GiveDirectly’s Life-changing Cash Transfer Program
One of the Top 20 Most Influential Projects of 2024
For implementing a first-of-its-kind direct money transfer program to the world’s poorest
Region: Sub-Saharan Africa Sector: Mobility UN SDGs: 1, No Poverty; 10, Reduced Inequalities
GiveDirectly made headlines when it began experimenting in 2016 with a form of international aid called unconditional cash transfers. The idea was simple. Distribute lump sums of cash to individuals in extreme poverty, which they could use as they deemed best. But it was also radical because it challenged traditional philanthropic models of support for the world’s poorest people.
Most aid is distributed either based on merit (Who deserves support?) or with strings attached (What does the recipient have to do to prove they will use the aid “appropriately”?). The GiveDirectly team wanted to observe the outcome of giving money to the world’s poor without assessing a recipient’s “worthiness” or placing conditions on how it was used.
The organization’s leadership understood the public would be skeptical, so it made research a central part of its operations. It didn’t take long for studies about its work to substantiate what GiveDirectly staff suspected — unconditional cash transfers work. People used the money wisely. Many invested the funds in entrepreneurial projects that could boost their income. Others made household purchases that vastly improved their quality of life, such as an appliance that reduced household labor, or livestock or seeds, which could help feed their family. The fears that some critics harbored, namely, that at least some recipients would spend the money on vices or frivolities, were proved to be baseless by the study results.
But even a robust body of research didn’t fully help GiveDirectly address resistance to the model. “There have been a lot of studies of cash transfers that prove their viability, but when you take these studies to government, they will say, ‘Yes, great, but that’s in Kenya. The local context is different,’” says Richard Nkurunziza, GiveDirectly’s senior manager of programs. Nkurunziza, whose role is largely project management, had to help the organization identify how the cash-transfer program aligns with goals and strategies already established by governments.
Based on initial findings and, over time, more research across multiple countries, the nonprofit decided to launch an even more audacious project in 2023, taking the unconditional cash transfer idea from the community-level to a country-wide scale. “We asked, ‘what does it take to lift a country out of poverty as a whole?’” says Nkurunziza. That country was Rwanda, where the organization distributed large, unconditional cash transfers — $21 million USD during the course of 2023 — to 25,000 families. “It’s an ambitious project,” he says, and it’s the first time that GiveDirectly has taken its idea to a country-wide scale.
Angelique and Dominique in Rwanda
The purpose of the project, says Nkurunziza, is to swiftly and effectively lift Rwandan families out of extreme poverty. According to GiveDirectly, 3.9 million adults in Rwanda live below the international poverty line, defined by the United Nations and international relief banks as $2.15 USD per day. The organization estimated that it would take a minimum of $3.6 billion USD to lift the country out of poverty — a sum that amounts to $1,100 for each adult. “$3.6 billion sounds like a lot,” Nkurunziza says, “but it’s not when you’re trying to lift an entire country out of poverty.”
The unconditional cash transfer project in Rwanda centered recipients, extending them the trust and dignity to best choose how to improve their lives with the cash. GiveDirectly’s Rwanda team worked closely with local and national governments and village leaders to roll out the program in line with their development goals. “The only condition [to receiving the cash] is that you fall below the poverty line,” Nkurunziza explains. “We opt for saturation, covering an entire village, so we aren’t making decisions about the [relative worth] of one family or household or another. We approach our work from a point of view of do no harm.”
His colleague, Nathalie Bintu, GiveDirectly’s external relations lead, adds that one year into the project, GiveDirectly is seeing a big pay-off. “We’ve already started observing outcomes: improved health, massive drops in food insecurity, and a general ability for recipients to meet basic needs,” she says. Nkurunziza agrees, “Cash transfers impact so many other areas: child mortality, gender equity. Cash transfers are respectful. They provide agency. They are unconditional. And they’ve been proven to work.” Bintu concludes that “if we can do this at the national level successfully, we can do this in other countries.”
*Francoise and her son in Rwanda featured on the header