Michael Faye of GiveDirectly Stops by Purpose

The Purpose team had the pleasure of hearing from Michael Faye, Co-Founder and Executive Chairman of GiveDirectly, during our weekly Tuesday staff meeting. GiveDirectly, founded out of MIT and Harvard in 2008 and recently featured here on the Huffington Post, currently works in Kenya and Uganda where it engages mobile technology to manage and deliver unconditional money transfers to the extreme poor. This differs from the traditional model of charitable giving, which involves an individual or foundation donating money or goods to a large nonprofit organization that then works with middlemen parties to distribute at least a portion of these donations on the ground. GiveDirectly’s model cuts out these middlemen, thereby creating a direct relationship between donor and recipient.

Purpose staff had an engaging conversation with Faye as evidenced by the quality and quantity of questions they asked. During the Q&A session, Faye explained GiveDirectly’s process of determining who will receive its cash transfers. The system is based on a process of “targeting, auditing, transferring and monitoring,” targeting being particularly interesting. Faye explained that any person with a thatched roof, one made of organic materials, is eligible to receive a transfer whereas anyone with a tin roof is not, and he backed this statement with three supporting reasons. First, roof type information can easily be collected from satellite imagery. Second, it is easy criterion to explain to both donors and recipients. Third, and perhaps most importantly, the type of roof a person has in these places is indicative of poverty level. Of course, not everyone will be able to receive a transfer so relying on a consistent system of distribution is essential.

Another question came from a more philosophical angle about how a cash transfer recipient “should” spend his or her money. On this, GiveDirectly is not prescriptive. They believe that their role is to provide the data on impact, and to let the donor decide whether it is something they want to support. In other words, GiveDirectly allows both recipient and donor to make the choice for themselves. Faye noted that it is a difficult question to decide whether expanding one’s house or starting a band is more valuable. For him personally, it is the individual recipient who ultimately knows best.
We at Purpose are very excited to see where GiveDirectly heads in the future as it continues to scale and rigorously measure its impact, as direct cash transfers gain popularity and as “evidence-based” and transparent work become increasingly ingrained elements in charitable giving.