Joining Nate Silver and Matt Yglesias for GiveDirectly

The power of cash transfers for upward mobility

This Giving Tuesday, we’re partnering with Nate Silver and Matt Yglesias to raise money for GiveDirectly, an organization that provides direct cash transfers to the people who need it most. Donate to GiveDirectly.

Will you help raise $350,000?

You may remember GiveDirectly from our joint article with them about what America can learn from Kenya about fighting poverty in communities. Now, GiveDirectly is sending cash directly to 335 families in two different towns in Rwanda. Most of the families there are living on $1 to $2 per day. Last year’s campaign directly helped families secure housing and build savings to prepare for the future.

If just a quarter ofAmerican Inequality readers gave $50 each, that would be more than half the goal!

At American Inequality, we consistently talk about the power of data and how effective cash is for fighting inequality. We cannot change what we can’t see. Measuring the efficacy of our programs and targeting at-risk communities is essential to promoting opportunity. At the same time, we can’t hamstring people to spend money on the things that we want them to spend money on. Healthcare emergencies arise, and you can’t use a housing voucher to pay the hospital bill. School starts back up, but food stamps can’t buy new notebooks. Cash instead gives people the liberty and capability to make financial choices that can boost their mobility.

GiveDirectly puts people, data, and cash at the center of their efforts. Their studies have found that unconditional cash transfers to the world’s poorest can:

• More than double incomes

• Increase school enrollment and entrepreneurship

• Decrease skipped meals

• Decrease illness and depression

• Cut domestic violence by one third

• Does not decrease hours worked or increase spending on temptation goods like tobacco and alcohol

How Rwandan families spent the funds raised last Giving Tuesday

Cash transfers are near and dear to our hearts at American Inequality, which is why we are excited to be partnering with GiveDirectly on this GivingTuesday.

Direct cash transfers also reflect something powerful about opportunity and inequality globally — where you are born makes a huge difference in life outcomes. We do not choose where we are born, but growing up in Nyarutovu, Rwanda or Flint, Michigan or Brooklyn, New York is going to make a big difference in your earnings, your life expectancy, your education, and your overall health. But moving money across those regions, particularly globally, can be really challenging. GiveDirectly is one of the first companies to make this possible at scale through mobile payments, regional visits, knocking on doors, and community partnerships. Place based support is so critical because location can make all the difference between poverty and prosperity.

Giving people money is easy

In last year’s joint post with GiveDirectly, Matt Yglesias summed this up well:

For those of us who are privileged to live in the richest societies in human history, I think it’s important to know that meaningfully improving someone’s life is actually really easy.

You can literally just click on a link and send money to someone who really needs it and have very high confidence that they, and their neighbors, will be better off as a result.

You don’t need to puzzle through complicated optimization problems, you don’t need to figure out how to solve all the world’s problems, and you don’t need to spend your time doomscrolling and virtue signaling. If you would like to spend all your non-work hours just hanging out and having fun, and just click a link once a year to send a decent sum of money abroad, you are probably doing a lot on net to make the world a better place.

I like this take a lot.

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If you want to understand how cash transfers work in a US context too, check out the joint article I wrote with GiveDirectly’s Dustin Palmer. It includes a conversation we had with Stockton Mayor Michael Tubbs who oversaw one of the most significant cash transfer programs in US history.