Today finds this Benjamin stacker a little flummoxed. See, I thought that I knew something about getting ahead financially. It turns out that the key to helping someone find success is easier than I’d originally imagined. One rather large (and apparently misguided) portion of my brain thought that some of these factors might be involved:
- Introduce them to other compelling role models who’ve walked a similar path
I now know that these are all wrong, stackers. What’s really important, apparently, is this:
To help the poor, just hand them money.
I’ll admit: I never knew that.
…and once they have money, you shouldn’t help them learn to actually hang on to the cash. There’s no reason for that. The entire reason that poor people don’t have money is because…well, because they just don’t have any.
Forget about an attention to income generation, investing, budget, or other time-tested wealth building.
Skirting Charitable Giving “Middle Men”
In a recent copy of FastCompany, I was introduced to a charitable group called GiveDirectly. In some ways, I love their premise: charitable organizations are often bloated, slow and ineffective. If you’re going to give, GIVE!
Here’s the GiveDirectly strategy: find people in Kenya who need money and get it directly to them.
What can go wrong?
On one side, I can see GiveDirectly’s point: most relief organizations in Kenya and other African countries are big fat scams. Overhead is high while results are pitiful. However, while I wholeheartedly agree that doing an end-around on these organizations makes a ton of sense, is handing someone cash the best option?
Maybe We’re Missing The Real Key
I don’t know enough about Kenya to remark on their individual struggles, but here in North America a lack of education and mentorship is often the problem. People from poor families are never taught to manage a checkbook, create solid income streams and succeed. Because we are often a product of our environment, we’re taught strategies that don’t work. In most situations, we aren’t taught at all. We watch our parents mess it up and act similarly.
I wish handing someone a pile of dough would help them lift themselves out of poverty. It is impressive that many of the stereotypes people have aren’t true: people don’t use this money for drugs, alcohol, or cigarettes. This cash does tend to benefit children. People do try to use the money to overcome adversity. However, until I see more data showing me that uneducated people without any money management skills can make financial decisions that will lift them from poverty, I’m more likely to be out back in the pasture, waiting for the pigs to fly.
I am not especially educated on the country of Kenya in particular. However, I am sure it’s not complicated than that. I’m assuming that there aren’t plentiful job opportunities in Kenya where someone can pull themselves up by their bootstraps and become anything that they want them to be.
Maybe giving them money directly is the only want to get it to them without going through a corrupt “charity” that really just takes from the people that it’s supposed to help.
Sure, giving a bum in America some money probably won’t teach them anything, but I’m willing to bet that the situation in Kenya is entirely different and much more complicated.
So are you saying that handing them money without any education must be the best solution? It’s actually a pretty straightforward situation (there’s a couple of typos so I’m not sure I grasp your point, Holly). They hand money to people. No education. Nothing.
Haha! Do you not edit posts for typographical errors? I really need to reread what I post!
Anyway, of course it makes more sense to educate people and “teach them how to fish.” The point I was trying to make is that giving them money might be a quick fix to provide people with help for their short-term needs (like food, temporary shelter, etc.) It takes a long time to completely change the entire system so they may want to provide cash assistance in the meantime as a way to bridge the gap. Does that make sense?
No reason to get so snappy over a couple of typos! It was early and I hadn’t had my coffee yet =)
That’s where I hate the internet….I wasn’t being snappy at all. Just didn’t understand the point because of one key typo that could have changed the meaning. Your point now makes sense. Statistically, your point resonates, too. People seem to be using the money in ways that improves their situation.
Haha! No worries! I really should proofread before I hit that submit button!
Although I’m fiscally conservative, I’m a bleeding heart liberal to my core. I hate giving to charity and wondering how much of that money is really going to help people. I am a sucker for bums on the street and I often give generously. Of course, they might buy booze or crack or something. Or, they might buy a meal and eat for the day. Regardless, I think that the charity is in the gift itself. I could, of course, try to create a program to educate him or her and get them on their own two feet….but what if they starved in the meantime?
Ah! I’m far too big a reader of Ayn Rand to give money to someone on the street. I always think to myself, “You could be, in this moment, creating something that I’d buy from you which creates value for both of us.” Cheryl finds this thought process incredibly annoying.
That’s ok. I’m super liberal when it comes to social issues and I’m sure that annoys people as well. Except for Greg of course because he is the one that made me the way that I am!
