I agree with and appreciate the core premise, that since many donors give to primarily U.S. charities, as a community we should spend more effort on research to what effective causes are. I also agree that making the transfers more cash based and less beaurocratic is tractable and potentially high impact. However, I would like to note some flaws in this article.
the percent of spending on social programs is pegged at 23% of gdp. I suspect this must include social security and potentially other non discretionary and non need based public spending. 23% is much greater than the $600b figure used throughout the article. So it is misleading to equate these two numbers. Much of social security money does not go towards addressing poverty.
saying cash transfer is 10x as effective because it spends 1% on administration instead of 10% is extremely misleading. Using the amount of money given to people as the metric, it is 0.99/0.9=1.1x as effective, an extremely different number.
I am actually surprised administration fees are only 10%. This indicates to me that these programs are more cost effective than I would have otherwise assumed.
Thanks for reading the piece and for taking the time to leave feedback.
The chart I cited on spending on social protection as a % of GDP was the best available source I could find for this data. If US spending includes programs not specifically targeting poverty alleviation, my assumption is that the other countries listed similarly have non-poverty alleviation programs included, e.g., retirement pensions. If you know of a data source that disputes the point I’m making (the US spends more than the average among wealthy nations on poverty alleviation), I’d welcome it.
I wrote that programs administered through the tax system were 10x more efficient, not effective. Everyone can assess for themselves what feels like an excessive administrative cost to a given program. To me, the 10 to 1 rate is striking. Given the size of these programs, 9% equates to a lot of money, e.g., $5.8B dollars for SSI alone in FY23.
I agree with and appreciate the core premise, that since many donors give to primarily U.S. charities, as a community we should spend more effort on research to what effective causes are. I also agree that making the transfers more cash based and less beaurocratic is tractable and potentially high impact. However, I would like to note some flaws in this article.
the percent of spending on social programs is pegged at 23% of gdp. I suspect this must include social security and potentially other non discretionary and non need based public spending. 23% is much greater than the $600b figure used throughout the article. So it is misleading to equate these two numbers. Much of social security money does not go towards addressing poverty.
saying cash transfer is 10x as effective because it spends 1% on administration instead of 10% is extremely misleading. Using the amount of money given to people as the metric, it is 0.99/0.9=1.1x as effective, an extremely different number.
I am actually surprised administration fees are only 10%. This indicates to me that these programs are more cost effective than I would have otherwise assumed.
Thanks for reading the piece and for taking the time to leave feedback.
The chart I cited on spending on social protection as a % of GDP was the best available source I could find for this data. If US spending includes programs not specifically targeting poverty alleviation, my assumption is that the other countries listed similarly have non-poverty alleviation programs included, e.g., retirement pensions. If you know of a data source that disputes the point I’m making (the US spends more than the average among wealthy nations on poverty alleviation), I’d welcome it.
I wrote that programs administered through the tax system were 10x more efficient, not effective. Everyone can assess for themselves what feels like an excessive administrative cost to a given program. To me, the 10 to 1 rate is striking. Given the size of these programs, 9% equates to a lot of money, e.g., $5.8B dollars for SSI alone in FY23.