Giving Compass' Take:

• Rachel Waddell shares how and why GiveDirectly supplied emergency cash infusions to individuals in response to the COVID-19 pandemic, highlighting effort is in Uganda and Kenya. 

• Do distal cash infusions like those described here achieve your philanthropic goals? Are you ready to support individuals and communities by supporting direct cash infusions? 

• Consider support GiveDirectly's COVID-19 Emergency Fund.

As we know, coronavirus has affected nearly every community around the globe. Perhaps, [more now than any other] time in history, we're all in this together. However, we also know that COVID-19 is disproportionately impacting the poorest and the most vulnerable, both in terms of direct health impacts and secondary economic impacts.

It will hit Sub-Saharan Africa especially hard. The World Bank has estimated that the pandemic will plunge the region into its first recession in 25 years. Across the countries in which GiveDirectly works, the poorest are already feeling the impact from government restrictions on movement and commerce. In Kenya, the first country in which we launched a COVID cash response, recipients whom we've spoken to have reported sobering statistics. Ninety-four percent of those interviewed have seen a reduction in income, 68% have reported that they have no choice but to go to work for income [despite the risk of getting sick], and 92% have needed to reduce how much they eat.

These statistics are echoed across the countries in which we're working. It's clear that the situation calls for immediate action at a vast scale. Without rapid support, households will inevitably be forced to engage in negative coping strategies like taking on debt and selling assets for survival, and the impacts of this will last far beyond the COVID response measures themselves.

To address this emergency, the Center for Global Development (among others) has called for the rapid scaling up of cash transfers. Governments across the world are following suit. Social support programs are now being put in place or expanded across approximately 106 countries, with cash transfers representing 65% of these social assistance schemes.

Why is cash emerging as such a critical response? We all know the fundamentals by now. Cash interventions are backed by a rigorous evidence base that shows fairly consistent positive outcomes across nutrition, education, consumption, assets, income, and other indicators of well-being.

Also, some of the evidence most pertinent to COVID is that cash supports markets. It allows individuals to make choices that address their priority needs. It avoids creating market distortions, such as the challenges posed by an incoming distribution or oversupply of particular goods, which further erodes the incomes of local vendors and producers. And critically, it supports local economies. For example, a recent study done on one of GiveDirectly's programs in Kenya shows that for every dollar of cash delivered, there has been a local economic multiplier of 2.6.

Additionally, there are the particular advantages of digital cash. As we have seen across GiveDirectly's programs, digital cash is efficient. It also allows us to rapidly, securely, and remotely — which in this context is more critical than ever — deliver cash to some of those most in need.

Read the full article about giving cash in response to COVID-19 by Rachel Waddell at Effective Altruism.