Why Are Techies Like Chris Hughes So Keen on Giving Money Directly to Poor People?

These tech types have some gall. Just because they reinvented how we communicate with one another and navigate the world, some also think they can reinvent philanthropy. The nerve these pipsqueaks have, wanting to do things differently, as opposed to just cutting big checks to established players.

Take, for example, this crazy idea that Facebook co-founder Chris Hughes has that giving money directly to poor people is the best way way to help them—as if "disintermediation" can solve global poverty!

Seriously, though: Last year, Hughes and some very powerful friends of his (Drew Houston of Dropbox and Hermant Taneja of General Catalyst), hosted a party to introduce GiveDirectly, an NGO at which Hughes is a board member.

GiveDirectly supports what it calls a “radical new way to give: directly.” And at that wine and dine party, Hughes himself gave directly, to the tune of $100,000.

So just what is this new "radical" way of giving? It’s simple. Step 1: GiveDirectly receives donations through its website. Step 2: It finds poor households in Kenya and Uganda. Step 3: Cash is directly transferred to said households. Step 3: The recipient spends the cash.

Any questions?

And, no, we don't really believe that Hughes and company want to abolish traditional philanthropy. We track tech giving closely enough to know that many folks who are revolutionaries at the office do plenty of conventional giving. Hughes himself has sunk a fortune into reviving a century-old magazine, The New Republic. His spending there isn't philanthropy, but it might as well be.

As for giving money directly to poor people, there's something refreshingly old fashioned about that approach to charity—hearkening back to a day when churches passed the hat for families down on their luck. It's also the antithesis of fancy-pants elite philanthropy, whereby some social scientist dreams up a scheme to elevate the poor to a higher station—when, in fact, what most poor people want is a far simpler intervention in the form of cold cash.

Indeed, GiveDirectly's model is so disarmingly simple that it's taken some effort to get the most powerful players in the tech world behind the organization.

At the party thrown by Hughes, Jacqueline Fuller, Director of Giving at Google, shared a story of the time when she approached her superiors about supporting GiveDirectly. She explained the NGOs philosophy and the response she received was “You must be smoking crack.” Google did, however, get on board with a $2.5 million donation.

Hughes penned a personal message on GiveDirectly’s website regarding his thinking. He points out a slew of positive stats involving cash transfers, but also points out that nobody sees this work as a cure-all elixir for what ails the developing world:

Cash transfers to households are not a panacea—they don't build roads, write constitutions, or stabilize markets. But they do provide a critical boost to the poorest of the poor and are an important development strategy.

And like we pointed out before, Chris Hughes runs in a pretty powerful circle. Facebook cofounders Dustin Moskovitz and his wife Cari Tuna are also big supporters of GiveDirectly, and have donated millions to the organization through their foundation, Good Ventures.

So why the big draw from the tech world? As Hughes put it in a recent in interview with the Chronicle of Philanthropy:

A group of us tech folks have become very passionate about cash transfers. A lot of tech folks have donated to GiveDirectly, in particular, because there’s data, there’s impact, you can measure it, you can compare it to other kinds of interventions, and you can see what’s going the furthest for the money.

Of course, GiveDirectly isn’t without its critics. Some refer to it as a "flavor of the month" and an "experiment," while others worry about those cash transfers going down the drain. Some call it paternalistic, like an allowance for the poor, while others still say it’s just too soon to determine the overall impact of GiveDirectly’s work.

We aren’t going to weigh in on any side here. But we will say this: GiveDirectly's relationship with the heavyweights in the tech industry is a great example of the money that can flow to an NGO if you know how to open the right doors in Silicon Valley. We've seen similar examples of this, such as charity:water.

If you've got a cool idea for changing the world, even one for which the jury is still out, find a way to connect with tech philanthropists. Big rewards could follow.