New Aid: An Alternative System Of Private International Aid Focusing On Direct Monetary Donation

Charity

A hand reaches out to help her up.

She grasps on.

As she’s lifted, a photo snaps

An image of support.

But before she fully stands, her hand is dropped.

She falls,

Sinking deeper into the hole she was in before.

It was only a performance.

-Chloe Koehler

I Introduction

As I sit here writing this, COVID-19 is ravaging the world with new all-time high surges happening across the globe; there is political unrest as the sitting U.S. president refuses to concede an election everyone else is aware he’s lost; pointless wars continue to wage on after decades. At each intersection of the myriad of tumultuous political, social, and medical events happening around the world, I can’t help but notice the ever-increasing wealth gap. A mere 1% of the global population accounts for over 44% of the world’s wealth (“Global Inequality” 2020). In 2009, the wealth of the bottom 50% of the world was equivalent to that of the 380 richest, but in 2018, only 26 billionaires had enough wealth to equal the lower half of the population’s wealth (“Global Inequality” 2020). In particular, COVID has illuminated and exacerbated this; billions of people are left unable to work, and those who are still able to work, are often the ones who could afford not to. Thus, as these statistics come in for 2020 and the subsequent few years, it is projected that the increase will reach ever-higher peaks. 

On the other side of this sits the industry of international aid. An industry that both aims to reduce the global wealth gap by providing money and resources to those in need, while simultaneously needing that divide to persist. The industry itself has grown in recent years: The Global Philanthropy Tracker measured total cross-border philanthropy in 2018 to be around $68 billion USD (“Trends & Themes”). This number means that private giving “is roughly equivalent to the 74th largest economy in the world” (“Trends & Themes”). Further, in combining cross border giving (the number above), private capital investment, and remittances (all categories that encapsulate the private aid sector), there was a total of $658 billion given in 2018 which was almost four times the number of Official Development Assistance (public aid) given that same year. The growth in the industry and the wealth gap seem to signify that international aid is not doing what its main goal should be. In theory, an industry with hundreds of millions of dollars that are supposedly poured into the hands of the people and governments who need them should lead to a lower wealth gap. And yet, the data clearly shows that this is not the case.

In this capstone, I explore this paradox by examining, more specifically, the industry of private international aid--both in its current state and in the form of alternative systems of aid that center on direct donation in order to situate my own positionality among the debate. In doing so, I am able to culminate that research by suggesting my own system that incorporates the successes of current alternative systems and offers solutions to their failures. 

The statistics above pertain to aid flows incorporating both private and public or official funds-- public/official funds refer to money coming from a publicly funded entity (government) vs private funds which come from non-publicly funded entities (non-government organizations, charities, foundations, etc). I am choosing to look specifically at private aid in the rest of this essay for several reasons. Firstly, there are far more regulations around public funds-- how it can be spent, by whom, for whom, etc. Public aid is often argued to be more for political gain whereas private aid can avoid the “political and strategic considerations that influence bilateral ODA,” which in turn allows for aid that can better match needs (Desai et al YEAR, 506). Secondly, corruption with public aid is more pervasive. Recipient governments often find themselves in a similar paradox as the aid industry itself, whereby they need funding to be able to provide for their citizens in the way they should-- create infrastructure, meet basic necessities, etc-- but if they do that, they no longer receive more money. Historically, this has led to large instances of corruption (Birdsall 2012, 9). While this can also happen when looking at private aid-- a recipient organization falling into the paradox instead of a government, the smaller scale makes it easier to monitor, account, and implement measures to avoid it. I also believe that the wider variety of donors and recipients-- everything from large multinational foundations to individual people, allows for more entryways into the private sector. Thus, my focus will be on the private sector. 

In the following paper, I begin by creating a foundational understanding of the private international aid sector historically and as it operates today. In doing so, I advance my argument that the current situation is not working. From there, I go into the background research into an alternative system of private aid that functions around direct monetary donations, analyzing some of the preliminary literature on similar systems. Then I will take a deeper dive into an organization that puts that alternative system into practice: Give Directly, analyzing the successes and failures of its model. Finally, I will combine all of this to propose my own model of private international aid-- an app that facilitates direct, person-to-person giving. 

