I recently read two things that irritated me. This article in the Washington Post about the role of philanthropy and this blog piece on Watsi (this second one i urge you to read). Watsi is start-up that aims to “provide healthcare for every person in the world”. It’s basically individual crowdfunding, at a push Kiva for health (although there is no financial return). Unconditional cash transfers or direct giving in any form are not the silver bullet you have all been waiting for to solve poverty or any other social issue. Sorry. It’s going to take a little more work.
Every time I read an article that refers to GiveDirectly’s experiment and how research has shown that poor people don’t squander money, I get irritated. It’s lazy reporting because it takes cash transfer out of context. I know, I know — i’m going to be accused of being bitter, jealous, a “hater”. But don’t get me wrong. I don’t disagree on the positive benefits that cash transfers have on the individual receiver. And in many contexts it is better, more flexible, dignified and empowering for the recipient.
A global social welfare model?
Firstly there needs to be a distinction between what Watsi or GiveDirectly do and cash transfer programming. Cash Transfers, as referenced by the UN World Humanitarian Summit or any other INGOs cash strategy, are generally in the context of a humanitarian response or where communities have no access to financial service providers. This means, where applicable, agencies transfer cash amounts instead of items which require complex, risky and expensive supply chains. But these are normally done in the context of a wider programme.
The problem with these tech driven, disintermediation solutions like Watsi is that they are not part of a wider strategy. They are just simply, handing over cash. In effect, they are creating a global social welfare model (which is unfair on social welfare models because they are also generally part of a wider strategy…generally…). But you get what i mean. There is no plan. I’m poor > I need money > You see my photo looking at you with puppy dog eyes and a short sob story > you give me money.
It is just like you, reader, in a city, dropping a few pounds/dollars/euros in the hat of person sitting by the side of the street with sign saying “Please spare a few pounds / dollars / euros…”
How often do you do that? Why don’t you do it? Is it because they can’t instagram you and tell you what they did with the money? Or is it because you can’t get your friends to “like” what you did so what’s the point? Surely if you believe GiveDirectly’s research that poor people don’t squander money you should have no fear in giving to the person on the street?
Giving directly is also potentially disruptive to a community. Scenario — lets assume where you live you are all of relatively equal status and income. The chlorine machine at the water pump is broken, you can either buy chlorine from the shop or risk the water as is. Now imagine some benefactor gives money to your neighbour but not to you. With the extra money they can now buy some chlorine. You on the other hand have to still use the water as is. They spend less money on health care related to water borne diseases, but your children get diarrhoea once a week and miss school regularly. The chlorine machine at the water pump is still broken.
Society doesn’t work based on individual isolation.
While “we” in the west might have lost our sense of community and society many places survive precisely because of it. A direct giving system creates inequalities. You tear at the fabric of society because you introduce rivalries between those who can get and those who can’t.
There is no silver bullet, not even what we are trying to do at FieldWorks. Change takes time, failure, encouragement, facilitation, empowerment; the UK’s last cholera outbreak was in 1866, and Italy only eliminated malaria in the middle of the 20th Century.
Slick websites, one-click giving, poverty pimping solutions should not be latched onto wholesale. There needs to be substance behind it.
Champions not silver bullets
Society needs facilitators and champions. It needs people who can bring together individuals to come to a common agreement on the priority needs of communities. Where a strong local government does not exist this should fall temporarily to civil society and community based groups until government is strong enough. Donors (yes, you) tend to think that the role of the NGO is to simply pass on your good will (with no admin costs!!?), to do what you want. In actual fact the NGO is there to coordinate, facilitate on behalf of the community, and leverage your good will to achieve more for the benefit of the community as a whole.
NGOs may be inefficient, governments maybe absent, but the giving money directly model just creates an unaccountable global welfare system.
Don’t change the problem, just find a better solution.