Alumni profile: Paul Niehaus, A.B. '04, Ph.D. '09

There are all kinds of ways one might try to reduce poverty rates in the world. Government programs and job training could help, provided the jobs exist and enough people are able to to fill the positions. Livestock could be a source of both income and food security, as long as land and water resources are sufficient for ranching.

As he was studying applied math and economics at the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS), Paul Niehaus began to see data that all these traditional anti-poverty strategies faced challenges. He compared all of them to the old saying, ‘Teach a man to fish, and he’ll eat for a lifetime.’

“Implicit in the ‘teach a man to fish’ mentality is the idea that people need to be taught, and we need to teach them,” said Niehaus, A.B. '04, Ph.D. '09. “But the data says our track record of teaching people to fish, our ability to help people get better jobs, isn’t great.”

As he transitioned to his Ph.D. in economics, Niehaus and some of his friends at Harvard and MIT came up with a novel idea: why not just give money directly to people in these countries, and let them decide how best to use it? That eventually led to GiveDirectly, a non-governmental organization that takes donations and gives registered people access to those funds through a simple mobile money application. Since its founding in 2012, GiveDirectly has delivered more than $870 million in donations to approximately 1.6 million people across the U.S., Africa and parts of Asia. It’s the largest organization of its kind, has been consistently ranked among the most impactful anti-poverty nonprofits in the world, and has led to multiple research studies promoting the effectiveness of direct cash transfer as an anti-poverty method.

“I’ve been blessed and spoiled to have the freedom to work on one problem from such a wide range of angles of attack,” said Niehaus. “I’m incredibly grateful for the opportunities I’ve had to do that.”

Growing up in Massachusetts, Niehaus knew he wanted to go to school at either MIT or Harvard. The opportunity to cross-register for courses meant he could ultimately take courses at both places, but when he started leaning towards economics as a major, he picked Harvard. He ended up never cross-registering, splitting his coursework between his dual concentrations.

“I had this belief that one should go as far with math as one could,” he said. “My mom’s a mathematician and probably instilled a little bit of that in me. My general approach to undergrad was that I was going to do something that was quantitative and would help me make the world better. Applied math is such a powerful tool, so I learned as much of it as I could. It opens a lot of doors.”

Studying applied math added a technical background to augment his economics courses as he transitioned directly from undergrad to the Ph.D. program through the Harvard Kenneth C. Griffin Graduate School of Arts and Sciences. While there, he met his eventual co-founders for GiveDirectly, Michael Faye, Jeremy Shapiro, and Rohit Wanchoo. Meanwhile, a conversation with his Ph.D. advisor, Sendhil Mullainathan (then-FAS), eventually led to a meeting with an entrepreneur also interested in anti-poverty measures.

“He was trying to provide banking services in remote rural areas,” Niehaus said. “His model was that he’d put a little mobile ATM on a motorcycle and send it around to villages, and at the end of the day it’d come back and sync up at the branch bank. It hit me that he’d created bank accounts for some of the poorest people on the planet. When you interact with these people, you realize being able to put money into an account for them is a tremendous opportunity. We were also starting to test developmental economic practices at that time, and we finally had data that the approach of just giving money to these people living in extreme poverty seemed to work a lot better than I’d been led to believe.”

As GiveDirectly began to grow, Niehaus and his co-founders faced many of the same challenges as any other start-up. Trying to break into the anti-poverty charity space proved especially difficult, as he said some of the larger established organizations resisted GiveDirectly’s approach.

“The biggest challenges have always been convincing people,” he said. “To actually make that available to donors is kind of disruptive, because if you’re a big international NGO, your business model is capital allocation. Ours is to let the actual people living in extreme poverty decide how the capital gets allocated.”

GiveDirectly eventually spun off two other companies: Segovia Technology, a bulk transfer software platform that made it easier to distribute funds, and Taptap Send, an app that allowed migrants to more easily transfer money home while working abroad.

As more and more funds got distributed over the years, data from a series of experimental evaluations illustrated the complex financial needs of people in impoverished communities. Stories posted on the GiveDirectly website reflect that complexity: one person used funds to install a clean water pump; another invested in new crops; a third purchased a freezer to store extra fish; another enrolled in a masonry training program.

“People are very diverse, and there’s a lot of variety in terms of what happens,” Niehaus said. “There’s no one story that’s going to capture the impact, but that’s part of the point. The financial lives of people in these communities are much more interesting and complicated and challenging than you might think.”

Even as he’s continued to build GiveDirectly as a director and co-founder, Niehaus has also remained connected to academia and research. He became an Assistant Professor Economics at the University of California-San Diego in 2009, and was advanced to Chancellor’s Associate Endowed Chair in Economics in 2022. His research focuses on long-term strategies to reduce poverty and improve anti-poverty organizations.

“To figure out how much money it would take to do that, we’re going to need new data science and algorithms,” he said. “So let’s get a team together of economists and data scientists to answer that question. That ability as an academic to go from a concrete problem that I’d like to see us make progress on as a species, to putting a team together to do it, to coming up with and communicating an answer, is just incredible.

“To me, it’s all about flows of resources to people living in extreme poverty. I’d like to see us end extreme poverty in my lifetime.”