I believe it is also important to state that this project is meant to be a dialogue. The background research used is in direct conversation with each other, the real-life model, and my app and vice versa. Each of these things has built off the others. Give Directly’s model was created using a lot of the preliminary research and analysis outlined in much of the literature I use. All of these things have also molded how I’ve planned my app, which is not meant to be the end-all-be-all. Private international aid is a complex system. While I hope that, on the whole, the system shifts to center more on direct giving, one company or organization’s version of that will never be the only one. Further, as the private aid system has evolved, it should continue to evolve. People should always question if it-- as a whole or individual organizations-- is achieving their intentions. 

II The Current System

The private aid sector has grown substantially over the past several decades (Adelman 2003, 9). In this context, private aid encapsulates foundations, corporations, PVOs (which includes volunteer time), universities and colleges, religious congregations, and individual remittances (Adelman 2003, 11). From 2000 to 2010, private international aid from US-based funders doubled (Desai et al YEAR, 505). Aid has grown such that, in the US alone, private aid is now over three times that of publicly funded US aid (Adelman 2003, 9). In Europe, while the total sum of private aid is substantially lower than in the US, the percent of growth in relation to government aid has also increased (Adelman 2003, 11). Further, it is important to note that because private aid is non “official” aid, tracking the exact numbers is difficult, and thus, it can be assumed that most numbers presented are underestimates (Adelman 2003, 11).

As previously touched on, this surge in aid has, surprisingly, not led to a reduction in global poverty. Thus, this highlights that there are fundamental flaws within the aid sector. These flaws are not new and have been discussed for several years. There are many critics of the foreign aid sector and those critics often fall into two categories: those that believe foreign aid as a concept is detrimental and does not lead to development, and those that believe that the current system of aid is detrimental but can be reformed (Birdsall 2012, 5). Those in the first category often contend that aid undermines development for several reasons. For one, it leads to inflation from large inflows of money, and it results in increased demand for skilled workers that competes with the private sector and the government (Birdsall 2012, 5). For another, it can result in a reduction in incentives to make improvements so that the recipients can continue to receive the aid (Birdsall 2012, 5). It can also weaken local institutions, including political ones, because the government becomes more accountable to funders than citizens (Birdsall 2012, 5). And lastly, aid can interrupt a country’s “self-discovery” (Birdsall 2012, 5). 

In a book entitled, Dead Aid, Dambisa Moyo positions herself in the first category. She claims that aid, particularly to African governments, allows these same governments to abdicate their responsibilities. Additionally, she argues that aid removes the need for the middle class and reduces taxes for people, which puts less pressure on the governing bodies to act on their behalf (Moyo 34). Moyo also classified aid into three categories-- humanitarian, wealthy people sending money, and government-to-government. She argues that the first two are irrelevant and don’t do much anyway, but that government-to-government is the problem.

In the years since Dead Aid was published, many critics have come forth and contended that Moyo’s account was too simplistic, and rather, it is not a question of if there should be aid, but rather, what that aid should look like. Aid in the form of a yes or a no response is too extreme and overlooks important points on both sides: aid has both made some advances, and aid has perpetuated some problems. Thus, there emerges a second camp of thinking that wishes to improve the current system.

Those in the second category also recognize many of these same flaws; however, they contend that the flaws are not with aid as an entity but with the way the current aid sector operates (Birdsall 2012, 5). They argue that “foreign aid is too often designed to primarily serve domestic constituencies in funder countries,” which can lead to things like tied aid-- aid funds have to be spent on goods and services from the funder country (Birdsall 2010, 5). In the private sector, rather than tied aid, aid can come with a multitude of stipulations dictating how it must be spent, which gives the funding organization immense control over the recipient organization. 

In a book entitled, Cash On Delivery: A new approach to foreign aid, Nancy Birdsall and William Savedoff position themselves in the second group as they argue for an alternative system. That alternative system is centered around direct monetary donation, which will be explored later. However, before going into their alternative, they problematize the current system. In doing so, they analyze some of the efforts toward reform that have already been made. They note that more recent responses have “steer[ed] foreign aid away from specific projects and toward broader sectoral or national budget financing” (Birdsall 2012, 6). Essentially, this means that rather than money going toward a specific endeavor, aid has gone to a larger entity (here they are specifically talking about governments, but in looking at the private sector this can also apply to large-scale private organizations). They argue that doing so “rewards responsible management,” which assists in creating a foundation for the recipient government or organization to be more self-sustaining and have more ownership over their own programs (Birdsall 2012, 6-7). This can also lead to a lower likelihood of corruption (Birdsall 2012, 6-7). However, they also note that these types of budget support systems are more based on “funders’ judgments that the plans are adequate or policies acceptable, and thus do not fully empower recipients” (Birdsall 2012, 7).