To be honest, I feel a little guilty about the life I’m able to live. Even when I was poorer, I had it better than most people on the planet. Clean water, shelter, and plentiful food are all things that are taken for granted here. Even a bum off of the street can walk into a store and get a drink of water out of a water fountain. For that reason, it’s my belief that people in this country aren’t really all that poor. At least they’re not poor the way that people are in other countries where they have a shortage of clean water, no food, no jobs, and no opportunities. Because I feel guilty about my lot in life, I probably overcompensate a little.
When it comes to the “real” poor in other countries, it absolutely breaks my heart. The children who are suffering and starving could very well be my own two daughters. I cannot imagine being a mother and having to stand by as my own children struggled and went hungry. To me, it is unfathomable. If an organization goes to Kenya, or anywhere, and chooses to give to individuals I can only hope that maybe it will save a child or a life, or provide some sort of opportunity that wasn’t there before.
Jenny @ Abundant.Life
But you’re assuming the poor are morally worse here or somehow morally superior in a place where they’ve often experienced nothing but deprivation, ignorance, and mistreatment. Unfortunately, it’s not that simple. One of the charities I donated to (they no longer need donations because the program is now self-sufficient) offers basic food for the homeless of Manila in the Philippines. They provide free shelter to anyone who agrees and who will follow the rules–no drugs, no prostitution, no theft, and you have to agree to learn a skill or participate in water-selling to work for an honest living. A lot of the street people are really at the edge of starvation and have no place to even sleep, but they’re deep in their lives of substance abuse or gangs, and most, sadly, don’t choose to leave if it means coming clean and working for a living. And people choose this for their children, too.
Every person who does choose to start a new life, whether directly through one of the vocational programs or some other way, makes it worth it. But most…..don’t. And living on the streets does eventually kill them.
You might go, “That’s crazy!” But it’s also crazy for a person today in the US to start smoking, but tens of thousands do every year.
Jenny @ Abundant.Life
I’ve offered jobs–real jobs–a number of times. I’ve never been taken up on them. They get more money from panhandling.
Jenny @ Abundant.Life
Actually, Kenya is one of the most developed SubSaharan African countries. There are enormous opportunities for Kenyan entrepreneurs right now.
Kenya’s a weird country to choose for this misguided charity. Why choose such a relatively well off country? Next it will be Nigeria.
I want help
Matt @ momanddadmoney
I actually listened to an episode of Planet Money recently that talked about this exact thing. The example was a guy who raised money and went down to Haiti to build a school and all of the problems that came with it despite his best intentions. The conclusion ended up citing research showing that simply giving cash is much more effective, despite all our reservations. The biggest problem with it is that it’s hard to actually raise money when you just say you’re giving it away. People are much more willing to donate when there’s something tangible they can see it going towards.
I totally agree that it’s MORE effective, based on some good reading about Africa relief organizations (see Adventure Capitalist as a good one)…but MOST? Is handing money without education a good idea?
My issue with your example is that this guy wanted to build a school….he was telling them what to do with the money (build). Wouldn’t it be better to hand it to them and teach them how to handle cash THEN they use it however they see fit?
Matt @ momanddadmoney
How much does the education cost? How do we make sure it’s relevant to their lives? What form of education is most effective in each different culture?
I can’t argue that good education is invaluable, but I don’t see giving education as inherently different from giving something like a school. It’s still us telling them the best way to do things, rather than simply giving them the resources and allowing them to figure it out for themselves. I can’t say for sure which is better, but I definitely don’t think it’s a surefire argument that providing education would help.
“I don’t see giving education as inherently different from giving something like a school.”
If that were the case, Matt, Detroit public schools would have a shot at being among the best in the country. 😉
But even if I cede the point, why would I support sending money to Kenya to give cash when I could do something similar here? Are poor Kenyans a better option than poor Americans? Does our capitalistic society make it difficult to do the right thing with money?
Matt @ momanddadmoney
I’m not sure where the implication that you had to give money to Kenyans rather than Americans came from, other than the one company you talked about is dedicated to Kenya. But you could go anywhere and find people in need to give cash to. I say give the money wherever you want. If you want to donate education, then go for it! It just might turn out that while it’s certainly coming from a good place, it may not actually be more beneficial, in the same way that the existing studies show it to be less beneficial for other kinds of donations.
