
Giving $1k to Someone in Extreme Poverty - omarchowdhury
https://medium.com/@heyheyandrew/heres-what-happens-when-you-give-1-000-to-someone-in-extreme-poverty-78bdce3aa414#.obz1bro74
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mjevans
Given the /where/ this money is being sent, how well does 1000 USD spend in
Kenya? That is, what would it cost to buy someone in the US that same result?

Edit: I missed the 'quarterly' part of the education cost.

I think I'll compare the 50-70 USD per 3mo (~230/year) education cost of a
student to one from the USA. According to a census website post one of the
less expensive schools spent about 7000 per student / year. (
[http://www.census.gov/newsroom/press-
releases/2015/cb15-98.h...](http://www.census.gov/newsroom/press-
releases/2015/cb15-98.html) )

Roughly calculating, that's about a 30x difference in cost of living. So it'd
be a lot more like unconditionally giving a poor US family 30K. If this is a
one time infusion, it isn't BIG, but close enough to it to break negative
feedback loops.

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T2_t2
> That is, what would it cost to buy someone in the US that same result?

That's really hard to compare, because very few people in the first world
don't have a working roof ([https://www.givedirectly.org/operating-
model](https://www.givedirectly.org/operating-model): We target households
using criteria that vary by region—including aggregating a range of factors or
looking at housing materials & [https://www.givedirectly.org/blog-
post.html?id=2845341784910...](https://www.givedirectly.org/blog-
post.html?id=2845341784910255488)).

Lets use the figures from the operating model page: "The average recipient in
Kenya lives on just 65 cents (nominal) per day" \- so a cash injection of
$1,000 is 1,538 days @ $0.065 - or about 4 years. If it is a family of four,
$1,000 is a year's worth of expenses for the whole family.

That's probably a fair measure of what this represents - a year's salary for a
family of four.

As a cash injection, it also allows for large purchases, e.g. to spend a few
hundred on a roof. So each payment is the equivalent in the US of enough cash
to buy, say, a car?

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whamlastxmas
TLDR: It's an advertisement for a non-profit that mentions their website's
name about a million times. The money is going to people in very poor places
like Kenya. Almost all of it is spent on education fees, housing, food, and
healthcare. About 3% on vices like tobacco.

~~~
omarchowdhury
It would be an advertisement if the writer was directly compensated or
connected to GiveDirectly. That doesn't seem to be the case, and surely people
who are operating in the philanthropy market would also follow FTC sponsorship
disclosure laws?

As stated:

This is an unsolicited Op-Ed by an individual who is not being compensated by
GiveDirectly, it’s patrons, benefactors, affiliates, or partners.

Calling it an advertisement detracts (and by definition, it isn't) from the
essential: that there's good being done.

~~~
g52oevr0in
It seem like, these days, anyone talking about how something is good is
"advertising". You're not allowed to praise or recommend anything, only
criticize.

~~~
theossuary
I think persuasion pieces have become somewhat synonymous with "advertising"
due to the rise in popularity of sponsored content. With everyone trying to
sell you something, it's hard not to become jaded.

~~~
whamlastxmas
The article was written by a guy who owns a advertising consulting business,
specializing in social media and native advertising. He's trying to sell
something, even if it's not strictly a business transaction directly between
him and GiveDirectly.

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iakh
Not sure if it actually matters much, but I'm curious how they're able to
track spending. It seems tracking spending habits could be construed as a
condition of receiving subsequent installments and thus change the recipients'
behavior into what they think GD wants them to spend it on, rather than what
they'd actually want to spend it on.

~~~
T2_t2
(Disclosure: I donate to the new basic income charity, which I started when I
found a way to do it from Australia).

[https://www.givedirectly.org/](https://www.givedirectly.org/) is the website,
and the homepage answers a lot of questions.

> tracking spending habits could be construed as a condition of receiving
> subsequent installments and thus change the recipients' behavior into what
> they think GD wants them to spend it on, rather than what they'd actually
> want to spend it on.

I agree that
[https://en.wikipedia.org/wiki/Observer_effect_(physics)](https://en.wikipedia.org/wiki/Observer_effect_\(physics\))
is probably true, but the the question is really hard to answer or put in
perspective because "what I want to spend money on" changes based on lots of
factors, not least of which is the amount received.

It is also likely that getting three payments changes the spending from
receiving a single payment, which would be different to the spending from GD's
latest program, [https://www.givedirectly.org/basic-
income](https://www.givedirectly.org/basic-income), a test to "...
scientifically test the idea of a universal basic income by providing regular
cash payments to thousands of extremely poor households in East Africa for
more than ten years."

There are sooooooo many questions about cash transfers, and given the almost
complete lack of administrative costs - $0.91 in every dollar ending up in a
poor person's hand is insane - they are all worth investigating. Your question
is likely item 9,999 on that list :)

As an example of the questions that need an answer, one I found interesting
was this: [https://www.givedirectly.org/blog-
post?id=334321986851653361...](https://www.givedirectly.org/blog-
post?id=3343219868516533613)

> In Uganda and Rwanda more than 96% of eligible recipients have opted in,
> respectively. > ... In July 2015 we entered Homa Bay, a new county and our
> first venture outside of Siaya. In Homa Bay and the neighboring areas,
> roughly 45% of the households we speak with decline to be enrolled into the
> program.

It is amazing that people will give up free money, and shows the lengths GD
goes to investigate the problems surrounding cash transfers.

~~~
canada_dry
91% of donations going towards the intended recipients is almost too-good-to-
be-true.

I volunteered for a small locally run charity in a Nairobi slum and observed
that for every dollar received, the Director would use up to 60% towards
maintaining him and his family. This, I was told, is the norm.

~~~
angrow
The legal requirement for an organization to receive tax-free nonprofit status
in the US is that at least 5% of funds be spent to serve the stated mission.
The bar is low everywhere.

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tcbawo
If everyone is building mud huts, are they held back by lack of tools? It
seems like a decent kiln for making roof or floor tiles would make a big
difference in many of their lives.

Developing art or goods for export would help to make this sustainable.

~~~
whamlastxmas
Check out Primitive Technology YouTube channel. His most recent video shows
this. It's not too difficult.

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mshenfield
Direct giving fills a void between infrastructure building, entrepreneurship,
acute/long term medical aid, and foreign investment.

