Measure Poverty, Do Better: How objective, household poverty data can drive better strategies for development practitioners

This blog was written by Julie Peachey.

Hundreds of nonprofit organizations, busineses, and investors around the world are concerned with reducing global poverty. Every day, the leaders that run these programs must make decisions that influence their program’s strategy, outcomes, and impact. To make the best decisions possible, these leaders need the right information. One key piece of information: beneficiary poverty data.

Objectively measuring poverty among beneficiary households can help development practitioners balance financial and social goals, design products and services that are best suited to the needs of the poor, and evaluate their program’s success. This information opens the door to a whole new array of insights, especially when combined with other important indicators such as gender, location, occupation, education, and so on.

Grameen Foundation’s Progress out of Poverty Index^® (PPI^®) is a simple poverty measurement scorecard that is rising in popularity among development practitioners, social businesses, and other entities that work with the poor. It was designed to be easier to use than other poverty assessment methods, but just as helpful:

• „The PPI contains only ten questions, and the survey can usually be administered in less than five minutes.
• „The questions are about the household’s assets and basic characteristics, so they are straight-forward and easy to verify.
• „The PPI survey can be included with existing paperwork or embedded in a larger survey.
• „The PPI measures poverty relative to widely-recognized poverty lines.
• „The PPI is available in more than 50 countries; nine of every ten people living on less than $1.25 a day live in a country with a PPI scorecard.

Since the PPI was developed in 2005, hundreds of organizations have used the tool in their programs. This year, Grameen Foundation published a report on how the PPI is being used around the world today. It is clear that poverty measurement is a useful pursuit for many types of organizations.

A recent example from the report is Samasource, a social enterprise that links women and youth in poverty to jobs in the digital economy. After securing data and content service contracts from huge global brands like Microsoft, Getty Images, and LinkedIn, the organization breaks down this computer-based work into tasks that underserved and vulnerable people are trained to complete. Samasource was founded in 2008; since then, the organization has given life-changing work to over 5,000 people in poverty from Kenya, Uganda, India, Ghana, and Haiti.

Samasource began using the PPI in 2012. The organization surveys all workers at the time they are hired and again at multiple points during their tenure with the organization. In these surveys, Samasource combines the PPI indicators, which provide an objective poverty assessment, with other indicators such as prior income, prior work stability, formal experience, exposure to computer-based work, number of income dependents, and savings habits.

This effort results in rich data on all of Samasource’s workers that indicates whether the organization is both reaching and deeply impacting its target demographic – women and youth without formal employment experience who live below the poverty line. Samasource can also track worker poverty and other indicators over time, which is an important part of assessing its impact. As Samasource grows, it has the information it needs to validate a working strategy or recalibrate its strategy when needed. By committing to evidence-based decision-making, Samasource continues to further its mission to reduce worldwide poverty.

Samasource is just one example. A growing number of poverty alleviation programs that are using real data to drive their strategy. Grameen Foundation is committed to supporting those organizations in learning how to use the PPI and make the most out of their data. The PPI website, www.progressoutofpoverty.org, hosts downloadable guides, case studies, and reports; all PPI resources, including the PPI scorecards, are a free and public good.

For more information about Grameen Foundation, visit www.grameenfoundation.org.

Mark Schreiner, of Microfinance Risk Management, L.L.C., is the developer of the PPI. Lindsey Longendyke contributed to this blog post.