Just Give Them Money: Facebook Cofounder Digs a "Radical" Way to Help the Poor

Good Ventures, the foundation started by Facebook cofounder Dustin Moskovitz and his wife, Cari Tuna, hasn’t been around for very long. It's still figuring out its strategies and grappling with a challenge that many tech philanthropists confront: How to be as "disruptive" giving away money as they've been in making it. 

One of the ways Good Ventures believes it can disrupt the philanthropic status quo is by getting behind GiveDirectly, and Good Ventures has supported the organization to the tune of $7.6 million over the past two years.

GiveDirectly's name pretty much sums up what this outfit is all about. A few years ago, NPR called GiveDirectly’s plan of giving money directly to poor people as “simple, but radical,” and “the outgrowth of a relatively new technology, and a very old economic idea.” The idea? Give cash to the extremely poor and let them decide how to spend it. In other words, once the money is transferred to an individual, it’s hers, no strings, no conditions.

Cash with no strings attached obviously comes with potential problems. In an interview with GiveDirectly cofounder, Paul Niehaus, NPR reporter Jacob Goldstein posed this question:

“If someone takes his money uses it to get drunk, is that just as good as if someone takes it and uses it to pay for a child to go to school?”

Niehaus’ response: "There do exist choices that are self-harmful, but there's a lot of evidence that people don't just drink money. They don't seem to be blatantly self-destructive or irresponsible."

On the contrary, the money is generally put to good use, according to an evaluation that GiveDirectly commissioned of its work in Kenya.  The Kenya study found a big increase in assets thanks to investments in livestock and home improvements, a decrease in food insecurity for children, and reductions in stress and depression among recipients. Other studies of cash transfers have shown the same thing, including positive long-term results on earnings. 

Good Ventures started its relationship with GiveDirectly in 2012 by awarding it a $100,000 general operating support grant. The grant was awarded in response to GiveDirectly’s "standout" charity ranking by GiveWell in 2011. The following year, GiveDirectly received a top ranking from GiveWell once again. Good Ventures upped its giving ante, awarding the organization a $500,000 operating support grant.  

In 2013, GoodVentures awarded GiveDirectly a $2 million grant at the end of the year and then decided to offer $5 million in matching funds to donations made to GiveDirectly from December 2013 to January 31, 2014.

At the beginning of this year, GiveDirectly announced that it had reached its fundraising goals and Good Ventures made good on its $5 million matching pledge. Our bet is that more money will be flowing from Good Ventures to GiveDirectly. This is an interesting relationship to watch.