First, I’m not sure that there aren’t any such nonprofits. Although when I was in Mumbai I never saw significant cash transfers, I heard people talk about a number of societies and trusts that slum dwellers knew they could go to in the event of something catastrophic happening.

Second, it is hard to say why something doesn’t happen, because we don’t normally ask people why they don’t do things. I therefore have really low confidence in my judgements of why nonprofits don’t give out cash. Having made those caveats, I suspect that it has something to do with (a) worries about corruption, and (b) a lack of obvious funding streams for doing so.

(a) I think that there are really genuine concerns about being able to systematically target the people who are really the most needy, and I don’t see an obvious strategy, even for a grassroots organization, for working around the problem. Even when you really trust people, asking them to give out money may be too much.

(b) This is more subtle, but I think someone considering starting such a program would have a hard time knowing where to look for funding. I can’t see many foundations being willing to fund such a start-up, and asking HNWIs for money to literally give away may also be a tough sell. I think that this may be even more the case in India, where norms about family and communal safety nets may be stronger than they are here in the U.S.

Barry and Alexander, both of you seem to advocate one form or another of giving out cash (Barry advocates asking local nonprofits whom to give to; Alexander advocates giving to people who are clearly in need and clearly far from where tourists normally go. My question for both of you (coming from the concerns I listed under option 2) would be why you think that there are no nonprofits engaging directly in the kind of activity you advocate.

Alexander, further responses:

• You ask “Why would you give to local Mumbai nonprofits over the ones GiveWell recommends?” My answer is that I may have access to a kind of “data” here that individual donors can’t access, and that I can’t share with them without asking them to “trust” me. The “data” basically consists of getting recommendations from people who strike me as credible, and/or making sure I give to populations that I perceive as genuinely in need. In the end I am not sure that this “data” enables me to get more impact than I can with a gift to GiveWell’s top-rated charities (my gut instinct at this point is that it doesn’t).
• Good point that “Slums are not, in general, the worst places to live in Mumbai.” I’ll be writing more about this.

Chuck and Robert: I don’t agree that the existence of people who would benefit greatly from some extra cash implies, by itself, that there is something wrong with the laws. Further, even if there is room for improvement in the laws, that doesn’t mean that I can do more good with advocacy than with direct aid. Personally I am more comfortable with direct aid.

Michael: I think that to a large extent, the fundamentals are improving in India without any help from donors, as the result of very large numbers of small actions by individuals. I don’t see “directly addressing the root causes” as something that is likely to be in my power at all. Rather, my goal is to improve individual lives and empower individual people; doing so may speed along these small actions that add up to big change, and if not, it’s still valuable in itself. More at our discussion of the “root causes of poverty.”

Alice, I am not sure I see the merit in a recurring donation. A one-time donation could be converted into a recurring source of income by the nonprofit itself, if they prefer it that way; for my part I’d give cash because it seems both most convenient for me (the way I manage my finances) and for the nonprofit (because it can most easily be converted into anything else, including a recurring revenue stream). The question of “room for more funding” seems relevant to me regardless of the form the donation takes.

Ian, you’re right to point out that any action may be subject to many unintended consequences. To me this is not a reason not to take action, but it may be a reason to prefer working through established groups that have had the time and experience to learn about and manage the unexpected consequences of their actions. (Nonprofits that have had the opportunity to do formal evaluation have a further tool for this goal.)

Just some potential bad incentives or unwanted consequences that I can think of off the top of my head, some of which have been noted earlier:
1. People prioritize their activities to do things that appear busy, over things that are more productive (ex: Washing clothes instead of learning to read)
2. People prioritize things that put them when foreigners can see them instead of things that are more productive (ex: washing clothes instead of working in a call center)
3. The random distribution of money creates jealousy, upending friendships and family ties.
4. People stay at home in the slums in the hope of receiving handouts, rather than going to work in a factory.
5. Uneven distribution patterns create internal migration incentives or affect land values.
6. Recipients of donations get mugged for their cash.
7. People do things to make themselves appear more desperate (e.g., cut off a limb) so as to receive donations.

I’m sure there are plenty others besides.

Full disclosure: During my seven weeks in India, and in the course of my international travel generally, I have not given any money to individuals.

As for whether it’s better to give here rather than to a GW top charity, I think it depends on your priorities - the groups you’re considering in Mumbai focus on pallative work, where the disproporationate value of a dollar vs a rupee packs a very, very large wallop for the individuals who are receiving services. However, pallative approaches generally aren’t long-term solutions, and from what you’ve said, they don’t seem to be in a position to do follow up evaluations of efficacy.

In the absence of an overall plan for the welfare of the people, giving some little fishes out of one’s traveller bag helps a bit, but one should mainly share with the needy the concern that we all are on the same boat and in need of new laws for the fishing industry.

Underlying the blog question is a question, that seems absurd at first, “ought money be given where it is useful.” If it is useful doesn’t that mean the country has the goods and services providers to meet the needs of its citizenry, but it doesn’t have the laws to require that those needs be met. There isn’t economic justice in those countries. That defect may to some extent be the reality in my country.