I gave away money without knowing if it will do good

Let me start this post with a disclaimer. The intent of writing this blog is not to brag about my charitable donation. (Trust me, it is nothing to brag about and there are plenty of people who donate or volunteer more). Rather, I want to shed some light on a type of charity I strongly believe in. A form of donating that is sometimes frowned upon and remains a bit of a mystery. A type of giving that ask nothing in return from the receiver. And therefore, a type of giving that has the potential to fund people’s drug and alcohol addiction. Yet, also a type of giving that has the potential to eradicate global poverty within our lifetime. In a nutshell, it is the concept of giving money to the poor without any conditions. Let me explain.

Idealistic student

During my Master’s degree I had a module on ecological economics. In this class, we explored different alternative economic systems. System that wouldn’t exploit the finite resources on our planet. Systems that centred around human and ecological wellbeing rather than consumerism. And even systems that would shrink our economies rather than grow them. It was by far the most interesting module during my entire school career. It was also this module that introduced me to the concept of a Universal Basic Income. I became mesmerised by this concept and have been reading books and studies on this topic ever since.

Universal Basic Income

The Universal Basic Income is a concept that aims to give every person on this planet a liveable wage. Rich or poor, the Universal Basic Income doesn’t put any conditions on who receives the money. It also doesn’t put any restrictions on how people should spend this money. How does giving money to the rich solve world poverty, you ask? Two reasons really. A 10th of the world’s population lives in extreme poverty. Government and aid organisations have developed increasingly complex systems to help the poor. Most of the money in these systems never actually reaches the poor. It would take about $80 billion a year to eradicate poverty using the Universal Basic Income. This sounds like a lot. But it is only half of what we spend yearly on global aid for the poor. So, in essence, the Universal Basic Income aims to be more efficient and direct about solving poverty using a lot less money. It aims to help the poor by simply taking away their poorness.

A big experiment

There is a lot of evidence that Universal Basic Income could work (a lot better than for example microloans). A nice beginner’s book on this topic is “Utopia for Realists” by Rutger Bregman. Or you can check all the scientific studies on this reference list. (One interesting study found that poverty decreases cognitive function. The cognitive function increases immediately after the person stops being poor.) The evidence in these sources shows that free and unconditional cash transfers have long-lasting benefits on poor people and don’t lead to the consumption of alcohol or drugs. So far, the Universal Basic Income sounds incredibly promising. The only problem is that these studies were either really small or referring to other forms of cash transfers. There has never been a large-scale study on the Universal Basic Income. And although the theory all adds up, we don’t really know if it will work until we try it.

It exists

As I was looking into charities to give to during the festive period, I checked my go-to source ‘The Life You Can Save’.  This non-profit was founded by the philosopher Peter Singer. The organisation draws up lists of charities that are truly effective in fighting extreme poverty or suffering. When charities are run like a business, with big marketing departments and fat bonuses for the CEOs they don’t make the cut on their list. I really recommend having a look at their listed charities. (I promise, none of the others are experimental in their effectiveness). It was on this website that I bumped into GiveDirectly. This charity gives unconditional money up to living wage (basically a Universal Basic Income) to the poorest people and refugees in Kenya, Uganda and Rwanda. Just $25 could provide a person in Kenya with a one month living wage. I was so excited that GiveDirectly was putting into practice, what I had read about for so long. GiveDirectly has rigorous reporting on the effectiveness of its trial, that is independently verified by a third-party charity. So, we will all be able to read about the effects of the trial in their reports and publications.

I donated to the cause and subscribed to the e-mail list to stay up-to-date on their findings. Giving to charity is incredibly exciting when you are invited to read about the effects. There is a chance this experiment could fail (although so far, all the results are positive), but I am incredibly chuffed for the possibility that it won’t.

Do you have a charity you would recommend?

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