They go on to note that in 2005 over 90 countries and multilateral organizations committed to a lengthy set of reforms. However, reports have shown that actual progress has been limited. Birdsall and Savedoff conclude their analysis by contending that the crux of the problem with the current aid system is an enduring challenge of accountability: 

The combination of overlapping but divergent objectives with unshared and asymmetric information, particularly in a context of insufficient accountability, has produced the problematic relationship between funders and recipients at the heart of the many apparent failures of aid programs (Birdsall 2012, 10).

In an article entitled “What Motivates Private Foreign Aid?”, Raj Desai and Homi Kharas make similar arguments directed solely at the private aid sector. They begin their argument by noting the growth in the private aid industry, specifically looking at the US. They point out that, despite the US providing less than a quarter of global ODA, “US-based entities now provide more than two-thirds of global private foreign aid” (Desai et al YEAR, 505). They go on to discuss how alternative solutions, such as Kiva and “crowdfunding” alternatives, solve some of the flaws in the aid industry. Thus, they are further arguing that the private aid sector is not successful as it stands today and needs to move toward alternative solutions. 

Juxtaposing the growth in the international aid industry with the inverse lack of equal growth in the development of the Global South tragically testifies to how the industry fails to achieve its aims. As the aid industry has grown, scholars have noted this dilemma and articulated that the problems lie in the industry itself. While some believe the issues are fundamental with aid as a whole, more popular opinions, as well as my personal opinion (based on the evidence digested for this research paper) are that while the aid industry is immensely flawed, those flaws are not fundamental to aid itself. Rather, they can be fixed, and many scholars and professionals are already working on those solutions. One of which, and what will be the main topic for the rest of this paper, is a system based on direct monetary donation; a solution, I believe, that can alter (and in some cases is already altering) the private aid industry specifically for the better.

Importantly, however, I will not be including remittances in this next section, nor anywhere in this paper. Remittances refer to money usually sent between kin; one family member has gone to work in another country and sends money back as a “gift” to family/kin in their home country. Many consider remittances to be a foundational form of direct monetary donation. However, for the scope of this paper, I will not incorporate remittances as a part of my more elaborate dive into DMD giving. The remittance industry has greatly expanded, and in looking just at the US, has grown to be worth almost twice US ODA (Adelman 2003, 12). Because it is both quite large and quite informal (because it is kin-based), unpacking this sector would increase the scope of this research by a considerable amount. 

III An Alternative: Direct Monetary Donation

As the private aid industry mainly works today, individuals who want to donate will give their money (or goods) to a larger organization or charity, which often claims to put the donor’s money to good use (good use looks different to different charities and organizations based on what their individual aims are). Similarly, large foundations will give money to charities or organizations. Often, these recipient organizations are US- or Western-based organizations that go into other countries. In doing so, these organizations can displace local organizations that are trying to do similar work. 

For example, imagine in a rural village in the south of Kenya known as Kenya,there is no source of clean running water. Rather, local women go each day and walk an hour to the closest river to gather buckets of water to use for that day. Now, imagine there is a US-based charity that aims to bring fresh drinking water to every city, town, or village around the world. This charity hears about the situation in Narok Kenya and decides that it is the next place to which it plans to bring fresh water. The charity goes into the country and builds a well and water pump. It has had successes in other places, and thus assumes that its method will be successful anywhere there is a need for freshwater. The well and pump are up and running, yet they are rarely used. The only time they get used is when a group of people walking home from work in the hot sun stop to drink some. However, previously, there was a woman who sold bottles of water to these people each day who is now out of work. 

The women in the village still walk an hour each way to the river to collect water for their families. What the U.S. charity failed to identify was that that walk was uniquely significant for those women. That time was the only time in which those women were able to talk and engage directly and privately with one another. Having the space to do that was more important to them than the labor of walking, collecting the water, and carrying it back. Adding insult to injury, five years go by and the pump breaks. This leaves the people who need the water from the well on their walk home each day without anything, as the woman selling water bottles had to find a different job. 

While not specifically true, this story is an amalgamation of verified cases and is designed to give a succinct and tangible account of the failures of the current system, a system that failed to truly account for the needs in that individual community. Direct monetary donation, however, provides an alternative that could allow for community interests to be met.

