GiveDirectly

GiveDirectly transfers money by cell phone to people living in extreme poverty. There are no strings attached to these money transfers and the recipients do not have to pay the money back.

Families can use it to buy much-needed food and medicine, pay school fees, or start small businesses. A large body of research shows that unconditional cash transfers reliably and sustainably help people overcome extreme poverty, unlike most conventional aid interventions.

The problem

832 million people live in extreme poverty, i.e. they have to get by on less than $3 per day. That is 10% of the world’s population. Although around 1.5 billion people have escaped extreme poverty since 1990, this trend has been reversed since the Covid-19 pandemic. The organization Our World in Data assumes that the number of people living in extreme poverty will rise to 932 million by 2040.^[1]

Caroline Teti, Vice President for Human Centered Design and Advocacy at GiveDirectly, describes very impressively in this video how this can be reflected in the everyday lives of those affected.

However, many traditional approaches to development cooperation (formerly development aid) are not sufficiently focused on the real needs of these people. Development programs are often driven more by political considerations (in both donor and recipient countries) than by the question of how to most effectively help people with the resources available. Traditional development cooperation is also often costly because it employs a large number of staff from donor countries who are paid relatively high salaries.

The solution

So why not just cut out the big aid apparatus and give money directly to people in extreme poverty? No one knows the needs of poor people better than they do.

Thanks to unconditional cash transfers, people can decide for themselves what is best for their lives. GiveDirectly transfers the equivalent of an annual income to people living in extreme poverty. In Kenya, this corresponds to around $1,000 for a five-person household.

These money transfers are extremely efficient: Of the donations made to GiveDirectly’s programs, more than 87% is delivered directly to the world’s poorest people, with the rest covering delivery costs (staff, bank fees, etc.). Because the money is transferred to people’s cell phones via mobile banking, it is virtually free from corruption. In addition, this approach is highly scalable and could theoretically be transferred to many other countries with little effort.

The impact

Cash transfers have been in use in many countries for around two decades and are now considered one of the best evaluated approaches in development cooperation. An evaluation of 165 studies shows that cash transfers are surprisingly reliable and lead to sustainable improvements in a variety of areas (including education, health, savings rate).^[2] In humanitarian aid, cash transfers can increase food security and are more cost-effective than in-kind contributions.^[3]

However, it was often feared that the recipients would spend the money on alcohol, drugs and the like. However, studies have repeatedly shown that this is not the case.^[4] The World Bank also sees targeted cash transfers as an effective means of combating poverty and inequality.^[5]

The positive results are also reflected in the evaluation of GiveDirectly’s work. The gold standard of scientific research, a randomized controlled trial, showed that GiveDirectly’s program in Kenya not only had a positive impact on the financial situation of participants, but also increased the psychological well-being of payees.^[6]

There is also evidence of so-called multiplier effects: Recipients of GiveDirectly payments usually spend their money in local businesses. This boosts the local economy: In previous studies, every dollar donated led to economic growth of $2.50, generating only minimal inflation. This demonstrably improves the financial situation of people in the region who do not receive any money themselves.^[7]

The organization

In search of the most effective way to combat poverty, students from Harvard University and the Massachusetts Institute of Technology founded GiveDirectly.. Right from the start, great importance was attached to ensuring that the projects are scientifically monitored and carefully evaluated . The organization is characterized by high cost-effectiveness and outstanding transparency: In GDLive Newsfeed recipients report voluntarily and unfiltered on their experiences.

The organization has grown significantly since its foundation. To date, GiveDirectly has disbursed more than 1 billion US dollars directly to over 2.2 million people (as of October 2026). Nevertheless, the growth potential is still enormous. By 2028, GiveDirectly aims to be able to deliver 5 billion US dollars or more per year – around ten times its capacity at the end of 2025. With existing partnerships with governments in the countries where it operates and increasing support from aid organizations and private donors, GiveDirectly is well positioned to reach millions more people living in extreme poverty.

In addition to this direct contribution to poverty reduction, GiveDirectly also tries to exert structural influence on the “aid industry” and thus increase the effectiveness and efficiency of development cooperation as a whole.

From 2012 to 2022, GiveWell recommended GiveDirectly as a “top charity”. Due to an adjustment of the evaluation criteria, GiveWell no longer recommends GiveDirectly, but the assessment as an outstandingly good aid organization continues unabated.^[8] Additionally, GiveWell recently increased its cost-effectiveness estimate for GiveDirectly’s Cash for Poverty Relief program by three to four times compared to the last assessment in 2019. ^[9] This update was driven by new estimates of the positive impact of direct payments on local economies, consumption and child mortality. This update has not changed GiveWell’s main charity and funding recommendations, but this may change in the future as upcoming studies of GiveDirectly’s work may further improve its evaluation. GiveWell continues to use cash transfers as a metric for determining cost-effectiveness.

Due to its indirect impact on development cooperation as a whole, we still consider GiveDirectly to be an outstandingly good aid organization and continue to recommend donations to the organization. The donations forwarded to GiveDirectly through us exclusively benefit programs in developing countries. Nevertheless, we would also like to point out that GiveWell considers its four “top charities” to be 2x more effective than GiveDirectly’s cash transfers.^[10]