May 25, 2017

by TWC Admin

Regardless of where you land on the political or social spectrum of the poverty issue, I think most people can agree that it continues to be a crisis. Statistics show that there are 700 million people around the world living in extreme poverty. “Technological unemployment” resulting from the speed at which technology is changing the job landscape is of growing concern. The McKinsey Global Institute, a private-sector think tank, estimates that 45% of current jobs could see automation replacing humans in just 20 years.

Worrisome as that may be, there is hope that we can change our way of thinking about the problem and turn the inefficiency of our current model of giving into solutions for positive change.

What philanthropy needs is a disruption.

Dr. Peter Diamandis, an international pioneer in the field of innovation (among other fields), is turning his attention to the efficacy of a Universal Basic Income (UBI) and a shift in philanthropic giving towards peer-to-peer aid.

Diamandis had the opportunity to interview Michael Faye, co-founder of GiveDirectly, for a recent Abundance 360 webinar. UBI advocates such as Faye present some compelling data about how peer-to-peer aid has the potential to be just the right model for combating poverty. Launched in 2012, GiveDirectly is the largest UBI experiment to date. And the data that’s accumulating is very promising. Diamandis had three main takeaways from their conversation:

  1. Philanthropy is ripe for disruption. It’s estimated that only about 15-20% of donations actually get to the intended recipient after navigating the complex and bureaucratic system of delivery. GiveDirectly’s model puts 90 cents of every dollar into the hand of the recipient.
  2. Directly giving cash has counter-intuitive positive byproducts such as a decline in alcohol and tobacco purchases and an increase in hours worked.
  3. Cash transfers lead to better health and social outcomes in areas such as a reduction in HIV infections, psychological distress, low birth-weight, child labor, and domestic violence.

We’re of course simplifying their incredible conversation… Diamandis’ thoughts on the topic are very interesting to consider. We’d encourage you to read the full blog article for all the details.

If you want to follow more of these types of conversations, consider subscribing to Diamandis’ tech blog and Abundance Insider. To learn more about this leader in the fields of innovation, incentive competitions, and commercial space, pick up one of his books or visit his website.

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