As previously mentioned, Cash On Delivery, a book by Birdsall and Savedoff, argues for a system of direct monetary donation, which they call cash on delivery (COD) aid. One of the key aspects of this form of aid is that it is “a contract for funders and recipients to agree on a mutually desired outcome” (Birdsall et al 2012, 17). Thus, it makes sure to fully address the recipients’ needs and wants. Essentially, with this proposed system, a donor and a recipient agree as to what outcomes are expected and the recipient is paid based on outcomes, not inputs (Birdsall et al 2012, 17). The funder is not involved in the inputs at all. Thus, sole responsibility and ownership is given to the recipient. Transparency within this approach happens because the initial contract created by the funder and recipient, the amount of progress, and the payment for each increment of progress are all publicly disseminated (Birdsall et al 2012, 18). 

Birdsall and Savedoff argue that this system addresses several of the concerns in other aid systems. For one, it provides accountability among funders, recipients, and the involved public, because it allows funders to be accountable on several levels. Because the system is based on outcomes, funders have tangible results of where their constituents' payments are going in order to be accountable to those constituents. Further, it also requires accountability by the recipients through the necessity of transparency with public reports of the outcomes. The lack of accountability is a fundamental problem with the aid sector today, so any alternative systems that wish to be an improvement must include mechanisms that increase accountability.

Another way that this system combats issues with the current system is that it promotes local ownership and responsibility. Several studies have found that aid is more effective when the recipient “[has] full responsibility for their own policies and programs” (Birdsall et al 2010, 22). This has been a significant criticism with many current aid practices that allow the donor to set the rules regarding how exactly the funds need to be spent. Because this system pays for outcomes, it forces the recipients to make strategic decisions that result in those outcomes. Doing so also helps the recipients to better position themselves in the future, where they will no longer receive aid and can still expand.

As with any system, COD Aid is not without its drawbacks. The most significant being, because the system is outcome-based, funds only come after the first outcomes are reached. Thus, for very small organizations with little to no funds, this system doesn’t work, at least initially. In their explanation, Birdsall and Savedof argue that “funders commit to making COD Aid additional to their current and projected commitments” (Birdsall et al 2012, 30). This obstacle highlights that this particular system is better suited for larger recipient organizations and public aid. However, some of the fundamental principles still apply in looking at systems for smaller private organizations.

Specifically, the ideal is a system that directly provides recipients with funds where funders are more hands-off. This again fosters responsibility for the recipients. Further, the ideal system would also center on a similar level of transparency and set of goals agreed upon in advance so that the funder knows exactly what they are giving money for. 

As COD Aid came out in 2012, several new developments in the direct donation sector of international aid have occurred. Especially once the 2015 Millennium Development Goals from the UN set out to eradicate extreme poverty, these types of direct donation (or cash transfer (CT) programs) “spread rapidly across the world to reach more than 750 million people in low and middle-income countries” (Molyneux et al 2016, 1087). The expansion of this industry has brought criticisms, the largest being that often these donations do not accompany any sort of programs or skills training to tackle the causes of poverty themselves (Molyneux et al 2016, 1088). As literature is developing, so are the programs, many of which have tried to incorporate these deeper elements such as trainings and awareness-raising.

In an article entitled, “Can Cash Transfer Programmes Have ‘Transformative’ Effects,” Maxine Molyneux et al (2016) dive into the direct donation system in order to analyze its overall effectiveness. In doing so, they aim to look at the degree of impact on these types of programs. Have they truly evolved to a place where they are creating a larger community impact through social accountability and development? Do they fall under the category of band-aid solutions that only provide assistance in the short term? They found a mix of both. In many CT programs, they saw that the largest effects were on the individual level; recipients reported an increase in self-image, dignity, and assertiveness (Molyneux et al 2016, 1095). On a larger scale, while less so, there was evidence that CTs led to some broader social and political transitions where increased social accountability mechanisms “appear[ed] to have helped reduce corruption, improve service quality and empower people” (Molyneux et al 2016, 1095). They concluded by contending that more needs to be done through CT programs that involve specific initiatives targeted toward individualized social protection programs (Molyneux et al 2016, 1095).

