Myths About Aid and Charity

Household survey as part of IPA's WTP Endline program in Senegal (Image: Grace Saul/JPAL / povertyactionlab.com)

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There are plenty of good reasons to donate to charity and increase our foreign aid spending. But myths about the effectiveness of aid persist, which makes many people concerned about donating. Let's separate fact from fiction.

Myth 1. ‘We already spend a vast amount on foreign aid’

The full picture:

The amount the developed world spends is tiny compared with its wealth. In 2012, governments of developed countries spent $128 billion on foreign aid, and private aid from citizens added $56 billion. BUT:

  • The total aid was only 0.4% of the combined national income of those countries, or four dollars out of every thousand.
  • The total aid was only $152 per person living in developed countries.
  • There are 5.84 billion people in developing countries, which means that the total aid was only $33 per recipient.

The Iraq War of 2003 cost more than the amount given in foreign aid over the past 50 years!:

People are often under the impression that a lot more is spent on foreign aid than actually is. US citizens consistently estimate that around 25% of the Federal Budget is spent on aid, and say that they believe that the figure should be around 10%. In fact the US spends less than 1% of the Federal Budget on foreign aid.

Myth 2. ‘The money we have spent has had little or no effect’

The full picture:

Global poverty is a massive problem, and aid certainly hasn’t made it disappear yet. However, as seen above, the amount given in aid is less than often assumed.

Despite this, a lot has been achieved in the developing world:

  • Smallpox was eradicated worldwide by 1980 following a World Health Organisation initiative launched in 1959. A highly contagious disease, it had been particularly devastating in South Asia, where it killed up to half of those affected and left survivors maimed.
  • Annual worldwide deaths from malaria were reduced by over 80% between 1930 and 2010, from 3.8 to 0.7 million.
  • Using oral rehydration therapy, annual worldwide deaths from cholera and other diarrhoeal illnesses were reduced by 65% between 1980 and 2001, from 4.6 to 1.6 million.
  • Just look at the pages for our recommended charities to see the impact that they are already having, improving health and improving lives.

Despite spending relatively little, we have made great strides forward in terms of health. Just think what we could achieve if we gave more, and we gave to the most effective programs!

Myth 3. ‘The problem is so large, my giving can make no real difference’

The full picture:

In fact, you could make more of a difference than you might think. For example, if the average US citizen gave 10% of his or her income to the Against Malaria Foundation, then each year it could distribute 700 mosquito nets, preventing 190 cases of malaria and 2.2 deaths. This would amount to saving 90 lives over the course of his or her life – hardly “no real difference”!

You may not be able to end poverty on your own, but all great movements are made up of individual actions. If we all donated a percentage of our income to the most effective charities, together we could actually end extreme poverty in this lifetime.

Myth 4. ‘Charity begins at home: we should solve our own problems first’

The full picture:

There are also many people in very difficult circumstances in developed countries, who are certainly no less deserving than the developing world. But the question is: what can be achieved with your donation?

In the developed world, we already spend enough money on health, sanitation and education to ensure that, for example, easily preventable or treatable diseases are prevented and treated. Overwhelmingly, the problems we are left with are ones which would be relatively expensive to solve. For that reason, the UK’s National Health Service considers it cost-effective to spend up to £20,000 (over $30,000) for a single year of healthy life added.

By contrast, because of their poverty many developing countries are still plagued by diseases which would cost the developed world comparatively tiny sums to control. For example the Against Malaria Foundation distributes mosquito nets at a cost of only $2,838 per life saved. The NHS would spend this amount to add two months of healthy life to a patient.

Myth 5. ‘Aid is useless due to corruption in the governments who receive it’

The full picture:

No-one denies that corruption in developing countries can sometimes lead to aid money or resources going missing. But the answer is not giving less, but giving smarter.

One way of reducing the danger of corruption is to donate to programs which do not deal in valuable goods which officials could divert. Another is to give to charities with strict distribution controls and robust impact assessments, ensuring that their work is actually making a difference rather than simply lining a few pockets. For example the Against Malaria Foundation is particularly careful to avoid and discourage corruption while carrying out its distributions.

