Cash versus goods donations

2010-02-09

in Economics, Politics

Over on the RedCrossBlog, Claire Durham has an interesting post on why non-cash donations are unhelpful. It seems important, given the continued willingness of people to send things that are less than useful, expensive to transport, and liable to jam up logistical systems. Providing some guidance to those trying to help the victims of the earthquake in Haiti also makes sense at this time.

As an example of how non-cash donations can be useless or even harmful, Durham highlights how donated pharmaceuticals often end up being worse than useless:

Drugs that are not required, those that have expired or have no expiry date have to be destroyed. Incineration is preferred as this prevents the hazard of land filled medicines contaminating water supplies or drugs being collected and sold on the black market. In Eritrea after the war of independence, seven truckloads of expired aspirin took six months to burn. The real tragedy is the cost of this process. In the Venezuela floods in 2000, seventy percent of donated pharmaceuticals had to be destroyed. To be able to cover this cost, a support line to provide psychological support to the survivors had to be shut down.

None of this is overly surprising. The chaotic and uncoordinated efforts of the general population, being undertaken after a disaster has occurred, is no substitute for the strategic pre-positioning of plans and resources. In addition, longer-term planning allows for greater standardization (easing training difficulties), cost effectiveness, and the matching of goods to local tastes and needs. Providing regular funding to professional organization with the skills to do this well is probably the single best thing ordinary people can do to lessen the human suffering that accompanies disasters.

Report a typo or inaccuracy

{ 8 comments… read them below or add one }

alena February 9, 2010 at 11:29 am

My mother was deeply involved in working with the Eritrean refugees in Sudan and from her experience, money just ended up lining the pockets of government people. Aid organizations were able to reach the people directly and give them food and medicine. My mom worked in the camps and money was completely useless there as there was nothing that you could buy with it. In Bam, Iran, the same happened after the earthquake. Iran asked for money too, but much of it was redirected for personal use. I can also see how some donations just create a handling problem or are not useful at all. When I went to Seattle last weekend to help the Red Cross, we made packages that looked like army rations that could be dropped from the air. They contained practical items, food and water.

Milan February 9, 2010 at 11:45 am

There is a big difference between giving cash to an organization like the Red Cross – which then uses it for food, tents, personnel, etc – and giving cash directly to a government.

The linked article is talking explicitly about the former case.

Hella Stella February 9, 2010 at 12:23 pm

Gaaaaah, this makes my mouth water! (Pic, not text)

. February 9, 2010 at 1:17 pm

Viagra, ski jackets and Father Christmas costumes were all sent to tsunami victims. Indonesia destroyed 75 tonnes of out-of-date medicine. And sometimes aid was worse than merely useless. There was a fashion for financing new fishing boats after the tsunami. A UN agency found that a fifth of the boats given to Sri Lanka were unseaworthy. Much reconstruction work was shoddy. A private company with no medical experience built health centres in the Indonesian province of Aceh.”

R.K. February 9, 2010 at 1:21 pm

I was just packing up a big box of Santa costumes and Viagra to send to Port-au-Prince.

Gail February 9, 2010 at 5:23 pm

I have also read many times that cash given to governments gets siphoned away by corrupt officials, and that has made me wonder how the aid from rich countries to poorer countries to help mitigate the effects of climate change can possibly be controlled.

For instance I would hate to see money spent on walls to restrain sea level rise since in my opinion such efforts will prove to be wasted. But people living there might want it to be done anyway. Who is going to made these judgments?

What a mess!

Milan February 9, 2010 at 5:30 pm

There are problems with all forms of aid delivery and, once again, this post is about what people give to the Red Cross – not what they give to foreign governments.

When it does come to foreign governments, non-cash giving has problems as well. Often, weaponry is considered a form of foreign aid. Also, countries wastefully require aid donors to spend aid dollars on products and services from the home country. Also, dumping free food into poor countries disrupts their food prices and can bankrupt local farmers, worsening food availability in the long run.

All agencies need to work in an imperfect world. Given the extent of human suffering around the world, we have to accept that there will be some negative consequences that accompany the good that can come from both emergency humanitarian aid and long-term development assistance (including unconventional forms, such as remittances).

Milan February 9, 2010 at 5:32 pm

Those wanting a better appreciation for how aid works these days should consider reading:

Collier, Paul. The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It.

Easterly, William. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good.

Sachs, Jeffrey. The End of Poverty: Economic Possibilities for Our Time.

Those three are like the trifecta of contemporary views on aid.

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Previous post:

Next post: