
Is It Nuts to Give to the Poor Without Strings Attached? - RougeFemme
http://www.nytimes.com/2013/08/18/magazine/is-it-nuts-to-give-to-the-poor-without-strings-attached.html?hp
======
atldev
I've been to Kenya (village of Ngaamba) 4 times in the last 5 years on service
trips through the 410Bridge organization. Their model relies on a village
leadership council to prioritize need and decide how resources should be used.
Then we come alongside and help. Our first trip focused on water. The second
was infrastructure. The third was education. This past June it was staffing a
medical clinic that was recently built. Now a community center has sprouted
around the clinic and the trip next year will likely focus on micro-finance
and entrepreneurship.

This isn't charity. It is partnering with a talented group of village leaders
that understand the needs of the community far better than we could. There is
accountability but it's driven locally and it's sustainable. They'll be able
to carry the momentum they created long after we're gone.

There are plenty of models that work, and I'm glad there are so many helping
out. But I've seen first-hand that allowing a community to pull the help they
need works better than a foreign push model.

~~~
skrebbel
> _This isn 't charity._

Sooo, they pay you US rates for your consultancy?

~~~
atldev
No, we're all volunteers and we raise money for projects. What I mean is that
we don't hand out money. We work alongside the community on each project.

~~~
Radim
Charity.

But the best kind, the kind that may actually work long-term (as long as
"raise money" means voluntary donations, and not some sort of taxation).

~~~
rtpg
Not trying to be snarky, but are you implying that raising money through
taxation would somehow not make this work?

~~~
Tycho
I think he's saying that if the money is raised through taxation then it's not
charity.

------
gabriel34
It's interesting that people that bettered their lives with that money did so
by entrepreneurship or by solving money draining problems(the roofs), which
gave them long term benefits.

In contrast, I live in Brazil, here we have a governmental handout program
which gives sure money every month. People use that money to short term
spending, there is not much entrepreneurship or sustainable richness
generation among the receivers.

It would APPEAR that one time downfall stimulates wise spending, since that
has much more value than "blowing it on booze and cigarettes" or buying a
plasma screen. One should, of course, have in mind that the article seems to
only show us a few examples, constituting anecdotal evidence at best,
prompting for further studies.

Another thing to consider is if this model is better than microcredit which
stimulates entrepreneurship less diffusely and possibly more efficiently in
respect to the relation between total program cost versus social betterment.

If on one side we have the fact that microcredit only costs the subsidy to the
interest paid the debtor, things such as the metal roofs would not be feasible
under such a model and although money would circulate and the entire society
would benefit, this program would only be directly beneficial to people who
have entrepreneur qualities, effectively creating very distant social classes
(which is kind of ironic for a program which aims to distribute wealth). Could
such a disparity dissipate over time, or would it evolve to a social abyss?

For every society the answer is probably different and the ideal path probably
lies somewhere in the middle. One thing is certain: no matter what route is
taken, this certainly shakes things up; and in a stale misery scenery, I can't
seem to find a reason for this not to be positive.

My father once said that however bad a social program is, if it betters
society it can only be the second worst thing to do, the worst being doing
nothing.

~~~
ENOTTY
Did you read the third and fourth graf of TFA? It appears Mexico gives regular
handouts, which still stimulates wise spending.

Microcredit was a huge fad a few years ago, but then some studies found that
its effectiveness may be suspect and requires more study. See
[http://en.wikipedia.org/wiki/Impact_of_microcredit](http://en.wikipedia.org/wiki/Impact_of_microcredit)

~~~
capex
At an average of 22.3% annual interest rate, microcredit schemes appear to be
a ripoff.

~~~
tehwalrus
20-25% ain't bad when you don't have good ratings data. Look at Wonga et al in
the UK - 4000% was the highest one I think. (they're called "payday" loans -
they give you up to £1,000 for up to 30 days. Most people who use them end up
in a debt spiral, unsurprisingly.)

------
tonyg
[http://en.wikipedia.org/wiki/Basic_income](http://en.wikipedia.org/wiki/Basic_income)

~~~
moocowduckquack
Basic income is an awesome concept. I have argued for it before with people
and I often get the reply that if it was implemented then nobody would bother
working. I generally then ask why any of the rich bother working on that
basis, given the fact they don't have to. This question makes some people
angry.

