What if we just gave them money?

Cash payments as a baseline measure for program performance

Posted by Debbie Koh

What if every nonprofit that focused on poverty alleviation had to prove they could do more for the poor with a dollar than the poor could do for themselves? – from “Want to Help People? Just Give Them Money”

The idea of giving people money (or cash transfers) isn’t new. I gave some examples of cash transfer programs in Mexico and India in my last blog post. But what I found thought provoking about this quote, from a Harvard Business Review blog I read last week, was the idea of using cash transfers as a baseline measure for program performance.

Is the money spent on the programs we hope will help people more effective than giving that same amount of money directly to them? How do we know that providing a health intervention is more useful than providing a cash payment to someone instead?

The short answer is, we don’t know.

It’s easy to think of examples that could tip the scales either way. A large-scale vaccination program that involves provider training, medical supplies, and community education confers important health benefits to beneficiaries and contributes to a public good when a large population is immunized.

On the other hand, the entire cost of implementing and administering program (i.e. including direct and indirect costs) utilized as a direct cash payment could potentially provide greater benefits to the recipients. The payment might allow a parent to pay their child’s school fees, for example. This more educated child might experience long-term benefits (higher income, better health outcomes, for example) that exceed what they would’ve received via the health program.

Of course, a cash transfer system would still end up needing staff, monitoring, evaluation and other administration costs that would cut into the total payment amount. But, I think this idea is still useful as a thought experiment, and challenges students and practitioners to think critically about how effective we are in our hoped for or current public service careers with the resources that we have.

Debbie graduated from Wagner in 2010 with her MPA in Health Policy and Management, International Health. She returned to her native California in 2011 and currently works for Venture Strategies Innovations. Follow her on Twitter at @thedebkoh or connect via LinkedIn. All views expressed are her own.