These two articles highlight very different scales of the capacities of the direct donation system. COD Aid looks at aid given to larger institutions, whereas the article by Molyneux et al looks at aid given to individuals. Both come with their own successes and failures but articulate the multifaceted potential of this kind of system. Further, they also both highlight the positive evolution of this type of system. Direct donation-based systems have the potential to have very transformative effects if coupled to a deeper analysis of local needs for each project. In the next section, I will look specifically at one organization that does direct donation-based aid in order to analyze the effectiveness of its methodology. 

IV Case Study

An organization known as GiveDirectly emerged in recent years. It puts many of the ideas from the aforementioned discourse into action through creating a system that sends cash directly to those who need it. It advertises itself as “the first-- and largest-- nonprofit that lets donors send money directly to the world’s poorest” (“About GiveDirectly”). Essentially, it sends cash transfers to extremely low-income households or those affected by humanitarian crises in certain countries (“GiveDirectly” 2020). It began in 2009 and is active in Kenya, Uganda, Rwanda, Liberia, Malawi, The Democratic Republic of the Congo, Morocco, Togo, the Bahamas, and the United States (“GiveDirectly” 2020).

The organization historically focused on large, one-time, transfers to individuals. Its standard model usually involves two payments over several months, with a sum of around $1000 USD (“GiveDirectly” 2020). It is estimated that in this model, the average family receives about $288 USD per capita (“GiveDirectly” 2020). GiveDirectly has two main models for selecting beneficiaries (“GiveDirectly” 2020). Both models begin by identifying a region in need based on poverty rates, security, population density, accessibility, and the presence of other NGOs (“GiveDirectly” 2020). In villages with high poverty levels all around, the “village saturation model” is administered which gives transfers to each household in the village (“GiveDirectly” 2020). In the “household targeting model,” a census is conducted in order to identify the households that meet the threshold for being among the most impoverished (“GiveDirectly” 2020). Additional data, and sometimes audits, are collected from these households in order to make sure the funds are needed and being used accordingly (“GiveDirectly” 2020). 

In more recent years, GiveDirectly has also begun a study into a program around basic income guarantees where they “provid[ed] long-term, ongoing cash transfers sufficient for basic needs (“GiveDirectly” 2020). In 2017 they provided transfers to around 20,000 people (“GiveDirectly” 2020). Most people in the study received basic income for two years or a lump sum transfer for the same amount, but 5,000 people receive a basic income for 12 years (“GiveDirectly” 2020). On average, these recipients receive about $0.75 per adult per day (“GiveDirectly” 2020). The implications of these programs are still being analyzed and observed (“GiveDirectly” 2020).

Also in 2017, GiveDirectly started a separate program targeted toward refugees who had been displaced for at least five years and other households in the communities hosting them in Uganda (“GiveDirectly” 2020). The pilot study has shown positive results, but more analysis will need to be done to fully understand the true benefits, or lack thereof, for this system (“GiveDirectly” 2020).

Further, GiveDirectly has also recently begun a lot of work in the US concerning COVID-19 relief (“GiveDirectly” 2020). For such a new organization, GiveDirectly is trying out a lot of different methodologies. On the one hand, this can be seen as a strength of the organization because it emphasizes a willingness to put efforts and funds toward the initiative that shows the most success, it also has drawbacks. For one, most of these “experiments” are happening in countries in Africa (“GiveDirectly” 2020). Thus, GiveDirectly is trying out different methodologies on communities that do not hail from their own milieu and that may or may not have positive effects. In fact, some of the experiments are relatively innovative as far as research done on the likelihood of success, which leaves a much larger margin of error. 

While GiveDirectly is a relatively new organization and the true effects of this kind of a program cannot be fully assessed, those who support the program argue that it is highly effective. As previously discussed, the research around cash transfers has consistently pointed toward their success. However, much of the previous research has looked into programs that focus more on smaller cash transfers over longer periods of time, whereas GiveDirectly’s main model is larger one time transfers (“GiveDirectly” 2020). Thus, the more specific evidence for the successes of this program is more limited. 

Research into the organization has indicated the successes of the program. From 2011 to 2013 GiveDirectly conducted a randomized experiment where unconditional cash transfers were randomly given to recipients in western Kenya (Haushofer et al 2016, 2026). The research found that “treatment households increased both consumption and savings” (Haushofer et al 2016, 2026). Recipient households were more likely to invest in livestock and durable assets with excess funds rather than spending on “temptation goods” (Haushofer et al 2016, 2026). Further, they also found that there was not an increase in conflict from the transfers, but rather, further improvements to “psychological well-being and an increase in female empowerment with a large spillover effect on non-recipient households in treatment villages” (Haushofer et al 2016, 2026). On the whole, research suggests that GiveDirectly’s programs have had a positive impact and there is “little evidence that cash transfers caused inflation, negative economic effects on non-recipients, recipient spending on alcohol and tobacco, and community resentment or hostility toward recipients” (“GiveDirectly” 2020). 

