How much good does a charity do? And at what cost? These are questions that many–perhaps most–nonprofits simply can’t answer.
Trickle Up, a small New York-based NGO that helps some of the world’s poorest people lift themselves out of poverty, has answers. In FY2014, Trickle Up delivered a high quality program, known as the “graduation” approach, to 7,195 people living in extreme poverty in rural India, West Africa and Latin America. Its programs, which are operated with local partners, helped those people avoid hunger, increase their income and save money, at an approximate marginal cost of $340 per person.
You don’t have to take Trickle Up’s word for it. Trickle Up was the subject of one of the first “impact audits” performed by ImpactMatters, a startup formed last year by Yale economist Dean Karlan and his former student, Elijah Goldberg, to encourage nonprofits and donors to use evidence to achieve their missions.
To learn more, I recently visited with Bill Abrams, the president of Trickle Up, and spoke by phone with Jo Sanson, its director of monitoring, evaluation and research. [Disclosure: My daughter Sarah Gunther worked at Trickle Up for most of 2007 and 2008 as a program associate for Africa.] I came away impressed.
Maybe the best thing about Trickle Up is that it constantly strives to have more impact, both by delivering its program more efficiently and effectively and, more recently, by figuring how to reach more people. Helping 7,195 people is excellent, but more than 800 million people around the world live on less than $1.25 a day. To scale, Trickle Up has begun to “export” its program to governments and the UN.
Trickle Up spent about $3.4 million in FY2015 and has a staff of just 34 people. It’s revealing that five of them — two in New York, three in the field — are devoted to monitoring, evaluation and research.
“We started to get serious about evidence about 10 years ago,” Abrams told me. “It’s great to have inspiring stories, but donors are looking for evidence.” Before joining Trickle Up as president in 2005, Abrams was, in a sense, in the evidence business. He worked as a reporter and executive at The Wall Street Journal, ABC News and The New York Times for more than 25 years.
Founded in 1979 by Mildred Robbins Leet and Glen Leet (who have since died), Trickle Up gave cash to the poor long before cash transfers were cool. It still gives grants of roughly $125 to $225, and then layers on training in business and life skills, savings groups to offer peer support, very small periodic grants known as “consumption support” and follow-up from coaches.
The “graduation” program, which was largely designed by BRAC, a large Bangladeshi NGO, has been shown to work by a series of randomized controlled trials (RCT) involving more than 10,000 people in Ethiopia, Ghana, Honduras, India, Pakistan and Peru. (Trickle Up itself wasn’t studied, but its program is very similar and it has done research of its own.) In an attention-getting report in Science last spring, the economists who conducted the studies concluded:
Although more can be learned about how to optimize the design and implementation of the program, we establish that a multifaceted approach to increasing income and well-being for the ultra-poor is sustainable and cost-effective.
The “graduation” approach is a high-touch, long-running program so it’s not cheap. Costs can run well over $1,000 and reach nearly $6,000 per family for the three years, the researchers found. But with the exception of Honduras (where disease killed chickens that some people had bought), the programs all delivered benefits greater than their costs, ranging from 133 percent in Ghana to 433 percent in India. This is a big deal–evidence that even the truly destitute can escape what are called poverty traps.
It was also validation for Trickle Up. Says Abrams: “We only do one thing. We’ve only done one thing. That focus and that continuity is a real asset. We have a program that works, and the evidence to prove it.”
Doing good better
Focusing on the “graduation” method allows Jo Sanson and her research team to find ways to refine and improve it. How to select the neediest recipients, for example–their partners map villages, rank households and invite people in the community to talk about who should get the support. “Everybody understands why some people are selected, and some people aren’t,” Sanson told me. Would the program work with fewer follow-up visits? What’s the role of the periodic consumption support? How much is needed, say, to help a household buy enough rice, even in lean seasons. These are the kinds of questions that Sanson strives to answer.
Trickle Up also encourages its participant families and communities to assess their own situations and provide feedback about the programs. It’s engaged in an RCT in Burkina Faso to track the impact of its programs on childrens’ well-being.
“Really the most important thing is having a culture of learning and adaptation,” Sanson says. This is true of all NGOs, of course.
The challenge for Trickle Up is how to reach more people. In FY2015, which ended last August, Trickle Up helped 12,181 people, a nice bump up from the previous year’s figures that were audited by ImpactMatters. Even at that rate, getting to much bigger numbers would take years. “Fundraising is very hard to scale,” Abrams says. “We began to think of our product as our knowledge and our expertise.”
So Trickle Up is now working with Jharkhand and Odisha state branches of the Indian government to incorporate elements of the “graduation” approach into their existing poverty alleviation programs. Trickle Up helps with program design and with the selection and training of field officers, among other things. It also has a contract with the UN High Commissioner for Refugees (UNHCR) to help develop pilot “graduation” programs in refugee camps in Africa and Latin America.
If charity is about doing good, rather than feeling good, Trickle Up should thrive. Going forward, it’ll be interesting to see if the “certification” [PDF] from Impact Matters drives new funding to Trickle Up, particularly from major donors or foundations. Does evidence matter? We’ll soon see.