~~~
ahomescu1
I'm not at all opposed to basic income on moral grounds (it's actually a nice
idea from that point of view), but I don't think it's sustainable
economically, because it creates a positive feedback cycle.

Here's why: let's say you compute an amount $X of income everyone gets. This
means that everyone now has enough money for food, rent and other basic
necessities. That means that the demand for these goods will increase (maybe
not much in the US, but significantly in other parts of the world). That means
that the prices for those goods will increase (unless production increases
somehow, but why would it?). To adjust for this, the government would have to
increase the income; then the prices would increase again and so on. Basically
you'd have rampant inflation.

Now the counterargument is going to be that this wouldn't happen, because
production would increase up to a point where everyone's needs are met, and
prices stabilize. However, production still depends on labor. What incentives
would people have to put in more work to produce more?

~~~
moocowduckquack
_" unless production increases somehow, but why would it?"_

Personally, I think that one of the best things you could do to increase
production is to ensure that people are not living hand to mouth. The personal
strategies of the desperate are not conducive to a working economy.

 _" What incentives would people have to put in more work to produce more?"_

Boredom and curiousity. That's all you ever need. Hunger only inspires people
to get fed. Satiation inspires them to design new houses.

------
nnq
I think it should be obvious that you need two "moves" to lift people up from
poverty:

1\. build infrastructure (water, electricity, roads, communication, education
services, political infrastructure, financial etc.)

2\. "lift people up" to a level at which they can make use of the
infrastructure, through education and covering some of their basic needs.

No-string-attached donations are great for (2), but they are limited in impact
and quite pointless if the people don't have the "infrastructure" to grab to
once they are "lifted up a bit" \- you'll only end up with poor uneducated
people that will have _more children_ so you'll end up with _more poor
uneducated people._

Otoh, if you build the infrastructure but you don't do something to directly
lift people up from misery, poverty and depression or hopelessness you'll
probably end up with an even bigger waste of resources and lots of angry
people.

Philantropists and governments that want to lift their countries out of
poverty should understand that you need both (1) and (2) simultaneously and
that _of course_ you need to have (2) with no-strings-attached (an ER doctor
doesn't make a cardiac arrest patient sign a contract before resuscitating
him!!!).

~~~
m_mueller
From the examples posted in the articles it seems to me that 1) can be reduced
to the financial part (e.g. microcredit systems such as water.org) and 2)
should come first - you need to create a fertile ground where people can lift
themselves up from basic survival mode into some sort of business to sustain
their family. Once you have enough people being able to sell services to
others, infrastructure should come automatically - probably roughly in the
order of maslow's pyramid. The only other infrastructure that might be worth
it to boost other than financials is education, since this should be expected
to accelerate the growth process.

------
myfoolishpride
It is insane to give money to people and expect that that will solve all their
problems. Particularly if it is a one time thing (much like just handing a
homeless person a dollar on the street). If you really want to help people it
takes time, patience, and compassion. Poverty is a hard problem with no easy
solution.

~~~
nhaehnle
_Poverty is a hard problem with no easy solution._

Surprisingly, giving money to poor people makes them not-poor.

Now, for some reason, people tend to be averse to outright cash transfers,
because they think that pre-tax income has a special significance in that it
is somehow "natural". Matt Bruenig explains this better than I could, e.g.
here: [http://mattbruenig.com/2013/07/21/tm-scanlon-is-wrong-
about-...](http://mattbruenig.com/2013/07/21/tm-scanlon-is-wrong-about-in-
kind-benefits-and-you-might-be-too/)

The essence is that pre-tax income is not in any way "natural", but _also_
results from more or less conscious decisions made by society. So the reason
that you think solving poverty is hard is that you assign a specific
significance to the difference between pre-tax and post-tax income.

~~~
ahomescu1
> Surprisingly, giving money to poor people makes them not-poor.

For a while at least. In many cases, they just spend that money and go back to
being poor. It's not universal though.

