At first glance, it may seem counterintuitive, but research consistently shows that giving people cash is far more transformative than providing services. And when you think about it, that makes perfect sense. How can those who are wealthy truly understand the daily challenges faced by people living in poverty?

Well-intentioned donors may assume that better schools, more supplies, or job-training programs are obviously helpful. But the reality is that much of the funding for these services never reaches the communities it’s meant to support—it flows instead to the business owners and organizations providing the services. Meanwhile, when people in poverty receive cash, they spend it locally, supporting neighborhood businesses and strengthening their own communities.

It’s similar to giving tax breaks to the wealthy: the money doesn’t make its way back to Main Street. Affluent individuals aren’t spending at local diners—they’re booking tables at Michelin-star restaurants. They’re not shopping at local stores—they’re buying luxury goods from high-end retailers.

Money circulates in the communities that already have it. Trickle-down economics doesn’t work at the national level, and trickle-down philanthropy doesn’t work either.