This sounds great, and I'm certainly interested in following their progress.

I am curious what the effects are on those who don't receive the transfers. (Those who don't meet the requirements, or live in neighboring towns, for instance.) While I'm certainly not saying it outweighs the positive effects, there must be some negative unintended consequences. Someone uses the funds to start a business, which is enough to make an existing business in the field unprofitable for instance. I wonder how much research has gone into those types of side effects.

My understanding is also that direct cash infusions can have undesirable macro effects - basically Dutch Disease caused by aid money instead of natural resources. Again I'm curious to what extent those effects are understood.

If anyone has knowledge or links to resources along those lines, please share! I did find this somewhat more critical review[1] but it still just focuses on the recipients, rather than knock-on effects.

[1] http://www.ssireview.org/blog/entry/givedirectly_not_so_fast

Very interesting, and a stark contrast to the article about the Red Cross relief:

https://news.ycombinator.com/item?id=9664983

jbniche points out: "Just think the impact that would have had if it had been divided up and given directly to each Haitian adult. The adult population of Haiti is roughly 6 million, so we're talking about almost $100 per adult Haitian. Roughly, it's about 1/8 of the per capita GDP of Haiti. Imagine what you could if you were a poor American and received 1/8 of the American per capita GDP after a disaster (~6000 USD). That's a new roof, or a replacement vehicle, etc. It's not life changing, but it would have been very significant, and massive in scale."

https://news.ycombinator.com/item?id=9666390

and the article supports his point, saying that "A 2013 study in Uganda found that people who received cash enjoyed a 49 percent earnings boost after two years, and a 41 percent increase after four years, compared to people who hadn't gotten a transfer. Another study in Sri Lanka found rates of return averaging 80 percent after five years. In Uganda, not only were the cash recipients better off, but their number of hours worked and labor productivity actually increased."

But for smaller amounts (like the U$ 100 proposed), "One program gave $200 to at-risk Liberian men who were either homeless or who made their income from dealing drugs or stealing. The lead researcher, Chris Blattman, summarized the findings in an op-ed in The New York Times:

"Almost no men wasted [the money]. In the months after they got the cash, most dressed, ate and lived better. Unlike the Ugandans, however, whose new businesses kept growing, the Liberian men were back where they started a year later. Two hundred dollars was not enough to turn them into businessmen. But it brought them a better life for a while, which is the fundamental goal of any welfare program. We also tested a counseling program to reduce crime and violence. It worked a little on its own, but had the largest impact when combined with cash.""

An American architect tried building a school in post-earthquake Haiti. He struggled for a while with growing cost estimates, finding materials, and cutting through corruption and bureaucracy. At the end he thought that just giving them cash would have been better.

> If you could turn back the clock would you just write a check to all the parents of the kids who go to that school?

> “Definitely,” Meyers said.

http://thebillfold.com/2013/05/giving-money-directly-to-poor...

A detail popped out at me: that they picked people based on the material of their roof. Organics get money, metal doesn't.

I predict a "fashion" trend in the poor architecture of the region to eschew better roofs even if you can afford one.

I also think that an editor of a newspaper in Kenya and Uganda should do a cartoon where a villager uses his GiveDirectly money to buy a better roof, and then the company takes the money back and accuses the villager of fraud.

@5% average yearly return, Bill Gates + Warren Buffet could do this for 8 million people a year, every year, forever, and not eat a cent into their initial capital.

For scale: that's the population of Switzerland.

“Aid is just a stop-gap. Commerce—entrepreneurial capitalism—takes more people out of poverty than aid.” --Bono

Bono's brave enough to admit this.

Kenyan economist James Shikwati: "for God's sake, stop the aid:". http://m.spiegel.de/international/spiegel/a-363663.html#spRe...

I like the transparency that there seems to be around this as it makes me more likely to donate the money.

It seems to mean that basically they get 9% of donations to cover various costs. Both non-negligible but also not too bad.

Still would like to know what the "overhead costs" are.

Alaska paid residents $1,800 in 2014 under its Permanent Fund program (a negative tax).

When I get home I'm going to read the article thoroughly and do some digging. I've heard of organized charities failing miserably but this sounds too good to be true.

Does anyone know why there isn't an entry for this organization in charitywatch.org?

They made a real-time dashboard for a crowd-sourced remittance program.

90 cents on the dollar is extremely efficient. And from the sound of it all the studies indicate it's extremely effective as well.

Don't tell FOX News, as I'm sure they'll find a way to give this a negative spin.

It feels odd to call this a startup instead of a charity or non-profit. The normal goals of a startup vs a charity, which seems a better description for the things this company/group is doing, don't match well to me (edit in italics: forgot to finish writing this sentence). Nothing particularly wrong with calling it a startup I guess, just strikes me as odd.

This seems to be part of a larger turn towards more data and study driven aid than was the standard. Hopefully the larger nation state players can get around to using aid programs to reap longer term improvements vs the current short term and occasionally overall harmful effects some programs have been reported to create.

They should give it to them in monthly chunks rather than a yearly lumpsome. When you're poor it's easy to be financially irresponsible.

Given that most startups fail, one could consider the whole startup ecosystem a form of charity that, hopefully, produces enough wealthy people to keep the wheels turning. With luck, some of the beneficiaries of GiveDirectly prosper enough to start their own charity some day. The ultimate Y-combinator function?

A program that gives money to the poor creates a disincentive to get out of poverty through work. The welfare gain from the poor having more money should be weighed against the welfare loss of their working and saving less.