Connect with UPR:
Planet Money
2:54 pm
Fri August 23, 2013

Cash, Cows And The Rise Of Nerd Philanthropy

Originally published on Fri August 23, 2013 7:12 pm

For more of our reporting on this story, please see our recent column in the New York Times Magazine, and the latest episode of This American Life.

This morning, we reported on a charity called GiveDirectly that's trying to help poor people in the developing world in an unusual way: It gives them money with no strings attached. This is a somewhat radical idea in the charity world.

Most charities, of course, get money from donors and spend it on things they think will help people. They build schools, provide medicine or give people cows.

When we were in Kenya recently, we visited a village where people had been given cows by a group called Heifer International. And, we can report, these were very impressive cows. They looked strong and healthy.

And, like lots of charities, Heifer also spends money to provide training. Working with another group called Send a Cow, Heifer teaches people to make sure their cows get the right nutrition and to keep detailed logs tracking milk production. People visited the village to make sure everything was going well. And all this really helped. One woman told us her cow produces 15 times as much milk as local cows — and she sells most of the milk.

That's a traditional charity. GiveDirectly, on the other hand, takes money from donors and just gives it to poor people. (For more on how GiveDirectly works, see our story from this morning.) This is something of a challenge to other charities. Paul Niehaus, one of the group's founders, is pretty blunt about it.

"We would like to see organizations make the case that they can do more good for the poor with a dollar than the poor can do for themselves," he says. "And I think some may be able to make a convincing case. But if you go to the websites, today I don't think you're going to be seeing that argument being made. Nobody even bothers."

Neihaus says charities should be clear about how much they're spending and how much it's helping. And to figure this out, he says, charities should do actual experiments. In GiveDirectly's case, independent researchers are conducting a randomized, controlled trial. Basically, there are two groups of villagers. One group gets money, the other doesn't. The researchers do a detailed survey to compare the two groups and see what difference getting money makes. The results from the study are due out later this year. And they'll be made public.

If you were trying to compare giving cows and training with giving cash, you could take the same approach. Give people in one village cows and training; in the next village over, take the money you would have spent on cows and training and just give it to people.

Not surprisingly, Niehaus loved this idea. We called up Heifer International to see what it thought, and we talked to Elizabeth Bintliff, vice president of Heifer's Africa programs.

"As an African woman, that sounds to me like a terrible idea," she said. "It sounds like an experiment, and we're not about experiments. These are lives of real people." The world is "just not that linear," she said. "It's not an equation. It's an ecosystem."

Still, she said, Heifer has worked with independent researchers to measure its programs. "The University of Western Michigan evaluates Heifer's projects and has found that there's very positive return to families in terms of income, nutrition and other indicators," she told us.

Bintliff said she could send us those evaluations. After the interview, though, we got an email from a Heifer official. After thanking us for our interest she wrote: "As the sources cited are unpublished, we're not able to provide further information publicly at this time."

Until pretty recently, the charity world has been about doing stuff that helps, without really asking: How much does it help exactly, and how much does it cost? But there does seem to be this shift that's starting to happen. Philanthropy is getting nerdier; people are paying more attention to data.

Last year, the GiveDirectly guys gave a presentation at Google's corporate charity office. They didn't show any pictures of people. But they showed charts and studies and numbers. The people at Google were impressed. They gave $2.4 million to GiveDirectly and told them to figure out how to give money to lots more people.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish.

This morning, our Planet Money team reported on a new charity called GiveDirectly. It's trying to help poor people in the developing world in an unusual way. It's trying to help them by just sending them money. The money is not a loan, recipients don't have to pay it back, and there are no strings attached. They can spend it however they want.

Now this is a somewhat radical idea in the charity world, and it's raising some uncomfortable questions. Now, the second report from David Kestenbaum and Jacob Goldstein, who went to Kenya for a closer look at both sides of this charity debate.

JACOB GOLDSTEIN, BYLINE: Here's the way most charities work: They get money from donors and spend it on things they think will help people. They build schools or provide medicine or they give people cows.

When we were in Kenya, we visited a village where people had been given cows by a group called Heifer International. And we can report, these were very impressive cows. They looked strong. They looked healthy. They looked, frankly, like they could eat the local cows we'd seen in other villages. There was a moment where I thought this cow was going to eat me.

UNIDENTIFIED WOMAN #1: (Foreign language spoken)

UNIDENTIFIED WOMAN #2: (Foreign language spoken)

UNIDENTIFIED WOMAN #1: (Foreign language spoken)

GOLDSTEIN: Maybe it's not a good idea.

DAVID KESTENBAUM, BYLINE: Yeah. Maybe it's not a good...

GOLDSTEIN: We should just step out of corral...

And, like lots of charities, Heifer also spends money to provide training. Working with another group called Send a Cow, they taught people to make sure their cows got the right nutrition and to keep detailed logs tracking milk production. People visited the village to make sure everything was going well. And all this really helped. A woman named Grace Otchien, who got a cow in the program, says her cow produces an enormous amount of milk.

GRACE OTCHIEN: Mine is 14, 15 liters per day.

GOLDSTEIN: Used to be?

OTCHIEN: One, the local cows.

GOLDSTEIN: One liter compared to 14 or 15?

OTCHIEN: Yeah.

