Helping a third world country pull itself out of poverty and shake the status of being a third world country is easier said than done. Think about all the efforts that have been made over the years to help people: Live Aid, World Bank, Heal the World… the list goes on.
Some have been more successful than others, but nobody has stumbled upon a definitive model for fixing poverty. What about just giving the poor money? Seems like a straightforward concept, but would it actually work?
A Facebook big shot is taking his chances with Good Ventures, a charity that sends unconditional cash grants to the poor in Kenya and Uganda. Good Ventures was founded by Facebook co-founder Dustin Moskovitz and his wife Cari Tuna. Dustin has a net worth of $9 billion and has donated $16 million to be divided up with each recipient receiving $1,000.
Just handing money to people who live on less than a dollar a day might seem out of the ordinary, but has a track record of positive results. Giving out these cash gifts has proven to have an increase in infrastructure improvements like metal roofs and growth in employment. Recipients also spent the money on health expenditures and education. One thing that did NOT increase through spending was alcohol and tobacco consumption.
Is this strategy of helping the poor more productive than donating bed nets or deworming pills, though? Well, yes and no. Handing out bednets is more cost effective than handing out cash, and likely will have a positive effect on a person’s life immediately. Distributing cash is however infinitely scalable. There could come a time when a region is no longer threatened by malaria. The poor will always have a need for money – or at least the resources that money can buy.
Good Ventures strategy also allows the recipients to choose to spend the funds on what THEY believe they need the most. Maybe it’s a bednet, or maybe it’s a pair of shoes so they can go back to work and buy that bednet with their earnings.