Can cash handouts replace aid? Kenya offers some answers
"My family often went to bed hungry, my children were sent home from school for unpaid fees and I was buried in debt," said Karisa, a father of five.
Now he beams at his lush farm blooming with okra, the result of a one-off donation of 110,000 Kenyan shillings (roughly $930 at the time) from a New York-based NGO, GiveDirectly.
He used the cash to lease a plot of land with two neighbours in his village of Milore, install an irrigation system and start farming.
He built up credit and bought two cows, as well as a chainsaw he rents out for 2,000 Kenyan shillings at a time.
"If they had given me food, it would have been long gone by now," Karisa told AFP.
"But with the money, I have been able to change my life."
GiveDirectly believes charities and NGOs should stop handing out things like food and school books, and start just sending people cash.
It has given donations to almost 1.5 million Africans, and has carried out 25 studies across the continent to measure the impact.
Fears the money would be misused or wasted were unfounded, it said. One Kenyan study found that families generated $2.50 for every $1 received.
"We can show evidence of cash having reversed domestic violence, improved child mortality, improved business outcomes, made families healthier, children accessing more education," said Caroline Teti, GiveDirectly's vice president for risk in Africa.
- 'Poverty doesn't wait' -
With the United States and other Western countries sharply cutting aid in recent months, GiveDirectly believes cash handouts offer a way to do more with less.
Traditional aid systems spend vast amounts on planning, supplies, transport, offices and expensive Western staff.
A 2022 study by the University of Washington found that back-office costs in the United States ate up 30 to 60 percent of budgets for global health projects. Much more was lost getting supplies to the final endpoint.
GiveDirectly still has overhead costs, but says 80 percent of donations goes directly into the hands of recipients.
"Cash is not a magic bullet," Teti said. Governments are still needed for fundamentals like schools, health facilities and electricity.
But for improving livelihoods of the poor, cash can be effective and fast.
"Poverty doesn't wait," Teti said. "One year is enough for a girl to drop out of school... for a mother or child to die."
Other aid agencies have embraced the concept over the past 10-15 years as hundreds of studies have shown its efficacy.
The Norwegian Refugee Council now gives 20 percent of its aid in cash, but could easily give as much as 45 percent, said Tariq Riebl, its strategy and innovation director.
Even USAID -- before being gutted by the administration of President Donald Trump -- finally backed the use of cash payments in a policy paper last October, after years of internal pushback.
The only real obstacle, Riebl told AFP, is "latent conservatism" in the aid sector: "There's something more comforting about handing over a kit of non-food items or a sack of rice, than giving cash."
- 'Dilemma' -
Cash is not suitable everywhere, such as war zones where markets barely exist, or when specialist items are needed like ID cards for refugees, or HIV medication.
Doctors Without Borders (MSF), a medical organisation, has twice used cash transfers when markets collapsed: in Syria in the mid-2010s and recently in Sudan's Darfur region.
But they were exceptions.
"Cash for healthcare remains very rare," said MSF's advocacy head, Tarak Bach Baouab. "We want to be sure of the quality of our programmes so we prefer sourcing the drugs and equipment ourselves."
Nonetheless, there is a dilemma.
"We're not there to tell people what to do with their lives. It's not very empowering and it creates a lot of dependency," Baouab said.
"But if you give cash to a family and they don't spend it in the right way, then we might see health outcomes diminish."
GiveDirectly sees this as a selling point for giving cash wherever possible.
"Lives can only be changed by the people who are living that life," Teti said.
"We are giving them dignity and we are giving them choice."
mnk-er/cw
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
20 minutes ago
- Yahoo
Investors see risks for market as Powell walks tightrope at Jackson Hole
By Davide Barbuscia NEW YORK (Reuters) -Investors are bracing for volatility as Federal Reserve Chair Jerome Powell walks a fine line between curbing inflation and supporting the labor market, with thin August trading poised to magnify any market moves from his Jackson Hole speech on Friday. Wall Street largely expects Powell will signal an imminent easing in monetary policy, but concerns that U.S. President Donald Trump's tariffs could reignite price pressures may force him to tread carefully. Meanwhile, Powell faces relentless pressure from the Trump administration to cut interest rates, turning his final address as Fed boss at the Jackson Hole economic symposium into a test of Fed independence. "There is a market tightrope here from a macroeconomic perspective between the inflation data and what's happening in the employment market," said Tony Rodriguez, head of fixed income strategy at Nuveen. "And now you combine that with the political tightrope that's not usually there that he has to navigate. It makes for an incredibly difficult, tricky situation," he said. Adding to the drama, Trump on Wednesday urged Fed Governor Lisa Cook to resign over mortgage allegations raised by one of his political allies, intensifying his effort to gain influence over the U.S. central bank. Cook said she had "no intention of being bullied" out of her post. "This (Jackson Hole) would be a good opportunity for Powell to speak about the importance of independence," said Idanna Appio, portfolio manager at First Eagle Investments, noting that the pressure could eventually lead to a more dovish rate-setting Fed board. A soft July jobs report and hefty downward revisions to earlier job figures fueled bets the U.S. central bank would cut interest rates from the current 4.25%-4.5% range later this year. But a surge in wholesale prices in July dimmed investor hopes for a half-point move at the Fed's next rate-setting meeting in September, leaving markets braced for about two 25 basis point cuts for the rest of the year. So far, consumers have been spared a sharp jump in prices despite Trump's escalating import tariffs, but doubts linger over how much of those duties will filter through to households in the months ahead. "I expect that Powell will signal a change in monetary policy that suggests that we'll resume the rate-cutting cycle on September 17, and markets will welcome that news," said Michael Arone, chief investment strategist at State Street Investment Management. "But I think he'll be reluctant to give too much transparency on the future path of rate cuts, because he knows what he doesn't know," Arone said, referring to the inflationary impact of tariffs. 