Let's say you give a poor man enough money to start a business. Starting a
successful business requires some basic business/economics knowledge and
insights, a market and a lot of work to make it succeed. In addition, they
might have to struggle with local corruption and bureaucracy. Because of all
these difficulties, you have no guarantee they'll actually break out of
poverty. Also, they might just take the money and spend it on leisure (buy a
car, TV, clothes).

I think what helps people is education about economics and legal systems. If
you have a free society in place with rule of law, people break out of poverty
on their own.

~~~
nhaehnle
> > Surprisingly, giving money to poor people makes them not-poor.

> For a while at least. In many cases, they just spend that money and go back
> to being poor. It's not universal though.

You missed the point, though I have to admit that it is a subtle one and not
well known. So let me continue playing devil's advocate.

The not-poor are only not-poor because they receive money through some already
existing mechanism of distribution. If that mechanism ceases to operate, they
will likely become poor by spending all their money.

So, yes, if you make the currently poor not-poor by changing the existing
mechanisms of distributions, and then change those same mechanisms back to how
they are today, then quite likely many of them will revert to being poor.

That is not an interesting point, yet somehow people think it is. Why?

Probably they think so because they have an unconscious and implicit belief
that the currently existing mechanisms of distribution are somehow "natural".
Frankly, that is a bizarre proposition.

Just consider how many laws affect the distribution of wealth in society, many
of them largely arbitrary. This holds for laws of commerce, laws governing
corporations, it holds for a lot of regulation, it certainly holds for things
like patent law and copyright law.

~~~
ahomescu1
> The not-poor are only not-poor because they receive money through some
> already existing mechanism of distribution. If that mechanism ceases to
> operate, they will likely become poor by spending all their money.

> Probably they think so because they have an unconscious and implicit belief
> that the currently existing mechanisms of distribution are somehow
> "natural". Frankly, that is a bizarre proposition.

That strikes me as an un-natural way of looking at things. If a farmer grows
potatoes and sells them for money, he's not "receiving" money, he's trading
for it (he's receiving money as much as the other guy is "receiving"
potatoes"). That seems very natural to me (you give something, you get
something). Even in situations where this trade is illegal, it still happens;
for example, drug dealers. They sell you heroin/cocaine/marijuana, you give
them money. That transaction is highly illegal, yet it still happens because
addicts want drugs and dealers want money (that they then use to buy other
stuff with). On the other side of the spectrum, you have the completely legal
and moral transactions, like the potato example I gave. Laws have some impact
on the basic natural tendency of people to trade for what they need, but they
can't make trade go away (look at alcohol prohibition for another example).

I think the main cause of poverty is that poor people don't have much to trade
(skills, labor, resources, even ideas or art). In other situations, trade is
simply made difficult (for example, if you live in a warzone, it's pretty hard
to be a hairdresser or grow potatoes).

------
GigabyteCoin
Define "poor".

When giving money to the poor in a highly oppressed area of the world (like
Kenya) I would think that this is a great idea assuming that most people are
inherently good and that their poorness-situation is due to a lack of
opportunity rather than a lack of will power.

When giving money to the poor methamphetamine-addict who is incessantly
harassing every passer-by for some bus money (found in the downtown areas of
many prosperous and free cities throughout North America) then no I would say
that is a horrible waste of capital. Due to their having a lack of will power
to "succeed" rather than a lack of opportunity.

~~~
mikegagnon
I regularly give small amounts of money directly to impoverished individuals I
see on the street.

You raise some points that I've heard before, and I would like to address them
all, and explain why I think it is rational for me to give money the way I do.

(1) "I would say that is a horrible waste of capital" to give money to meth
addicts.

I give a dollar to whoever asks me for money. I can't tell who is a meth
addict and who is not. I am sure much of my charity goes to alcohol, tobacco,
marijuana, meth, and other drugs. I just consider that a cost of doing
business. For every dollar I give out, some subset of that money goes to
__non-drug use__. I think that is a good use of my capital.

(2) "Due to their lack of will power to 'succeed' rather than lack of
opportunity."

There's a couple of things to say to this sentiment.

First, I often hear the notion that impoverished people have the opportunity
to bring themselves out of poverty. That's not true. The world's economic
system results in non-zero unemployment. Meaning there are more people who
want jobs than there are available jobs. Thus there are inevitably many people
who want to work but can't get it. The only way they can survive is through
charity --- from either friends, family, strangers, the government, charities,
etc.

The last point I'll make might be the most controversial, but it is also at
the core of why I give money directly to impoverished people.

I am skeptical that "will power" exists in the literal sense. As in, I am
skeptical that free will exists as much as people tend to intuitively believe.
It seems to me that humans are just moist robot automatons whose actions are
the result of their current physiological state and response to the stimuli on
their senses. Some interesting scientific research has shown that humans can
perceive more free will than they actually have. There is also some
interesting philosophical arguments that suggest free will could be a complete
illusion. See
[http://en.wikipedia.org/wiki/Neuroscience_of_free_will](http://en.wikipedia.org/wiki/Neuroscience_of_free_will)

So I think it's possible that people who "lack of will power to "succeed"' are
simply __unlucky__. And I happen to be lucky. I am smart, tenacious, hard-
working, have relevant job skills and I happen to live in a society where
those variables are rewarded with wealth.

It therefore makes sense to me to give people small amounts of money when they
ask for it. It just might be the case that I am lucky and they are not.

I do not expect this money to solve any of their problems. But maybe the
person I help will buy a tasty snack and their happiness will go up in those
moments. Or maybe that person will buy a cheap ukulele and teach himself to
play --- which happened the other day with someone I regularly give money to.

~~~
enjo
NO! Stop it!

Look I appreciate your desire to help. It's a fantastic thing, and something
we should all do. However, giving money to people on the street is not
helping. It's enabling.

Basically every city has some sort of program to help the homeless work
themselves back into society in general. These programs are generally built
around strict oversight and supervision during those early days.

These programs are effective and important. However, they do require the
people participating in them to be fully "bought in". When you give a dollar
to someone "down on their luck", you are really giving them just enough of a
life-rope to keep from entering these programs (which require sobriety as a
matter of course).

You're not helping them. You're ensuring that they spend another night on the
street, and ultimately that may prove fatal. They need to bottom out and seek
help of their own free will. That's how the road to ending their homelessness
truly begins.

* source: Working with several homeless organizations.

~~~
dylangs1030
I'm glad you brought up this argument.

I live in New York, and I frequently travel in NYC. I've spoken to a number of
homeless people. How do you counter the often heard response that homeless
shelters pose a risk to people entering them?

I have heard stories (I don't know if they're true, but I wasn't told on the
pretense of giving money) that homeless shelters frequently house other
members who will steal from their fellows or abuse them (sometimes sexually).

Like I said, I like your argument. But you worked with several homeless
shelters, I want to know your take on this.

~~~
enjo
Shelters are only a very small part of the programs that help get folks off
the streets. While they may not be the best of places, most homeless who seek
help (at least in my city) will spend only a short time in shelters. These
programs operate primarily on short-term and longer-term housing options
coupled with job training, rehabilitation for any substance abuse issues, and
general help.

People spending significant time in shelters (again, in my city) are refusing
to enter into these programs.

------
ISL
The same topic was covered (by the author) on Act I of this week's 'This
American Life'

[http://www.thisamericanlife.org/radio-
archives/episode/503/i...](http://www.thisamericanlife.org/radio-
archives/episode/503/i-was-just-trying-to-help)

------
angersock
While I'm very much in support of perhaps some sort of basic living wage,
there is the undeniable issue that an incorrectly-applied dollar may simply
support an ever-ratcheting drain on resources, as argued by Hardin:

[http://web.ntpu.edu.tw/~ckliu/course/research/lifeboat.pdf](http://web.ntpu.edu.tw/~ckliu/course/research/lifeboat.pdf)

Whether you agree or not, there is something in the argument to consider.

~~~
wmf
This kind of aid is based on the assumption that it creates economic growth
which can solve those problems.

------
melloclello
The powerful Venkatesh Rao recently wrote a column on related themes.

[http://www.ribbonfarm.com/2013/07/31/the-quality-of-
life/](http://www.ribbonfarm.com/2013/07/31/the-quality-of-life/)

> When you actually meet people living in tough conditions, you realize that
> they don’t exactly make up dreams for their lives in some UN-approved
> sequence; water first, food next, healthcare third, money fourth, philosophy
> when I am rich, alcohol and marijuana never.

It's better than this, go and read it.

------
mgwhitfield
maybe if your idea of giving expects something in return in which case...

also if you sort of prioritize some social connection to supplying money, or
you try to think about it with a strategy

. . . is that giving

------
mrgriscom
I was disappointed that the article didn't address the issue of jealousy and
conflict between those who receive the grants and those who don't. To me that
seems like one of the biggest struggles in a scheme like this.

------
thomasfl
It's great to see some innovation and progress in the field of humanitarian
aid. The idea of just handing over money with no strings attached is so
counterintuitive, but in the end it's the most harmless types of humanitarian
aid there is. Improving poor peoples lifestyle, especially giving them hope
for the future and a happy family life, is the most effective way to prevent
terrorism. Happy people aren't terrorists.

Disclaimer; I'm a blue eyed guy born and raised in norway. So excuse me for
having a naive view on this topic.

------
marincounty
It's nuts to give to any 501C3 without looking at the free preview at
Guidestar. I give to the guy's on the street without strings attached. Someday
--that just might be you, or me?

------
michaelpinto
This is a double standard: We give welfare to large corporations with no
strings attached.

------
robomartin
The title is a question. And the answer to that question is a big "it
depends".

Being that this is the NY Times one always has to be guarded about potential
ideological bend on articles. This is no different than watching Fox News vs.
CNN. The bend here might be to somehow use some of these success stories to
create support for our entitlement programs.

The problem: Culture and History.

A continuous stream of free money devolves a person into a state of mind from
which it is hard to self-extract. By this I mean that free money forever and
without any conditions creates, well, to put it simply, lazy people without
any motivation. In that sense this kind of "help" is actually damaging to
society, creating a whole layer of people with a perennial need for support.

And, in this kind of an environment criminal twists and turns also develop.
There are plenty of videos on Youtube from people explaining how to abuse the
system by, for example, having lots of kids in order to increase your monthly
take. The damage to society from such behavior probably can't be measured. You
have single mothers with a bunch of kids from probably different fathers
--none of whom really care about the kids. The kids are seen as sources for
money and goods. They live a crappy life outside any semblance of even a
quasi-normal nurturing family. The rest is history: Whole layers of society
stuck in a perennial muck of poverty, ignorance, crime and social mayhem.

We have tens of millions of people who have been on one or many layers of
government handouts of generations. Generations. What we have accomplished
with that is far from helping the poor. We have destroyed generations of
people who would otherwise have certainly become very useful members of
society.

Giving money indiscriminately, with no limits or conditions for years, for
generations, is horribly damaging. It only exacerbates the problem and creates
a perennial load on society at large and a massive cultural and, yes,
financial cost.

And that's the culture and history. A lot of our poor have been living through
various layers of handouts forever. And rather than helped them we have
destroyed them as people.

To be sure, it is the responsibility of any modern society to look after
those, who through whatever circumstance in life, fall on hard times. I
believe, with passion, that it is absolutely important to have a way to help
individuals and families. Long term help that isn't careful about devolving
those being helped to the point of, effectively, transforming them into less-
than-useful members of society, isn't good.

We have this problem.

The poor being highlighted in this article come from a very different frame of
reference. They are struggling as few of us can possibly imagine. And in their
struggle they work hard --very, very hard-- to provide themselves and their
families with a meager existence. They are poor beyond most Americans
comprehension, yet they maintain family units and live within the nurturing
context families provide. They do not --for the most part-- resort to crime
and will do almost anything and take almost any job to earn some money for
their families. They are not out there buying iPhones, cars, fancy TV's,
eating expensive and bad junk food. I could go on, but I want to be somewhat
kind to the American poor, the vast majority of whom are nice people on hard
