The Zurich-based project ‘Social Income’ provides people in Sierra Leone with an unconditional basic income. Could this be the future of poverty alleviation? A conversation with the project's founder about global inequality and the potential of voluntary redistribution of wealth.

Maria-Theres Schuler (Das Lamm Magazine): Sandino Scheidegger, you have calculated the following: If a quarter of all Swiss* people gave up one percent of their income, the entire population of Sierra Leone could be financially supported with a basic income. That sounds surreal.

Sandino Scheidegger: Most people are surprised by this example. We like to use it, because such simple calculations help us understand the dimensions of global inequality, even more so since Sierra Leone and Switzerland have roughly the same number of people.

Social Income is now providing a basic income for 75 people in Sierra Leone. How did you come up with this idea?

One day I received a letter from my employer offering to pay 1.5 percent of my salary into the second pension plan pillar, tax-free. At first I thought it was a good idea. But the longer I thought about it, the more absurd I found it: As someone with a secure salary, I would save a very small amount to live in even more security than I am already guaranteed by the first and second pillar as well as personal savings. In a country like Sierra Leone, on the other hand, I could achieve way more with those 60 Swiss francs per month, and not just in 35 years, but already today.

And why exactly one percent?

One percent is the epitome of inequality: It is commonly associated with the one percent of super-rich people, opposite of the other 99 percent.

What is often lost in the conversations around global poverty though is that most of us belong to the one percent of the world's richest. This is especially true in Switzerland, where the average income of 6,538 francs per month is already well above the global one percent mark of 4,000 francs per month. If we look at the wages of full-time workers, 86 percent of women and more than 95 percent of men in Switzerland are already above this mark.

How does Social Income work?

Social Income combines three approaches: the idea of an unconditional basic income, the method of direct cash transfers for people in poverty, and the premise of a rapidly expanding use of mobile banking in West Africa.

Our process is simple: People around the world donate 1% of their salaries to Social Income’s Swiss account. From there, the money is transferred to an account in Sierra Leone and from there it goes directly to recipients’ phones. 100% of the donated amount reaches our recipients. Administrative, transaction and foreign currency costs are covered by philanthropic funds and grants from foundations.

What is the goal?

Our long-term goal for Switzerland is that one percent of the population donates one percent of their income to Social Income. That's 80,000 Swiss* who could provide an amount of about five million Swiss francs per month. This would enable us to finance a basic income for more than 160,000 people in Sierra Leone.

Seeing as 500’000 people have voiced support of the idea of a basic income in the 2016 national vote, our goal is realistic! The idea does not need to be explained to all these people. Donations can be made from anywhere. There are already people from ten different countries participating in the project.

The approach seems to make more sense than most of the more traditional development aid projects - it is simple and cheap.

What makes sense is what works. Scientific studies have shown that the direct transfer of money is the most efficient means to fight poverty. Further, it is not just those who receive direct financial aid who benefit, but a much wider circle of people, because the money is (re)invested locally.

There is also a long-term effect: research shows that those who have received money over a longer period of time earn more on average later in life,after the money transfers have been suspended. This long-term effect is crucial and must be taken into account. Social Income guarantees the monthly installments for three years.

If this is so effective, why don't more NGOs use direct cash transfers?

Not all situations can be solved with cash. If a local market or the necessary infrastructure is lacking, other forms of aid may make more sense. And, of course, it is administratively much more time-consuming and expensive to build a school, for example, than to send money to cell phones.

Fortunately though, almost 20 percent of the global humanitarian budget is already implemented by means of cash projects. And the trend is upward. Switzerland in particular is playing a pioneering role. The Swiss Agency for Development and Cooperation (SDC) has been using cash transfers in humanitarian aid since 1998, for example after the earthquakes in Albania or the floods in Nicaragua.

Wouldn't Switzerland do better to use cash transfers in poverty reduction as well?

Switzerland uses cash programs primarily in humanitarian aid and hardly ever in development cooperation. But the distinction between these areas is no longer as sharp as it used to be. We already know which people will be most affected by future disasters, such as droughts or rising sea levels. People who are receiving money now will be in a better position to respond to such disasters. Improving resilience is increasingly becoming a focus in development cooperation, and cash transfers are an extremely effective means of building resilience.

Despite this, there does not seem to be much acceptance of cash transfers in development cooperation yet. We have seen that often the so-called ‘help for self-help’ is preferred and direct payments are equated with dependency.