'EXPECT VOLATILITY' Investors see any pushback from Powell against an imminent shift to monetary policy easing as the biggest risk heading into the Jackson Hole, Wyoming, event, with poor liquidity in summer trading expected to exacerbate the market reaction. "It's next to the last week of August, it's Friday, markets might be a little more susceptible to some volatility as a result of a little bit less liquidity ... (this) might lead to something of an unexpected move," said Rodriguez at Nuveen. Powell's speech comes amid market concerns of stagflation, a dreaded mix of sluggish growth and sticky inflation that could limit the Fed's ability to ride to Wall Street's rescue, just as a tech stock selloff this week highlighted long-standing worries over steep stock valuations. "Stagflation is a risk," said James Ragan, co-chief investment officer and director of investment management research at D.A. Davidson. "If Powell pulls back on the expectation for a rate cut in September, I think stocks would fall in that scenario and you obviously would see probably bond yields rise at least at the short end," he said. To be sure, Powell's address may ultimately be underwhelming for markets. Hot producer prices data in July removed the possibility that the Fed could deliver a jumbo-sized cut in September, limiting the scope for resistance from an inflation-focused Powell against those expectations. At the Jackson Hole conference in 2022, Powell echoed late Fed chair Paul Volcker with a hardline vow to crush inflation. This time, with inflation about 1 percentage point above the Fed's 2% target and a softening but still healthy job market, a subtler balance could be in the cards. Still, a balanced message could be perceived as hawkish, sparking price fluctuations in stocks and bonds over the next few weeks, said Shannon Saccocia, chief investment officer for wealth management at Neuberger Berman. "Our advice to clients has been to expect volatility," she said.
San Francisco Chronicle
22 minutes ago
- San Francisco Chronicle
3 principles to invest by, whatever comes next
I recently opened a second-quarter investment account statement, not to euphoria—but relief. Let's not forget, US equities flirted with a bear market earlier this year. There were concerns that China's DeepSeek artificial intelligence would bring down US technology titans. There were the tariffs. Yet, here we sit in the third quarter of 2025 with the Morningstar US Market Index up nearly 8% for the year and the Morningstar US Core Bond Index having returned more than 3%. Principle 1: Where the market goes, nobody knows Coming into the year, how many pundits talked about AI out of China challenging US tech stocks? Did anyone expect tariffs to be such a factor? Though 2025 has had its plot twists, changes in market direction are hardly unusual. Consider thatstocks came into summer 2024 on a tear, beforesentiment turned. A series of releases—jobs, inflation, and earnings—compounded fears of a narrow and pricey market. Somehow, both an unexpected interest rate hike by the Bank of Japan and an expected rate cut by the Fed triggered selloffs. But markets recovered. Election results in November sparked a powerful rally. So, w here we go from here is anyone's guess. But I'll cite a story about how dead investors outperform living ones because they don't trade. Buy-and-hold has been a great strategy for long-term investors. Principle 2: Global investing can pay off Some think you don't need to own anything other than US equities. But I'llnote that the Morningstar Global Markets ex-US Index has trounced its US equivalent so far in 2025. What's behind the turnaround? The dollar weakening against many other currencies is part of the story. But markets in many regions—Europe, Latin America, and India—have roared to life this year. To me, global investing is about casting the net as widely as possible. So, just as some argue that US-based multinationals provide American investors with global exposure, you could also argue that they're not fully exposed to the US, from a revenue perspective, with a purely domestic portfolio. Principle 3: Bonds aren't broken The equity market's extreme volatility in 2025 makes bonds look like steady-Eddies. While US stocks were in free fall from late February through early April, the Morningstar US Core Bond Index gained 1.3%. Bonds diversified equities, serving as portfolio ballast. Bonds face a lot of 'headline risk.' There are debt and deficit concerns. And the shadow of 2022's ' worst bond market ever ' lingers. While the risks are undeniable, fixed income is also the victim of fearmongering. Not only have bonds diversified stocks, they're also providing above-inflation income streams. Thanks to the painful interest rate hikes of 2022-23, yields on fixed income are at levels not seen since the mid-2000s. The road ahead We're likely to see more twists before 2025 is out. Short-term asset-price fluctuations are driven by a complex interplay of variables—macro and micro, fundamental and technical. Longer term, valuation can be a useful guide. According to my Morningstar Equity Research colleagues, the US stock market looked a bit pricey coming into the second half of 2025—not in dangerous bubble territory, but 'trading at a slight premium.' The bargains cluster on the value side of the market and in smaller-cap stocks. ____
Epoch Times
24 minutes ago
- Epoch Times
Walmart's Revenue Rises, Profit Growth Falls Short of Expectations
Walmart, a bellwether of consumer confidence, saw its revenue increase as the United States began to roll out a new, wide-ranging tariff program. Nevertheless, profit growth was lower than expected. On Aug. 21, the Bentonville, Arkansas-based retail giant released its second-quarter earnings report. It indicated that the company's total revenues increased by about 4.8 percent, to $177.4 billion, in the three-month period that ended on July 31. Net sales rose by a similar percentage, to $120.9 billion.
