There's a charity called GiveDirectly that just gives money to poor
people in Kenya. No strings attached. People can spend the money on
whatever they want, and they never have to pay it back.
idea behind this is straight out of Econ 101: Poor people know what they
need, and if you give them money, they can buy it. But many people in
the charity world are skeptical of what GiveDirectly is doing. They say
people will waste the money or become dependent.
traveled to Kenya to see how the program was going. We talked to a man
named Bernard Omondi who used the money — $1,000, paid in two
installments — to buy a used motorcycle. He uses it as a taxi, charging
his neighbors to ferry them around. Before he had the motorcycle, he
says, he sometimes worked as a day laborer, but often couldn't find any
work at all.
We talked to several other people who started
small businesses. One family bought a mill to grind corn for their
neighbors; another started selling soap and cooking oil.
the people who got money from GiveDirectly lived in mud-walled houses
with grass roofs. Many of them spent part of the money on metal roofs to
replace the old, grass roofs. As it turns out, grass roofs are not only
leaky, they're also oddly expensive: They have to be repaired several
times a year, which requires buying a special kind of grass. Buying a
metal roof costs more up front, but it's cheaper in the long run.
uses a Kenyan mobile money system that makes it cheap and easy to send
money to anyone with a cellphone. (The group gives cheap phones to
people who don't already have them.) Mobile money is spreading to other
countries, and the people who started GiveDirectly think giving cash
could become one of the major ways people in richer countries help
people in the developing world.
If giving cash does prove to
work, it will raise an awkward question about some of the other
charities out there: Maybe they'd do more good if they took the money
they're spending and just gave it to the poor.