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freedom odds and ends

Give directly, a great new charity

A little while ago, Tyler Cowan put together the principles of the ideal charity. You give money directly to people, that money has no strings attached, and they shouldn’t expect it. Giving directly reduces the non-charitable cost aspect of the donation. All charities have overhead, giving directly minimizes this. If the people arent expecting it, you have a much better chance of avoiding scams and corruption diverting the charitable donation.

It’s the second part that is so important, and it is also the part that so many people have problems with. Economists call things like food stamps, vouchers, etc. as “gifts in kind” and it has been known for a long time that they aren’t a very good way of giving aid if the primary aim is to help people. Poor people are like anyone else, they need money for different things. When you give cash, they can apply it to whatever their most urgent need is. It might in fact be food, but it could just as easily be paying off debts, legal help, maintanince, or even investing or savings.

“But they might spend it on drugs or prostitutes!” Yeah, they might. A former professor summed up that attitude with the sarcastic comment, “Oh, I like the poor, but I don’t trust them!” If we want the poor to get better, and if we want to help them, we have to allow them to make their own decisions and use money the way they need to. A more practical aspect of having no strings on the donation is that it saves the cost of monitoring them and enforcing the rules. The primary aspect of no strings donations should always be respecting who you are giving money to, it is supposed to be a charitable at after all.

GiveDirectly is a new charity based on these principles. They are working in Kenya right now because of the easy and inexpensive system for distributing cash via sim cards in place there. They are claiming a 90% effeciancy for donations. I am going to start using these guys for my monthly charitable donations along with my microfinancing thing thorugh Kiva. They are brand new, so there isn’t much information on the progran just yet, but I am willing to give it a try. I encourage you to do the same if you want to give aid directly to recipients!

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