Jenny @ Abundant.Life
If that helped, they wouldn’t need the money. Countries are poor because their government and culture keep them poor. No other reason. Cultural change is necessary for improvement of circumstances. Things as simple as “DON’T DRINK” actually require a fundamental cultural shift. “Take your baby to the doctor and don’t let it die” is another huge, huge cultural change. Listen to people when they come back from desperately poor countries–their frustration at the sheer waste of human life that’s accepted there is a major cause of burnout.
And what are they supposed to figure out on their own? Reading? Writing? Germ theory? Financial systems that took 700 years to create?
Female education is the strongest factor in preventing child mortality. Mothers who can read and write, who accept basic hygiene, who have at least somewhat rejected fatalism are much better at keeping their babies alive. I think that’s very good evidence that it works.
Jenny @ Abundant.Life
It’s more effective than a badly managed program. Far less effective than a well managed program.
Cash MIGHT get the three kids with parents the extra food we pay for. It won’t get them tutoring, though, or make sure they stay in school. Our money does that.
Cash certainly would not help the Restaveks of Haiti. You want a successful school? Look at the schools that feed and educate the child-slaves of Haiti so they can speak French, read, and do basic math and have a chance at not ending up with their own children as slaves as they are.
Cash wouldn’t do a thing for the little AIDS orphan in Swaziland we help support. Someone would just steal it from him. And it wouldn’t have gotten him the medical care he needed when he fractured his skull last week, either, playing with a brick.
There are things money can do, and microloans and scholarships, particularly, are awesome. But there are lots of things money CAN’T do. And with enough thought and foresight, a little funding can go a huge way. One Englishman in India in the Victorian era created a system that allowed a single instructor to teach several hundred pupils to a level of basic literacy and numeracy by having the older kids teach the younger. And the kids themselves figured out some brilliantly efficient ways of minimizing costs so they could let the school grow and keep the costs down. I wish I could remember his name! I’d share a link.
This is a powder keg of a post. I am firmly in your camp ~ the teach a man to fish camp (I love this biblical lesson although I myself am not religious). YET, as Holly points out…what do I know of other, less fortunate countries and their citizens’ ability to pull out of poverty.
I was introduced to Heifer International years ago, which is an organization that helps by giving animals to the poor, teaching them how to breed and care for the animals and then they have to pass on what they learn to someone else in their community. I love this model; it fits with my beliefs so that’s where I give if I donate outside of my own country, here in the US (of course, I do chip in for the occasional super disaster like the monstrous tsunami that hit the Solomon Islands in 2007).
Who knows if the GiveDirectly.org model will work, I guess time will tell. Their site was interesting (I gave it a quick pass) and if what they say on their financials page is true, it might just be a great idea.
Thanks for the great post,
Heifer is based in Little Rock, not far from me. That’s an organization that’s had a ton of success and seems to be picking up steam.
Mrs PoP @ PlantingOurPennies
I’ll echo my support for groups like heifer intl and micro loan programs, which combine direct support to individuals and families with education to enable them to use that support as a hand up rather than a hand out.
But I might also be easily convinced to name a daughter Dagny, so my politics are fairly clear from that line.
Ha! Micro loan programs and heifer also share some eye-popping success numbers. I love organizations like Kiva.
John S @ Frugal Rules
Nice post Joe, and one that gets me thinking on a Tuesday morning. 🙂 I would tend to agree with you, though there might be some outliers out there that would be able to make wise financial decisions but I doubt that is the norm. I am not well versed about Kenya, but having worked with a non-profit right out of college I know how many charities are bloated and thus a good chunk of the money does not get to those that would benefit from it the most. I like the idea of doing the end around the scammers in Kenya, in theory, but in practice I would have some serious doubts and even more so if done here in North America.
…which leads us back to Matt’s point: that’s why organizations such as this one have a difficult time raising money even though statistically they’ve had some amazing results. I can’t imagine sending cash to Kenya to give to someone I don’t know who will use it in an unspecified manner.
Pauline @ MakeMoneyYourWay
My neighbor wants to make a chicken coop for the school. But the villagers are just used to having people build them stuff with no strings attached. I think they will eat the chicks and they have no perene projects, that is the sad truth.
Slaughtering the goose who lays golden eggs….
I always try to provide aide in the form of food or clothing or some kind of material thing that can’t be misused (like money can). Of course, getting those kinds of things overseas are a lot harder than just sending money.
