But I had parents who smoked and I know how stressed they can get without a cigarette. I’ll but you these if you promise me to not smoke in front of your kids.” He agreed, and we parted ways.

  13. I really loved this story when I heard it on NPR. A couple of additional points are worth mentioning I think. The money is deposited directly into the recipients’ bank accounts, minimizing the risk of theft or corruption, and the program is giving a set amount every month for 12 years! That was a amazing component of the story for me. It is providing a reliable source of income for these people for a long time. One man highlighted was putting the money towards starting a business with the goal of paying for his children’s schooling; another was disabled and had not been able to afford furniture for his home thus depriving him of being able to socialize. Such diverse uses for the money and yet so vitally important for each. And with none of the patronizing that ( intentional or not) comes with so much aid from the West.
    Thand Gabby for highlighting this story.

  14. My brother has recently become a huge supporter of basic income. The idea is essentially this: every adult in a country receives a basic income (supporters of the idea in the United States generally support an income of at least $10,000 a year). This is theirs to use however they want on whatever they want and replaces other forms of welfare. There are no strings attached and no requirements to receive it- every person, regardless of their otherwise earned income gets it. I have to admit at first I thought it was silly- why should the government give that kind of money to people who don’t need it. But I’ve been warming to the idea. Think of it: you’re a new mother/father and want to stay home for a couple years but can’t make it work financially. Or you’ve been wanting to start saving money in order to start a business. Or you lose your job right after you purchased a home or while your kid is in college. Or you simply are struggling to make ends meet. So many of these situations could be helped by a system like this.

    1. Such an interesting idea! I’ve never heard of it. In many ways, we are all benefitting from this kind of model- taxes supporting schools, roads, etc. that we use in our communities. How interesting to add a basic cash income component.

  15. I live and work in Ethiopia- managing program development for a massive NGO working on both development and humanitarian projects. The pendulum is definitely swinging towards more cash-based aid. Cash has many benefits- including lower transaction costs- more of the funding ends up in the hands of beneficiaries when you don’t have someone buying supplies, collecting quotes, storing goods, transporting them, monitoring their use etc. However, it’s not necessarily a silver bullet for all scenarios. For instance, we are responding to a massive drought in Ethiopia where most livelihoods are based on livestock or farming. Cash is a go-to response mechanism but it can also greatly distort markets and lead to a worse situation for everyone. I don’t think we’ve figured out all the answers here, but it’s certainly an interesting time. There are also other populations, like youth, who seem to do better with savings programs (and receiving a small stipend for attending training) rather than cash transfers. There’s a lot to think about in this arena, but it’s certainly an interesting time as many cash-based interventions are being piloted in developing countries.

  16. Such interesting insight in these comments! I would add that giving cash directly, while helpful and empowering, can’t be all we do. If we don’t work to change the structures in place that make nutritious food so expensive in economically depressed areas, rent and living expenses so high, quality childcare so hard to find and expensive (just a few examples), the cash donations will not make a lasting change in our system. Let’s support people directly and let them decide what they need, but also use our privilege to work to change the fundamental structures that keep communities economically depressed for generations.

  17. I have just come back from Northern Ghana where I saw how a lot of NGOs, foreign aid and microfinancing loans work in the communities that they are supposed to benefit. The concern about simply giving money is that it does create dependency. They discovered in Northern Ghana that microfinancing loans do not work because they it is still considered foreign aid and therefore repayment just wasn’t happening. They have switched to a Village Savings and Loans (VSLA) model where the people in the village pay into the fund themselves and can take loans from the fund and then pay interest upon repayment. Every 12 months, there is a payout to shareholders. This has empowered communities, loans get paid back and the interest is shared among the shareholders. It has been hugely successful.

    I worked with an NGO that is all about youth empowerment and engagement (youth in Africa is defined as 18-35). Through their work, each community has a place for youth to meet (Youth Centers), they have a program that provides youth a platform to express their voice through radio and social media, and they teach the youth how to engage their stakeholders through detailed action planning that will enable the communities to get what they need. Sustainability is built into all programs so programs can continue without dependency on external funding or aid. The success the youth have had is enough for all people in the communities to have buy-in to the programs.

    The capacity for change is already within the communities – not just about being able to identify what they need but also to work towards where they want to go. Believe me, they are not “just happy” living in poverty conditions and are perfectly able to navigate the systems that keep them there; they just need education, knowledge and support to be able to accomplish what they want to.

    Where the west would be most useful, as I see it, is in working towards empowering the people of Africa to move out of the colonized mindset. Much of poverty in the world today is entirely due to colonization and the co-opting of resources to the sole benefit of the Global North. The crucial part of decolonization is holding multinational corporations and colonialist governments to account and ensure that if they are moving resources out of Africa, that actual realizable revenue stays in the country so the people in those countries can benefit from it. Less than 5% of revenue from resources actually stays in Ghana and much of that is used to service foreign debt. Just giving money is not enough. It is tokenism at best.

