GiveDirectly’s Board has voted to award Segovia a commercial contract to provide the technological platform needed to deliver $40 million this year to poor households in East Africa. GiveDirectly began with the most basic of technologies: one person with a laptop processing a few hundred payments each month. The scale of the operation has grown enormously from there; this year we are on course to double cash commitments from last year, and are operating at a scale similar to that of a typical government program in East Africa. At first we dealt with this growth by creating a host of spreadsheets and scripts to manage the approval and payments processes; not surprisingly this became too chaotic and insecure at larger scales.
Two of our founders then launched Segovia, with the team’s support, to address this problem both for GiveDirectly and the broader sector. We agreed at the time to a pro bono arrangement with Segovia, granting GiveDirectly free use of the platform and based on the expectation that we would be able to use it more or less “out of the box,” with limited support required. With experience, however, it has become clear that – given the complexity of our operational model – using Segovia will require significant effort from their team to configure the platform and provide support, at least for the foreseeable future. Given this, we have transitioned to a paid model. Consistent with the shared legacy of the two organizations, GiveDirectly receives and will continue to receive preferential pricing in perpetuity.
GiveDirectly also retains an equity stake in Segovia with an overlap across the two organizations’ Boards. Consequently, only GiveDirectly’s independent Directors voted on this decision, based on a recommendation prepared by independent members of the management team. This process is consistent with our conflict of interest policy and with general good practice in handling such decisions. We reviewed the process with our external counsel prior to conducting it.
Our current agreement runs through February 2017, after which we will have the opportunity to revisit the decision. We’ll continue to report openly and transparently on our arrangements with Segovia, as with everything we do.