Foreign Aid FAQs – #7 “I’d rather give them the money myself”

Widespread concerns about dodgy and unscrupulous overseas aid charities not sending donations where they’re supposed to have led some people to instead express a wish to donate money, clothes, food, etc. to those in need directly, thereby bypassing the charity ‘middle-men’.

These concerns have been fuelled by negative coverage of international development charities in the press, which has claimed that these charities spend a lot of money on wages and so hardly any of the money actually gets to where it’s supposed to. However, these claims are based on a fundamental misunderstanding of what overseas aid charities actually do. In general, these charities do not operate as cash transfer schemes. Read our previous article on this topic to find out about how overseas aid charities actually spend the donations they receive.

Rather than increasing the impact of your donation, giving money directly to those living in poverty overseas can actually achieve less than if you had donated to a charity. If you’re planning on travelling to a developing country with the goal of donating directly to those in need, the costs involved (flights, travel insurance, vaccinations, food, accommodation, security, etc.) will eat up a significant amount of your donation.

But let’s say that you were planning on travelling to a developing country anyway, or that you’re transferring money to someone you know in the country who can then distribute it for you. That will maximise your impact, right? Well, actually this still won’t achieve as much as if you had donated to a charity. Donating directly to a person or family living in poverty will certainly help to alleviate their situation in the short-term, but it will have limited long-term impact.

International development charities conduct research to ensure that donations are spent in areas where they will have maximum impact. Then, rather than giving money to people directly, they invest donations in projects which will have a long-term impact in the community. For example, donating food to someone living in an area suffering from poor harvests will have less of an impact than investing in an irrigation project which allows the local community to be self-sufficient and reduces the chances of poor harvests occurring in the future. Unless you are donating a large enough amount of money to entirely fund such a project, it makes sense to let charities combine individual donations and create a greater and longer-lasting impact than these donations could have achieved alone.

Donating directly, rather than through established charities, can cause many issues. For example, crowdfunding has recently emerged as an alternative way of donating to worthy causes. Organised by well-meaning individuals, crowdfunding appeals are meant to cut out the much-maligned ‘administration’ costs of official charities, meaning that all of the money goes where it is intended. However, there are numerous examples of these appeals encountering unforeseen problems – from struggling to track down the intended recipients, to encountering controversy as to where to spend the money raised in excess of what was required, to being taken to court for an unexpected bill.

Established charities have systems of governance and accountability in place which make sure that donors’ money is spent transparently and effectively. The proportion of donations spent on administration is not wasteful, as often claimed, but ensures that problems like those mentioned above are avoided or effectively resolved.

Non-financial donations

What about donating things other than money? Whenever a natural disaster hits, the first instinct of many kind-hearted people is to donate food, clothing, blankets and other goods to be sent to those affected. However, the costs of sorting, processing and transporting these donations can very often exceed the total value of the donations themselves.

Instead, humanitarian aid charities use monetary donations to buy supplies, wherever possible, in the affected country or region. Not only does this improve value for money, but also helps to support the local economy. Additionally, they do not wait until disaster strikes to buy these supplies, but keep strategically-placed warehouses around the world pre-stocked so that they are ready to respond as soon as an emergency arises.

If you’d like to donate something other than money, you could donate items to a charity shop, or donate your time to volunteer for a charity or run a fundraising event. In doing this, you will generate money which can be quickly and easily sent where it is needed most.

Donating directly to people living in poverty overseas may mean that your entire donation goes to your intended recipient. However, at the end of the day it will also mean that your donation will not have as great an impact as if you had entrusted it to an international development charity. And surely it is the impact which matters?


