To fight poverty in Africa, a new-old solution: cash handouts

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.

Development work is evolving beyond short-term mission trips and one-off donations into a more comprehensive, in-depth model that addresses long-term sustainability of a solution paired with empowerment of those being served. MicroConsignment is a unique branch of micro-enterprise being implemented by non-profit SolCom in Guatemala that provides individuals in rural villages the skills and resources needed to start sustainable businesses.

This is a column on an important new development program in use in at least 40 developing countries: give the poor cash payments, contingent on their use of health clinics and their children’s school attendance, to help break the cycle of poverty.

Microfinance was widely lauded for decades as a surefire and promising way to break the cycle of poverty and uplift the economies of the developing world, especially when targeted for women. But hard data has shown that, on its own, micro-loans don't serve to create sustainable change without a comprehensive approach, and that there are many other factors - such as education and healthcare - to consider when leveraging these tools.

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."

In many rural villages in Northern India and Nepal, long-standing cultural norms have relegated women to subordinate positions in marriage and minimal educational opportunities, stifling the social, agricultural and economic development of entire communities. But with the NGO World Neighbors' work to increase female literacy and help initiate locally-controlled savings and credit groups, these areas' female residents have become a more empowered component of local development and progressive change.

In Sarasota, Florida, residents invested in change contend that for the poor to move beyond survival mode and break a multi-generational cycle, they need a wraparound strategy, rather than one-off or isolated services. The community is slowly growing programs like the Gulf Coast Community Foundation, which helps to fund and support comprehensive programs that build sustainable change. This article explores solutions being pursued by the county from job training for adults to after school support for students.

Access Ventures, a community development organization founded in a Louisville neighborhood, uses a comprehensive investment approach that encourages funds to be dispersed in all issue areas. Instead of creating one "affordable housing fund" or "homeless services fund," the group interweaves investment strategies, making sure to look at the bigger community picture when laying out an investment plan.

A grantmaking organization known as The Solutions Project seeks to diversify the traditional white male-dominated world of philanthropy by pledging to invest 95% of its resources in renewable energy projects led by people of color, and 80% to organizations led by women. Recognizing that these populations are often the most affected by dirty energy and climate change, The Solutions Project is building on past investment successes, like a project that turned an old school into solar-powered housing for seniors.

A multi-millionaire has poured money into his home suburb of Irlam, buying up empty stores, funding public art projects, and supporting the town center, sports center, health clinic, and train station. Employment is up, but this model of urban renewal raises ethical questions and may not be easily replicable.