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Margaret Wente

Margaret Wente

MARGARET WENTE

In the charity world, cash is the new goat Add to ...

The giving season is here, and people’s hearts are overflowing with good intentions. This year, nothing says “good intentions” like a goat, donated in the name of your loved one to a needy family in Africa. Goats are good for any occasion, not just Christmas. Now there are birthday goats, wedding goats and, for all I know, bar mitzvah goats.

Goats (they’re so cute!) are currently the hottest marketing tool in the international aid agencies’ arsenals. Plan Canada’s goat ($75) is voiced by Gordon Pinsent. Oxfam has a goat ($58), and so does World Vision ($100). “A goat provides milk, meat, manure, offspring, and income for years to come,” promises Food for the Hungry ($75). “This gift comes with training to build a pen and prepare the feed. The recipient family agrees to give the goat’s first kid to a needy neighbour, doubling your gift’s impact!”

If you don’t like goats, there are also cows, pigs, and hens – a veritable barnyard of photogenic livestock, depicted with happy, photogenic kids in far-off lands. Charity marketing directors say the key to attracting donors, especially new ones, is to make their gifts personal and tangible. And what’s so wrong with that? What better way to teach your kids about charity and show how kind you are yourself?

Let me count the ways. For starters, it’s inefficient. Someone has to identify the deserving family, secure the goat, deliver the goat and train the family to take care of the goat. That’s an awful lot of overhead.

Also, there may not be a goat. An actual goat – the one with your name on it – is seldom involved in these transactions. The charity takes your money and spends it however it thinks best. Some people will get goats. Some will get other stuff. This is usually explained in the fine print.

But the real problem with goats is that giving one is all about us. We get to feel all warm and fuzzy. Meantime, millions of poor people don’t actually want or need goats. What about them?

This question was the inspiration for a radical new charity called GiveDirectly. It gives money to poor people and lets them decide for themselves how to spend it. It figures they know more about what they need than aid agencies do.

“The abundance of data suggests that people are poor not because they lack initiative but because they lack resources and opportunities – things that, in many places, money can buy,” Christopher Blattman and Paul Niehaus wrote recently in Foreign Affairs. (Mr. Niehaus is a co-founder of GiveDirectly.) GiveDirectly targets its efforts to people in the poorer parts of Kenya and Uganda, who typically make no more than a dollar or two a day. They send the money to people’s cellphones using electronic payment services. (If someone doesn’t have a cellphone, they give her one.) A family will get about $1,000, a year’s income, spread over two payments.

One recipient was Bernard Omondi, a young Kenyan father of two who worked as a day labourer, when he could find work. He used part of the money to buy a second-hand motorcycle and start a taxi business. By last year, he was making $6 to $9 a day, he told an NPR reporter – several times his previous income. Few people squander the money, even when there are no strings attached. In one unconventional experiment Mr. Blattman conducted, researchers gave unconditional grants of $200 to drug addicts and petty criminals in the slums of Liberia. Most used the money for basic necessities or to start a business.

GiveDirectly is rated as one of the most effective charities in the world by the charity rating agency GiveWell, which uses rigorous, evidence-based analysis. One reason is that it’s so efficient. Out of every dollar donated, 91 cents goes to the recipients. That’s a lot more bang for your buck than goats.

Giving money directly to the poor can’t solve everything. Clean water, public health and the fight against debilitating diseases need large, co-ordinated efforts and outside expertise. They also produce spectacular payoffs in quality of life and productivity. It’s no accident that other charities on GiveWell’s “best of” list include deworming programs, a program to address iodine deficiencies and the Against Malaria Foundation. (Note: These last two programs have tax-deductible status in Canada.)

Alas, deworming pills aren’t as cute as baby goats. But if you really want to help the poor, you need to use your head as well as your heart.

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