  18. Hi! This topic is very interesting. I’m a teacher in a public school in Brazil. In here we a have a program that is called “bolsa família”. People in this program receive money (a small amount – around 20 dolars per kid, i guess)from the government. The amount of money depends on how many children do you have and how much money do you make. This program has some conditions. All of your kids must go to scholl and take vaccins, this kind of stuff. Many specialists in economy say this program is good for economy. The money is spent inside the communities and favelas in small business. Because of bolsa familia millions of people in Brazil escaped from poverty. Unfortunatelly, our country is going through a big crisis and economic recession caused by A LOT of corruption. So all of the improvements may be lost. I hope what i wrote makes sense! I can understant english, but is really hard for me to write in this language. :)

  19. Lilly Bekele Piper

    As an Ethiopian-American International Development specialist (education) that has worked and lived in East Africa for the last ten years and who has faithfully read your blog and enjoyed your work for many years, my main takeaway from the article and photos was: Here we go again. Ethiopia is being made synonymous with poverty. The images, while striking, don’t show the world the depth and beauty of what the country and people are. We are framed, once again, as poor and helpless instead of proud and dynamic. Unintentional perhaps, but a tired narrative that is reinforced, nonetheless, by well-meaning and kind people. I would invite you and other bloggers to dig deeper for different stories about these communities and countries and perhaps you’d be delighted by what you’d find. And for me, its a wake-up call to go ahead and start my own blog already! Thanks for listening…peace.

  20. A simple thought: when you use the example of giving to those who live on other continents, I think, “I don’t know anyone who lives on that continent who would be able to pass that money on.” The websites that provide goods and products and devices imply that they know people on that continent who make those goods, who will use those devices, who need those products.

    I don’t have an email address of someone in Africa, and I don’t have a bank account number of someone in Africa who is not a spammer. I think most of us would give money directly if we knew how.

  21. I certainly don’t have the answers, but I have experienced both giving directly to a family in Africa, as well as, supporting a medium-sized and a large NGO. I have been on-site in the countries of each NGO I supported. There are pros and cons to each option. I must say, the infrastructure that the NGO’s bring to communities have a tremendous impact. I also know that direct giving lifts families living in poverty.
    Is there not room for a multifaceted approach?

  22. If I’ve learned anything through public radio pledge drives, it’s that money is better than things, and money given at a regular interval that can be counted on by the recipient is even better. An article in my local paper recently emphasized how food banks use so many volunteers and volunteer hours organizing and moving around donated food. Think about it, if your school or workplace collects 1,000 lbs of food, good job! But that has to go somewhere and takes up space, fuel, etc. The crux of the argument was that people doing the giving are more gratified by a box full of food they can physically hand over than by writing a check. It’s tangible. But employees at food banks can easily negotiate with wholesalers far lower costs than what we pay for food we plan to donate at the store. It’s less of en experience than a canned food drive, but it helps so much more to just give money.

  23. Thank you for sharing this! It is something to ponder, and it does speak to our wanting to control our benificence.

    I continue to be struck by the experience my parents had working with their church’s twinning parish in Haiti. My parents and several other parishioners went to Haiti to work with the Haitian parish to get things going for a water purification system to help alleviate the cholera devastating the community. My father had worked in water treatment and county water authorities for years; he knew his stuff, and came prepared to help figure out what they needed. He even bought a nifty GPS gadget to help with calculations. They got to the village, and they met with some of the residents, including one man who was an engineer – with the same GPS gadget as my dad. As they talked, my dad and the others realized that the village didn’t need their knowledge and expertise; they already knew what they needed. They had the system planned out, knew what kind of materials they would need, where it would go – everything. They just didn’t have the money.

    My parents and the others went back to our parish in the US, and shared with the priest their story and argued for sending the money. The priest balked; the diocese balked. They couldn’t believe that the Haitians knew what they were doing, that they would use the money “wisely,” that buying the supplies for them wouldn’t be better. They dragged their feet for almost a year. Meanwhile, people in the village kept dying. My parents and the others who had gone to Haiti were furious. But the funds did eventually get sent, and our Haitian brothers and sisters there have a water system!

  24. I give cash and occasionally fast food gift cards to the homeless when asked and oftentimes when not asked (when it’s a Mom and kids, I’ll pay for their meal anonymously). Last Summer my sister bought $200 worth of fast food gift cards (in $10 increments) and handed them out at stoplights to individuals stationed on the highway dividers with signs asking for help.

    Don’t waste a second wondering what they’ll spend it on. There but for the grace of God go I.

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