GOLDSTEIN: So 14 or 15 times better?

(LAUGHTER)

OTCHIEN: Yes.

GOLDSTEIN: So that's a traditional charity. GiveDirectly, on the other hand, takes money from donors and just gives that money to poor people. Bernard Omondi lives in a nearby village in Western Kenya. He remembers when he got money from GiveDirectly. He got a text message on his phone.

BERNARD OMONDI: (Through translator) It was sent very early in the morning. I was still in my bed, I jumped up. My wife asked me, Bernard, what is it? Then I told her the guys of GiveDirect have sent us the money. It's here.

GOLDSTEIN: He says the money, $1,000 in all, changed his life. With part of it, he bought a used motorcycle, which he drives as a taxi, charging people for rides.

KESTENBAUM: There is another big difference between GiveDirectly and lots of other charities, and you can see it in GiveDirectly's annual report. There are no happy anecdotes about, say, a guy who used money to buy a motorcycle. There are no pictures of smiling children. In fact, there are no pictures of people at all. Paul Neihaus, one of GiveDirectly's founders, says, this is intentional.

PAUL NEIHAUS: None of our photos are super-high quality. We take them for monitoring purposes and not to, like, create glossy brochures for donors.

KESTENBAUM: You say glossy brochures with such disdain.

NEIHAUS: I do.

GOLDSTEIN: GiveDirectly has a challenge to other charities. Neihaus is pretty blunt about this. Providing training, flying in experts, paying staff and, yes, making glossy brochures, all that costs money. Neihaus says, if you're a charity and you think what you're doing is better than just giving money, prove it.

NEIHAUS: We would like to see organizations make the case that they think they can do more good for the poor with a dollar than the poor can do for themselves. That would be fantastic. And I think some may be able to make a convincing case. But if you go to the websites today, I don't think you're going to see the argument being made. Nobody even bothers.

KESTENBAUM: Neihaus says charities should be clear about how much they're spending and how much what they're doing is helping. And to figure this out, he says, charities should do actual experiments. GiveDirectly is working with independent researchers who are conducting an experiment. The fancy term is a randomized, controlled trial. Basically, there are two groups of villagers. One group gets money, the other does not. Then they compare the two groups so they can tell what difference getting money makes.

GOLDSTEIN: The researchers are doing this incredibly detailed survey. It takes about six hours per family. And Michael Faye, another of GiveDirectly's founders, says there are hundreds of questions.

MICHAEL FAYE: Have health incomes improved? Has your income improved? Have you been able to feed yourself? How have family dynamics evolved? All these sorts of things.

KESTENBAUM: They also measure kids' height and weight to see how they're doing. The results from the study are due out later this year, and they will be made public.

GOLDSTEIN: So if you wanted to figure out which is better, giving cows and training or giving cash, you could take the same approach. You could take one village, give the people cows and training, and in the next village over, take the money you would have spent on cows and training and just give it to people. Paul Niehaus from GiveDirectly, not surprisingly, loved this idea.

NEIHAUS: It'll be great, wouldn't it? It will be fantastic. That's exactly what the sector needs.

GOLDSTEIN: We called up Heifer International to see what they thought. We talked to Elizabeth Bintliff, vice president of Heifer's Africa programs.

KESTENBAUM: How would you go about a head-to-head trial where one village gets cash, the other village gets the same amount of money spent on cows and training?

(LAUGHTER)

KESTENBAUM: And we see which does better?

ELIZABETH BINTLIFF: Well, let me say this: I mean, as an African woman, that sounds to me like a terrible idea.

(LAUGHTER)

BINTLIFF: I mean, you know, it sounds like an experiment, and we're not about experiments. We - these are lives of real people.

KESTENBAUM: I think the GiveDirectly response to that would be we have to do experiments because that's how we can figure out the very best way to help people.

BINTLIFF: It's just not that linear. It's not an equation. It's an ecosystem. That's the only way I can describe it.

KESTENBAUM: She says Heifer does measure its programs. It's worked with independent researchers who study Heifer's projects.

BINTLIFF: The University of Western Michigan evaluates Heifer's projects and has found that there's very positive return to families in terms of income nutrition and other indicators: gender relations, children's welfare, education and so on.

KESTENBAUM: Do you know what any of the numbers are from the study?

BINTLIFF: I can send those to you, yes.

GOLDSTEIN: But after we talked to Elizabeth Bintliff, we got an email from Heifer. It said: Thanks for your interest in those Western Michigan evaluations. But, quote, "As the sources cited are unpublished, we're not able to provide further information publicly at this time."

KESTENBAUM: Until pretty recently the charity world has been about doing stuff that helps, without really thinking, well, how much does it help exactly, and how much does it cost? But there does seem to be this shift that's starting to happen. Philanthropy is getting nerdier, more data-driven.

GOLDSTEIN: Last year, the GiveDirectly guys gave a presentation at Google's corporate charity office. They didn't show any pictures of people. What they did show were charts and studies and numbers. And the people at Google were impressed. They gave GiveDirectly $2.4 million and told Paul Niehaus and Michael Faye, you're thinking too small. Go figure out how to give money to lots more poor people. I'm Jacob Goldstein.

KESTENBAUM: And I'm David Kestenbaum. NPR News. Transcript provided by NPR, Copyright NPR.

Related Program