However, GiveDirectly is not without its critics. For one, while the organization is experimenting with other models (the basic income transfers), its main method is a one-time large transfer of funds. While helpful initially, for those that do not have the mechanisms (equipment, training, etc) to turn that initial transfer into something that can continue to bring them money in the future, it can be a short term fix (Aizenman 2017). Kevin Starr and Laura Hattendorf wrote an article in the Stanford Social Innovation Review, critiquing GiveDirectly and described its program as “more of a 1-year reprieve from deprivation than a cost-effective, lasting “solution to poverty” (Starr et al 2014). Even looking at the income transfer program, the average length of time a recipient would get funds is two years (or just two years worth of income at once), which is still not a long enough time for them to establish their own means of income. In other words, GiveDirectly’s model does little to nothing to actually tackle the reason for poverty in the community itself. A lot of the research into the effects of the program note a significant increase in the mental health of recipients (Starr et al 2014). This has been attributed to a reduction in stress, which is thought to be because of the increase in decision-making opportunities (Starr et al 2014). However, after the funds run out, there is a high potential that that stress level will once again return.

Overall, GiveDirectly has made immense strides forward in streamlining cash transfers and direct monetary donation as a model of private international aid. It is a well-established organization that has had relative success over the last decade. Yet, its model seems to lack a fundamental component, which is a long-lasting system or process to assist recipients in creating a foundation to further their progress out of poverty when they are no longer receiving the cash transfers.

V Looking To The Future

I sat in a small, windowless, classroom on the 10th floor of a New School University building on East 16th Street in New York City. My professor had spent all class lecturing us on the failures of the international aid sector. As I listened to him highlight the advantages of direct cash as a form of aid, I suddenly got an idea: an app that could connect donors to recipients making this process as easy as checking one’s email or ordering Starbucks. 

It is now 14 months since that idea first popped into my mind. In those 14 months, I have researched in greater detail the international private aid industry, as well as cash transfers as one method for offering aid, and talked with several friends and professionals about the idea. I am still as passionate about this app as I was the day I scribbled my initial thinking all out in the back of my notebook. The idea evolved and new components were added, but at its core, it remains the same: an app that facilitates peer-to-peer private international aid. 

While most aid organizations look to large foundations or corporations to make mega contributions, “65 percent of total individual charitable contributions come from households with annual incomes of less than $200,000” in the U.S. (Desai et al 2018, 506). Similarly, individual contributions to other international causes and NGOs show similar data (Desai et al 2018, 506). In fact, “more than three-quarters of the total global funding raised by NGOs for humanitarian assistance comes from small-scale, individual donations'' (Desai et al 2018, 506). This is the population my app would specifically target-- individual donors-- and connect them to individual recipients.

While there is a lot of evidence that cash transfers have beneficial results, often people are reluctant to give money directly-- it feels too impersonal. Take, for example, a homeless person one encounters walking down the street. So often I’ve heard (and can admit have said myself in earlier years) that if given cash, that homeless person is simply going to waste it on drugs and alcohol. However, the reality of the situation is that if a person is truly struggling to the point where they are living on the street and do not know when or how they’re going to get their next meal or other necessities, in the vast majority of circumstances, they will spend any cash given to them on those goods. 

People want to know where their money is going in order to feel better about donating. This is a flaw that I saw within the GiveDirectly model. Funders of GiveDirectly include both larger foundations and individual household donations. As an individual donor, one can choose to donate to a program or just as a general donation, but you are not told where your funds are going in any specific sense. A high level of transparency will be a foundational element in my model.

The app will work to connect donors to recipients. Most aid and development discourse often posits donors as those in the global north, or ‘developed’ countries and recipients as those in the Global South or ‘developing’ countries. This language will not be a part of my system. Instead, there are givers of aid and recipients of aid, regardless of where they hail from. Thus, my app will target and benefit both populations. 