Many people seem to think that if people in a program regularly receive money, they become dependent. But in fact the opposite is true: they can do what they deem best with the money and we strongly believe that they really do know best how to get out of their, oftentimes very difficult, situations. In this sense, cash transfers enable people to help themselves to escape the poverty trap and give them a chance to secure better livelihood.

How do you avoid ‘white saviorism’, i.e. the critical depiction of white people who act like they are rescuing the world with e.g. money they distribute?

The idea of our project is to create or free up “space” for people to make decisions about how they want to spend their money, instead of saying “we know what you need”. So I think we are less prone to depicting ourselves as liberators of any kind, compared to other projects.

We also deliberately went against e.g. the sponsorship model where you would know the person you’re supporting. This decision already eliminates certain expectations, especially around gratitude. Moreover, there are people from emerging countries as well as the Global South who donate one percent of their income to Social Income. The project is thus not an initiative of white to non-white benevolence, but of global solidarity.

Last but not least, one percent is actually a ridiculously small amount. No one needs to feel like a saviour because of donating that one percent.

But with an income of 4,000 francs, one percent, i.e. 40 francs, can already be a high monthly burden.

Certainly, there are circumstances in Switzerland where a donation of one percent of the monthly salary is noticeable. I was surprised to see that many people who have a comparably low income and are sometimes still pursuing education are taking part. I think this has to do with a growing awareness that the vast majority of people in Switzerland, even those with a low income, have systematically better opportunities to live a good life than people elsewhere in the world.

When selecting recipients, you apply the criterion that they must come from low-income communities. That contradicts the basic idea of an unconditional basic income.

That's right. Social Income is unconditional in the sense that people can spend the money without conditions. But the selection must be made according to some criteria and these must be comprehensible and transparent.

Development cooperation is mainly a governmental or supranational task, so it is financed by tax money. What is the significance of the project in this respect?

We are saying that the fight against poverty is not the responsibility of state institutions or international organizations alone, but of all of us. Global poverty is not a fate, but a man-made problem, and we all participate in it, at least to a small extent. It is not too much to ask for a small contribution of just one percent.

In contrast to state and supranational development cooperation, we can act much more freely. The more traditional development cooperation is of great importance, but this type of aid is very complex and guided by different interests and diplomatic aspects. It is no coincidence that Switzerland has its embassy not in Freetown in Sierra Leone, but in Abidjan in neighbouring Ivory Coast. The latter has large cocoa deposits and Switzerland does a lot of trade there.

Universal Basic Income (UBI) is also being discussed at the supranational level. The International Labour Organization (ILO), for example, has calculated that 0.7 percent of global gross domestic product - that would be three percent of the amount announced by G20 governments in 2009 to rescue the financial sector - could pay for a UBI more than 30 times over for all the people in low-income countries.

There are already more concrete ideas in humanitarian aid, for example that the World Food Programme (WFP) should work much more extensively with cash transfers in the future. But in the end, far too little is happening. Even apart from the financing of a basic income, there are still many practical hurdles, especially in countries that do not have functioning social infrastructure. It will be a long time before anything really happens. Until then, we should not shy away from our individual responsibility to contribute to a fairer world.

You are relying on voluntarism here. Do you believe that the "voluntary redistribution of wealth," as you write, can be achieved?

If such projects grow, they can generate attention and political pressure. And I believe that economic actors who value social justice will join our project, for example companies that pay one percent of their employees' wages to Social Income. We hope that this becomes best practice.

And it may go well beyond a financial contribution. As a digital initiative, we are always dependent on developers who help us transfer new ideas into the digital realm. We already have web and app developers who work at Google and Apple during the day and code new features for Social Income in the evening. We would like to expand this collaboration further.

Wouldn’t it be problematic if companies give themselves a social veneer in this way, while none of the basic political conditions that are constantly reinforcing global inequalities are changing?

I don't see an either-or here. Such developments can and should happen simultaneously. Many companies are aware of their social responsibility and get involved in a wide variety of ways. Of course, such commitments are usually combined with corporate values and communicated accordingly. But this also helps potential customers and employees to find their way around. They are also the ones who have to expect and put pressure on companies to stand up for better basic conditions so that words are followed by deeds.

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This interview was originally published in Das Lamm and conducted by Maria-Theres Schuler.