Facebook Billionaire's Good Ventures Donates $25 Million To GiveDirectly, Which Gives Cash To The Very Poor

Facebook cofounder Dustin Moskovitz and his wife, Cari Tuna, are announcing Monday that their philanthropic foundation, Good Ventures, is donating $25 million to a new kind of nonprofit, GiveDirectly, which gives extremely poor people cash instead of traditional aid. GiveDirectly works in Kenya and Uganda. Research has shown that the cash transfers it provides have helped improve people’s lives. 

“Governments and donors spend tens of billions of dollars a year on reducing poverty, but the people who are meant to benefit rarely get a say in how it’s spent. GiveDirectly is changing that by transferring money directly to extremely poor individuals and families, with no strings attached,” Good Ventures President Cari Tuna says in a post about the grant.

In Kenya, GiveDirectly uses a system called M-Pesa, run by Vodafone , to transfer money to poor people’s cell phones. In Uganda, it transfers money to phones through cellphone network MTN. The cash transfers are typically about $1,000, which Good Ventures’ Tuna says is about a year’s income, on average. 

Recipients do a variety of things with the cash. Some swap out the thatched roof of their home for a metal one. A recipient named Gabriel in Kenya built a house and a chicken coop and bought woodworking tools with the cash. Another Kenyan recipient, Joseph, bought a generator and a water pump to irrigate his crops.  Research conducted between 2011 and 2013 showed improved well being in the short term as a result of the grants.

GiveDirectly is built on the principle that poor people know their own needs better than anyone else. Since GiveDirectly began making cash transfers several years ago, the idea has garnered plenty of attention. “It’s raised questions about the roles institutions should be playing,” says GiveDirectly cofounder Paul Niehaus. “There is something powerful in the unconditional grant.”  The nonprofit has received donations previously from Google and Facebook cofounder Chris Hughes. 

GiveDirectly will use at least $16 million of the new grant from Good Ventures to provide cash transfers to poor people. It plans to spend at least $6 million over the next several years to build a marketing and fundraising team. Currently, GiveDirectly has about 70 people on the ground between Kenya and Uganda and a smaller team in New York. 

Nonprofit GiveDirectly has big goals. “It envisions a world in which billions of dollars are transferred directly to the poorest people every year. GiveDirectly wants to help governments and other NGOs use cash transfers as the ‘standard of comparison’ for aid programs — and ultimately shift resources from less cost-effective programs to cash transfers,” says Good Ventures President Tuna in her post.  Good Ventures has previously given $12.6 million to GiveDirectly, including a $5 million grant in December 2014.  “GiveDirectly is one of the most outstanding charities we’ve ever encountered, and we are deeply excited to help it pursue [its] goals,” says Tuna in her post.

Moskovitz, who was roommates with Mark Zuckerberg at Harvard and a Facebook cofounder, left the social networking site in 2008 but held onto a good chunk of his shares; he then founded software firm Asana. Forbes estimates that Moskovitz, who is just 31 years old, has a net worth of $9.6 billion. Moskovitz and Tuna signed the Giving Pledge and have been very transparent about the grants that their Good Ventures foundation has made. This grant to GiveDirectly is the largest it has made so far.

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