times. Regrettably we have millions who are not.

When you take someone with the culture and history of this representative
example of a Kenyan poor and, out of nowhere, provide him or her with a
lifeline the results are bound to be very different. Of course they are not
going to go out and burn that money on booze, TV's or other luxuries. That is
not in their culture. They see this as an opportunity to make a real effort to
intelligently better themselves. To improve their station in life and make an
attempt to raise their family up a few notches from where they were.

This culture is very similar to that of the masses of immigrants who made-up
the US as well as those who continue coming here. The story is familiar: They
come here with nothing. Often even without command of the language. And, after
a few years of struggling, you find them doing very well. A lot of them end-up
owning small local businesses and some create huge enterprises. Their children
are well-balanced, respectful and dedicated to academic excellence.

These poor and often uneducated immigrants almost always surpass our native
poor in almost anything you might care to measure. Again, it is down to
culture and history. Our poor don't have the drive. They lost it. And they
lost it because we have been throwing money at them for generations.
Immigrants come to our shores without any expectation of handouts. They land
here already knowing that they are going to have to work hard and be
relentless if they want to create a better life for their families. That they
do.

If we truly want to help our poor out of the caves (Platonic reference, not
literal) we actually have to cut back on aid in a reasonably staged manner to
force them into an alternative life path. I am not proposing this is easy. Not
at all. The sad reality is that this would be political suicide for anyone to
approach, even superficially. And because of this we have millions of poor
that, generation after generation, stay in the muck and are unlikely to get
out. We need to cut off the flow of free money and put into place a system
that slowly reintegrates those of able body and mind (again, able body and
mind) into the productive layers of society.

Those with mental or physical ailments that prevent them from fully
participating in society do deserve our help for as long as required. If a
family exists then they would be expected to provide for them. Those without
any kind of a support group would absolutely need public help for as long as
required. We must keep in mind that we see incredible examples of what the
disabled can do with great frequency. For example, there are disabled athletes
that can do things most full-bodied couch potatoes in the US couldn't even
dream of doing. We have to be very careful not to cause damage with handouts.
I am not the one to decide where the lines are other than to say: Do not
underestimate the power of a motivated individual to struggle and climb
incredible hurdles to better themselves.

At some level I am speaking as someone who has been there. I had a massive
business failure early in my life. I am quite literally talking about
something that left me with almost nothing but the clothes on my back. The job
market was horrible at the time, with hundreds of engineers lining up for
every single available job. My response was to start a small business from my
garage. Within two years I had moved out of the garage and was employing
several people. I did not take any government handouts. I raised a few
thousand dollars from family and friends and worked 18 hour days seven days a
week for two years. I can't describe the sense of pride and accomplishment
this sort of thing brings.

And, yes, while I am an engineer and far from being uneducated a struggle is a
struggle. I know plenty of people with excellent educations who cave in when
faced with trouble. I also have a very good friend from Israel who came to
this country with no money and without even having finished high-school. He
literally slept in his $250 junk car for six months as he launched into
delivering small packages for businesses. He would sleep in the parking lot
behind his customers businesses waiting for packages being ready for delivery
at all hours of the night. He saved as much as he could and eventually got
himself a newer car. Today he employs nearly fifty people, has a nice business
a beautiful family and owns several properties. No education + No money + No
handouts. Huge drive to succeed. Success.

We have destroyed our poor through mindless handouts.

Culture and History. Very important.

------
jpatokal
Here's a counterexample when the answer to the title is pretty clearly "yes":
[http://en.wikipedia.org/wiki/Reversal_of_Fortune_(2005_film)](http://en.wikipedia.org/wiki/Reversal_of_Fortune_\(2005_film\))

Also, pretty much every lottery winner ever.

...which is not to say that giving money to the poor is always a bad idea, but
dropping huge lump sums (and in rural Kenya, $500 is huge) to random people
with zero accountability does seem... inefficient at best.

~~~
maxk42
Well there is certainly a difference between handing money to someone who is
unfortunate and handing money to someone who is irresponsible.

~~~
jpatokal
And how do you propose to objectively differentiate between the two before you
hand out the money?

~~~
maxk42
That's my point.