I agree, Stephanie. What stinks is that you don’t know what’s really needed. In Adventure Capitalist, Jim Rogers talks about stacks of 5k tee-shirts from Ohio towns all over the place. People send aid and none of it gets used.
Common Cents Wealth
I really like giving, but it can be tough to decide what type of giving would be best. Sometimes money is the best option, but other times some sort of item or lesson learned would go further than just handing them money.
Obviously, I agree, but I also wonder (based on this organization’s success) how heavy handed someone should be when giving? I know that I roll my eyes when people tell me what to do….
Bad: Give a man a fish, feed him for a day.
Good: Teach a man to fish, feed him for a lifetime.
Worse: Give a man a fish to give to another man, feed him for half a day.
Bad is better than worse, but still not good.
[cue: brain explosion]
Duly exploded, but awesome. I thought you’d appreciate Mrs. PoP’s Dagny reference…..
Perfect timing! My wife and I are getting a dog soon. I told her that I wanted to name the dog “John Galt” so all of our friends would publicly ask “who is John Galt?” Needless to say, she hated the idea and said she prefers a name ending in IE or Y. Dagny seems like a nice compromise!
Some though provocations there for sure, especially while I am still on vacation. I have no idea about Africa, but from my volunteer trips to provide eye care in Central America, I have seen how much more so little can do in a very poor population.
As for the US, I am totally for supporting those who are struggling, especially kids, but there should be some rules involved, like you can’t buy cigarettes if you get welfare, or how to shop on a budget should be a mandatory class. I have a whole list that I think someone should ask me about, but the President hasn’t called yet.
This is a very broad generalization, but from running a low income eye clinic out of my private office for a year, I’ve seen all manner of how to work the system. There are lots of young, health people who just don’t work, and don’t want to try. I’m not sure what the answer is but I do worry a bit as it seems younger generations have lost some of the pride that older generations seem to have held dear. That really makes me sound old, but it’s what I see.
I’m on the fence about giving directly. It’s a shame that so many charities are corrupt, but to me it makes much more sense to give money to a knowledgeable outsider who knows the specific problems Kenyans are facing and can make a plan for the money.
I don’t think handing someone money is going to solve any problems. However, providing a person with stuff to cover their basic needs AND giving them some kind of employment or education help seems to be more logical to me.
Grayson @ Debt Roundup
I am not sure how I missed this one. I can see how it could be effective to give them money upfront, but what does that really do? Yes, they can use it once and then they are done. You haven’t changed their situation. You only changed their situation for one day. They are no better off because you gave them cash. They learned nothing and don’t know how to change their own situation. This is why I don’t give money to beggars. Most use the cash to pay for something that will do nothing for them. My friend is in law enforcement and you would be astounded by what actually happens in the homeless population. If you gave me money, I could use it once and that would be it. I would then have to go looking for me. It is a constant cycle of wanting, not learning.
Grayson, they did a news report here in the Twin Cities one time that it’s not uncommon to see the guys on the street corners and highway exits that hold the homeless/looking for work signs making $20-$40k a year. Not too bad for take-home, tax-free cash for someone who has little to no housing expenses.
Jenny @ Abundant.Life
..and is only working four hours a day.
Standard here, too. I offer work, at better rates that they’d get from a landscaping company. They refuse.
Excellent point, Joe. We work with a ministry whose goal is to teach third world country families a skill with the money we and others donate, so they can learn to create their own income streams. For instance, we choose to buy a family a goat, so they can sell the milk, or we can send them a kit to start a garden, so they can grow veggies to feed their families and sell at market. A much better way to go about it, if you ask me. That being said, this organization also does give money too, in order to make sure they have that basic food/medicine/shelter so they’re healthy enough to work and learn to earn their own money.
HELP FOR HANDICAPPED AND POOR CHILDREN IN INDIA
Account Name- Suvendu Kumar Muduli
Account Number -31454011379
Bank Name – State Bank Of India
Bank Address- ADB HULURSINGHA (ANGUL) 2 LANE,
AMALAPADA ORISSA (INDIA) PIN-759122
the money is not everything in the wolrd.
I am trying to help my friend raise some money to pay overdue bills, he hadn’t worked for a while, although he just started a new job this past week it will still be over a month until his first paycheck.
He set up a blog to help raise the money, please share his blog or help by donating.
Here is the link to his blog: http://donatemoney-helpsomeone.blogspot.com/
I’m poor and I want to help by sending money and clothes 🙁