Global Poverty Fund Methodology

Significant gaps in addressing multidimensional poverty, include not only income poverty but also access to education, healthcare, and social services. We assess organization that aim to prioritize interventions that demonstrate a strong evidence base and cost-effectiveness in reducing global poverty

Global poverty remains one of the most pressing challenges of our time, with millions of people living in conditions that inhibit access to basic needs such as food, clean water, shelter, education, and healthcare. This review examines the state of global poverty today, assesses the most effective interventions for alleviating poverty, and presents key factors to consider in future programming. We aim to provide a comprehensive evaluation of current data on poverty and offer evidence-based insights into effective poverty alleviation strategies. The goal is to support efforts to target poverty reduction with efficient, scalable interventions, with special attention to the methodologies of Charity Navigator’s Causeway Fund.

Poverty eradication is a central pillar of sustainable development, influencing outcomes in health, education, and societal stability. Alleviating poverty not only improves the quality of life for individuals but also strengthens communities and economies. Poverty traps individuals in cycles of deprivation, limiting opportunities and perpetuating inequality (Sulaiman et al., 2016). Tackling global poverty is a moral and practical imperative that requires international collaboration, innovative solutions, and a sustained focus on long-term impacts (Zaneva et al., 2022).

Despite significant progress, poverty remains widespread, particularly in sub-Saharan Africa and parts of South Asia. According to the World Bank, nearly 700 million people live on less than $1.90 per day, classified as extreme poverty (Sulaiman et al., 2016). Geographic disparities are evident, with sub-Saharan Africa having the highest concentration of impoverished populations, where 43% live below the poverty line, and South Asia at 19% (Sulaiman et al., 2016).

Key issues include:

Food insecurity: Many regions struggle to provide adequate food, leading to malnutrition and stunted growth among children (Sulaiman et al., 2016).
Access to basic services: Many poor households lack access to clean water, sanitation, and healthcare (Zaneva et al., 2022).
Educational inequality: Poverty restricts access to education, perpetuating generational cycles of disadvantage (Zaneva et al., 2022).
Mental health: Research shows that poverty exacerbates mental health issues, particularly among children and adolescents, contributing to long-term societal burdens (Zaneva et al., 2022).

There are significant gaps in addressing multidimensional poverty, which includes not only income poverty but also access to education, healthcare, and social services. The COVID-19 pandemic has further worsened poverty levels, undoing years of progress and pushing millions back into extreme poverty (Zaneva et al., 2022).

Several poverty alleviation programs have shown effectiveness across different regions:

Cash Transfer Programs: Both unconditional and conditional cash transfers have proven effective in improving income and consumption levels, particularly in low- and middle-income countries. Unconditional cash transfers (UCTs) provide direct monetary support, while conditional cash transfers (CCTs) require recipients to meet specific criteria such as school attendance or healthcare visits (Sulaiman et al., 2016; Zaneva et al., 2022).
Graduation Programs: These multifaceted programs, which combine cash transfers with training and asset provision, show promise in helping the extreme poor transition to self-sufficiency. Studies from countries such as Bangladesh and Ethiopia have demonstrated sustained improvements in income, assets, and food security following participation in graduation programs (Sulaiman et al., 2016).
Livelihood Development Initiatives: Programs that promote agricultural productivity, small business development, and access to markets have generated positive outcomes, especially when paired with financial services such as savings accounts (Sulaiman et al., 2016).

Causeway Fund Methodology and Selection Criteria

Charity Navigator’s Causeway Fund aims to prioritize interventions that demonstrate a strong evidence base and cost-effectiveness in reducing global poverty. The fund will focus on programs that meet the following criteria:

Proven Effectiveness: Priority will be given to programs with clear evidence of long-term impact on poverty reduction. This includes successful graduation programs and cash transfer initiatives that have been evaluated through randomized control trials (RCTs) (Sulaiman et al., 2016).
Scalability and Sustainability: Interventions must be scalable and sustainable, with the potential for long-term poverty alleviation beyond the initial period of assistance (Zaneva et al., 2022).
Focus on the Extreme Poor: Programs that target the extreme poor, particularly in regions with the highest levels of poverty, will be prioritized. This includes sub-Saharan Africa and South Asia, where poverty remains most entrenched (Sulaiman et al., 2016).
Cost-Effectiveness: The Causeway Fund will allocate resources based on benefit-cost ratios, ensuring that investments yield significant improvements in poverty reduction per dollar spent (Sulaiman et al., 2016).

The percent of the fund allocated to the nonprofit will be based on the following factors:

Reach: The number of people potentially reached by the interventions based on the nonprofits annual reports or geographic scope.
Effectiveness of the intervention: Organizations addressing global poverty issues with proven interventions analyzed above will be provided a greater allocation. When the evidence isn’t clear, the allocations will be equally distributed. In the case of our Global Poverty Fund, the allocation of the fund will prioritize interventions based on their effectiveness. Graduation programs will receive the largest portion due to their comprehensive and long-term impact, combining cash transfers, training, and asset provision to help beneficiaries achieve sustained poverty alleviation (Sulaiman, Goldberg, Karlan, & de Montesquiou, 2016). Livelihood development initiatives will be the second focus, as they provide sustainable income growth and food security, particularly in agricultural settings (Sulaiman et al., 2016). Cash transfer programs will be allocated a smaller portion, given their strong short-term impact but more limited long-term benefits (Sulaiman et al., 2016).

Caveat: Often, a nonprofit’s annual reporting or descriptions of interventions are not precise enough to make clear distinctions. When that is the case, we will default to an equal allocation of resources.

References

Sulaiman, M., Goldberg, N., Karlan, D., & de Montesquiou, A. (2016). “Eliminating Extreme Poverty: Comparing the Cost-Effectiveness of Livelihood, Cash Transfer, and Graduation Approaches.” CGAP.
Zaneva, M., Guzman-Holst, C., Reeves, A., & Bowes, L. (2022). "The Impact of Monetary Poverty Alleviation Programs on Children's and Adolescents' Mental Health: A Systematic Review and Meta-Analysis." Journal of Adolescent Health.
World Bank. (2021). "Poverty and Shared Prosperity Report."