As someone seeking support, you would have a profile that lets other users-- both donors and other recipients-- see who you are and what your needs are. While any money given would be without stipulations-- the recipient could spend it how they like-- their profile might highlight some things on which they are planning to spend any money they receive. This form of unconditional aid is a foundational part of the GiveDirectly model and is important for several reasons. For one, it promotes autonomy among recipients. People don’t like being told how to spend their money and on the whole, will spend their money on things that they and their loved ones need before spending it on extravagances or trifles. For another, it helps to facilitate and cultivate a better relationship between recipients and donors. Further, this can help account for some of the unintended consequences that often occur when international organizations involve themselves in communities that are not their own (like the water well example from above). However, unlike the GiveDirectly model, this model would be much more personal. Donors can know exactly who their money is going to and have a good idea of how that money will be spent. This helps remove the impersonality of cash transfers. 

Additionally, I would like there to be the capacity for direct interaction between donors and recipients where donors can send a personalized message with their donation and recipients can express their gratitude back. This element is still a work in progress-- as is the whole system. Because it will be an international app, there would need to be some sort of translation process. I think it would also be important to have a filtering process to make sure all the comments are respectful and appropriate. Having this element would be, I believe, an integral part in appealing to donors-- which is paramount in having something like this succeed-- as it again adds a very personal element.  

Another important element will be the networking and social media component. In the modern age of technology and social media, online social connections are extending past the typical social media sites. Venmo, for example, is an app where people send money back and forth. However, because transfers can be publicly viewed (if your settings allow) the app has evolved to have a social media element. My app will involve something similar where, depending on the user’s personal settings, transactions would be public. Doing so has the potential to incentivize more competition among donors, which increases overall giving. On the recipient side, there will also be a networking aspect where beneficiaries can connect with one another in order to give each other advice and other networking potential. As clarified above, cash transfer systems often fail to help recipients build a long-term foundation for wealth creation. A networking function helps to account for this previous gap and allows awardees the ability to better position themselves for longer-term financial success. 

This app idea is still in its conceptualization phase, and thus, is still evolving and changing. I believe that this fluidity is an important element that should be continued even after it is made. New research and thinking is constantly coming out, and the most effective program is one that can adapt to that new thinking. While the aim will not be to conduct experiments on peoples’ lives (as GiveDirectly is currently undertaking-- the ethics of such projects are up for debate), making sure that best practices are occurring is paramount. 

VI Conclusion

The international private aid sector underwent many expansions and shifts in recent years. Previous thinking about aid as needing to be more regulated or goods-based is no longer the dominant trend. Rather, new ideas about direct donation-based aid are growing in popularity. Organizations like GiveDirectly are taking this newfound trend and putting it into practice, implementing systems where those in need are receiving cash as a new form of aid. 

Because thinking around these alternatives is still relatively new, the best systems for this type of aid are still being created. By researching current practices that have been failing, as well as studying challengers to these failures, I gained new insights into best practices in this field. In doing so, I cultivated an idea for an app that would implement these aspects and build on them further. 

Once more, this system is not meant to be the only solution or system in the aid sector. This app would address issues in a relatively narrow sector of the broader development discourse: private aid targeted toward small businesses that work to better their communities. Other aid systems in areas targeted toward the public sector, individuals, other types of businesses, etc are needed to actually have global and systematic change. However, having one solution to a narrow sector remains vital because each sector has idiosyncratic needs. Thus, as mentioned earlier, this conversation and the development of these systems need to be fluid, in conversation with one another, and always progressing when new research and discourse is found.

References 

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“About GiveDirectly.” Accessed November 27, 2020. https://www.givedirectly.org/about/. 

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Molyneux, Maxine, Nicola Jones & Fiona Samuels (2016) Can Cash Transfer Programmes Have ‘Transformative’ Effects?, The Journal of Development Studies, 52:8, 1087-1098, DOI: 10.1080/00220388.2015.1134781

Moyo, Dambisa. Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. New York: Farrar, Straus and Giroux, 2010. 

OECD (2020), Total official and private flows (indicator). doi: 10.1787/52c1b6b4-en (Accessed on 10 November 2020)

Starr, Kevin, and Laura Hattendorf. “GiveDirectly? Not So Fast. (SSIR).” Stanford Social Innovation Review: Informing and Inspiring Leaders of Social Change, March 11, 2014. https://ssir.org/articles/entry/givedirectly_not_so_fast. 

“Trends & Themes.” Global Philanthropy Indices. Accessed December 16, 2020. https://globalindices.iupui.edu/tracker/themes/index.html.