Poverty solutions that actually work

For years, policymakers have debated different approaches to helping the poor , but new data offers resounding evidence for a strategy that works: an approach known as a “Graduation” program. This method offers participants a “productive asset” to generate income with training on how to use it, as well as the resources (such as healthcare, food, loans, and coaching) to maintain the asset while building a pathway out of poverty.

BRAC, the largest NGO in the world and one of the leaders in microfinance as an approach to combating poverty, discovered that despite its successes, microcredit did not always reach what are called the Ultra-Poor in effective, sustainable ways. So they formed partnerships and launched a new, comprehensive initiative that involves consumption support, technical and financial literacy training, and asset management to create a pathway to prosperity called the "graduation approach."

Bangladesh has made huge strides in reducing poverty by investing in women experiencing the most economic hardships. As a result, children have lower rates of malnutrition, fewer child marriages, higher rates of completing elementary school, and women have more job opportunities. Over the course of 15 years, 25 million Bangladeshis have been able to break out of poverty. Progress in Bangladesh is a model of success that could be possible in America with Biden's American Rescue Plan which has provisions that would mitigate childhood poverty in America.

The approach of giving cash straight to poor people - rather than funneling goods or services indirectly through the slow, diluted, and complex systems of charities or governments - is nothing new, but evidence of long-term success and sustainability are few. That's why many NGOs and governments are now coupling cash transfers with more comprehensive programs such as job training and financial counseling, as well as addressing some of the root causes that keep people poor, like lack of infrastructure and market access.

A comprehensive initiative to reduce stunting in children caused by malnutrition and poverty is seeing positive results in Rwanda. The government has provided food, frequent health assessments, and has also encouraged families to plant vegetable gardens.

Families experiencing poverty have been given $1,000 each month in an effort to address the racial wealth gap through the Magnolia Mother's Trust program. The cash payments yield an increase of recipients who were able to earn their GEDs, cook fresh meals for their families, and meet all their basic needs. The payments began prior to the onset of the pandemic but have proven to be a crucial safety net.

In villages in Bubisa, Kenya, women have come together to form informal community banks so that they may have greater financial access and power. These groups of women together save money, and then lend and borrow money with one another, giving themselves the chance to own property and send their kids to school – without having to rely on their husbands.

Direct cash transfers to poor people in developing countries is a newer way to spend foreign aid dollars. GiveDirectly is the prominent charity who pioneered this method of giving cash as a form of aid, with the rationale that poor people are better equipped to decide where a dollar should go than an outside organization. A study sponsored by the United States Agency for International Development aims to compare the effectiveness of cash transfers and traditional nonprofit programs. The results may shape the future of aid in America and around the globe.

A data-driven approach to foreign development/aid, one that centers randomized controlled trials and other markers of rigorous study, is gaining steam as a way to push forward programming and solutions that actually work. There are critiques that the method is expensive and doesn't scale easily, but many are excited by the potential for a new era of accountability and impact.

Ultra high net worth individuals are giving money to philanthropic causes in new ways. The international development community can engage these potential donors by approaching them as partners, using data to demonstrate impact, and drawing on the donors’ personal experiences.