Canva has known for a long time that uplifting people permanently from extreme poverty was a goal it wanted to contribute towards tackling, but didn’t know the best way to help that could be both effective and scalable.

After a lot of research, conversations with experts, and, most importantly, conversations with those in extreme poverty, Canva became convinced that one of the most effective ways to contribute is to give money directly to people living in extreme poverty. Canva believed that this could have a very positive immediate impact on individuals and can also compound to have a long-term positive uplift for communities.

This led Canva to the incredible team at GiveDirectly, who have been pioneering this space since 2008, and in 2021 they set to work on the first phase of the partnership, which saw Canva donate $10 million providing cash transfers to 12,800 people living in extreme poverty in villages across rural Malawi.

Canva has announced the next step in its goal to help end extreme poverty, with the launch of its second phase backed by a further $20 million cash transfer program for people living in extreme poverty in Malawi.

Canva had many questions throughout its journey so far and benefited from the perspectives of Esnatt, who grew up in Malawi and runs GiveDirectly operations on the ground there; as well as those who have conducted extensive research in the field: Michael, a PhD in development economics, who worked at the United Nations and then founded and built GiveDirectly; and Rory, GiveDirectly President who previously ran the UK’s Department for International Development.

Canva wanted to give the same opportunity to ask questions to our team, so here are their questions and our responses!

1. What is extreme poverty?

Michael: Extreme poverty is a severe deprivation of basic needs like food, water, sanitation, health, shelter, education, and information. According to the World Bank, it’s living on less than $2.15 a day, adjusted for purchasing power parity – meaning each day someone in extreme poverty consumes less than what $2.15 would buy you in the United States. Currently, 659 million people live in extreme poverty:

Esnatt: Many of GiveDirectly recipients earn less than $1 per day from manual agricultural labour on small plots. This leads to malnourished children, limited access to education, and insufficient healthcare funds for the sick and elderly. It’s typical for entire families to live in single-roomed, clay-brick homes with straw roofs and dirt floors.

2. Why did you choose Malawi?

Danny: Two reasons. Firstly, GiveDirectly has been working in Malawi since 2019 and has built support with the national government, which is critical to delivering programs at scale. Secondly, far too many people live in extreme poverty here. 71% of people live below the extreme poverty line of $2.15 a day in Malawi, and contrary to global trends, the extreme poverty rate in Malawi has increased since 1997.

3. How much money does each recipient receive?

Michael: We’ll be giving $550 to each adult. The question of how much to give is a difficult one: the higher the amount, the fewer people we can reach with a fixed budget. Our goal was to give enough to allow a large fraction of people to lift themselves over the poverty line while reaching the most people. Given the evidence we have from other projects on how transformative a $1,000 lump sum per household (~$500 / adult) could be, we decided to anchor to that.

4. What do people spend the money on?

Melanie: Learning about the ways the money has been spent is incredibly humbling and insightful. It’s without a doubt the best money we’ve ever spent. We’ve heard so many touching stories about the diverse ways that people have spent their money:

• At 23, Mike finally finished school after a six-year delay due to his inability to afford the $20 school fees. After receiving money transfers, he paid his fees, graduated, and bought six piglets to fund his dream of studying electrical engineering at university.

• Bertha paid for her daughter’s surgery, so she could walk. "My child was born with bowed legs. I realised that this wasn't normal rickets. She could not walk. I then wanted to take my child to the hospital for surgery, but I didn't have any money. Thanks to GiveDirectly, my child has now been treated, and I have hope that she will soon be able to walk properly."

5. Why did you choose cash over other kinds of aid?

Melanie: We’ve always wanted to be part of the solution rather than the problem. We’ve spent many years learning about different solutions. The more we learned, the more complex the space became. In every village, every person has differing needs.

We wanted to find a solution that would balance our goals of having a long-term impact, empowering the recipients to use the money on what was most needed for them, and having the ability to scale over the years to come. As we learned more about GiveDirectly, their approach really resonated with us and was in support of all of these goals.

Michael: We started GiveDirectly to place choice and capital directly in the hands of those that knew best: the recipients.

My co-founders and I learned that many efforts were less effective than hoped. Cash transfer programs existed, but there was no option to give directly to those in extreme poverty, so we decided to build one in 2008. Giving cash transfers could shift the sector to being immediately more recipient-centric and offered the potential of unparalleled scale with long-lasting effects.

Danny: As we dug into the data and visited these communities, we learned that these transfers don’t just help recipients, but they have an even bigger impact on the local communities. A recent study found that for every $1,000 distributed to a person living in poverty, the local GDP grew by $2,600 – a 2.6x multiplier.