GiveDirectly originated as a giving circle started by Paul Niehaus, Michael Faye, Rohit Wanchoo, and Jeremy Shapiro, students at MIT and Harvard, based on their research into philanthropy. In 2012 they formalized their operation into GiveDirectly. In December 2012, GiveDirectly received a $2.4M Global Impact Award from Google. In June 2014, the founders of GiveDirectly announced plans to create a for-profit technology company, Segovia, aimed at improving the efficiency of cash transfer distributions in the developing world. In August 2015, GiveDirectly received a $25M grant from Good Ventures. In April 2016, GiveDirectly announced a $30M initiative to test universal basic income in order to "try to permanently end extreme poverty across dozens of villages and thousands of people in Kenya by guaranteeing them an ongoing income high enough to meet their basic needs" and, if it works, pave the way for implementation in other regions. The initiative launched in November 2017 and is set to run for 12 years. In 2017, GiveDirectly applied their model for the first time in the U.S., distributing cash-loaded debit cards to residents of Rose City, TX following Hurricane Harvey.
In April 2016 GiveDirectly announced that they would be conducting a 12-year experiment to test the impact of a universal basic income on a region in Western Kenya. Working in rural Kenya, it plans to conduct a randomized control trial comparing 4 groups of villages:
Long-term basic income: 40 villages with recipients receiving roughly $0.75 per adult per day, delivered monthly for 12 years
Short-term basic income: 80 villages with recipients receiving the same monthly amount, but only for 2 years
Lump sum payments: 80 villages with recipients receiving a lump sum payment equivalent to the total value of payments of the short-term stream
Control group: 100 villages not receiving cash transfers
More than 26,000 people will receive some type of cash transfer, with more than 6,000 receiving a long-term basic income. In November 2019 an economics-oriented paper on the GiveDirectly experiment was published. It found the local fiscal multiplier to be around 2.6x.
Funding
GiveDirectly collects donations from private donors on its website as well as foundations. In 2015, the organization received a $25 million donation from Good Ventures, a private foundation started by Facebook co-founder Dustin Moskovitz and his wife, former Wall Street Journal writer Cari Tuna. In 2017 GiveDirectly received $5 million in Bitcoin from the Pineapple Fund.
After the release of GiveDirectly's impact self-evaluation in October 2013, World Bank economist David McKenzie praised the robustness of the study's design and the clear disclosure of the study lead's conflict of interest, but raised two concerns:
The use of self-reporting made the results hard to interpret and rely on.
The subdivision of the sample into so many different groups meant that there was less statistical power that could be used to clearly decide which group had better outcomes.