Myth 6. ‘Aid just makes developing countries dependent on handouts’

The full picture:

It is true that, for example, donating large quantities of food can make it unprofitable to farm locally. However, many types of intervention simply do not cause this sort of problem and have overwhelmingly positive effects. For example:

  • Programs which teach skills can help poor people to do things like grow their own food or learn the skills necessary to earn a decent living. As the saying goes, “teach a man to fish, and you feed him for life”.
  • The distribution of drugs to fight neglected tropical diseases not only improves health, but leads to greater levels of education and wealth. Schistosomiasis Control Initiative and Deworm the World set up these programmes to be taken over by national health departments in a sustainable way, leading to decreased dependence on aid over time.
  • Project Healthy Children helps governments to fortify staple foods with micronutrients. Once the standards and processes are set up, there is no need for any continued ‘handouts’.

This is an issue which we take into account in assessing charities, to ensure that the ones we recommend improve lives in a sustainable and non-exploitative way.

Myth 7. ‘Because it leads to overpopulation, aid only increases the problems’

The full picture:

Why do the countries in the developed world have much lower birth rates than the developing world? There are a number of reasons:

  • Lower infant death rates mean families don’t need to have as many children in order to guarantee that some will survive.
  • At the same time improvements in quality of life make it less necessary to have many children working to support their families.
  • Greater access to contraception gives families more control over fertility.

Therefore by reducing infant death rates, improving quality of life and increasing access to contraception, aid might help to bring this kind of ‘demographic transition’ in the developed world as well, reducing the birth rate while tackling extreme poverty at the same time.

There are also many ways in which aid can greatly improve the quality of people’s lives in poverty stricken areas without increasing the birth rate. For example, it can cure people of blindness or neglected tropical diseases, which cause significant hardship but have only a small effect on mortality.

Even better, regular treatments through deworming campaigns have been shown to decrease school absenteeism and increase adulthood earnings, which are the sorts of improvements which tend to lead to decreasing fertility rates.

You can read more here.

Myth 8. ‘We don't need charity; we need political action’

The full picture:

There are many ways in which political action could lead to great improvements for those living in developing countries, from changing the aid policies of powerful countries such as the United States to reforming the way in which world trade is conducted.

However lasting economic change is notoriously difficult to bring about, not least because there are vested interests prepared to spend a lot of money to avoid change. Where money is spent on both sides of a political battle, the overall good done is usually nil.

There is more hope for organisations which push for political change in the developing world. Project Healthy Children places advisors within recipient governments to offer encouragement and technical assistance to push forward mandatory standards for food fortification with micronutrients. Similarly Deworm the World provides the expertise to enable governments to put into place regular school-based deworming programmes.

Myth 9. 'Economic growth is going to lift people out of poverty. We should just focus on growth'

The full picture:

It is true that economic growth, especially in China, has substantially contributed to poverty reduction in previous years. However, even under very optimistic growth projections, it would take decades to eventually lift everyone on earth out of extreme poverty through economic development - something we find unacceptable. We have written about this in detail here. Moreover, our recommended top charities also empower people by not only creating welfare benefits, but also economic ones.

Myth 10. 'We should support health systems strengthening instead of supporting ‘vertical’ interventions that might not be sustainable'

The full picture:

In countries with very weak health systems, we think that we should first focus on cost-effective vertical interventions of easily preventable diseases in order to disburden the health care system. Consider, for instance, the following graph which shows how much of a burden is placed on the health system by preventable malaria:

Estimated number of malaria fever cases seen at public health facilities in Africa in 2015 according to different levels of Bednet coverage
.

Myth 11. 'Stopping tax evasion by multinational corporations will close the gap in finance for development'

The full picture:

While improving tax collection may be one way to help with development, it is no fix-all solution, and the matter is complex. The Center for Global Development and the International Center for Tax and Development are both good sources for more information on this.

They write: “We find that the potential for governments to raise additional revenues by taxing multinational companies is limited by the actual levels of profit generated by foreign direct investment in each country; changes to effective tax rates may also have impacts on investment prospects. Estimates of corporate tax dodging are often presented, mistaken, or repurposed in a way that exaggerates potential impacts - for example, large aggregate tax loss estimates are compared with aid revenues or healthcare funding gaps, implying that taxes raised in China, Brazil and South Africa might be available for public spending in Cambodia, Haiti and Malawi. Multi-year tax estimates are compared with annual costs of nurses or teachers. In some cases larger estimates (‘trillions’) which relate to estimates of corruption, informal sector activities or offshore assets held by domestic citizens are mistakenly repurposed to represent complex tax planning practices of multinationals. Much-quoted figures such as ‘‘developing countries lose three times more to tax havens than they get from aid each year” and “‘60% of global trade takes place within multinationals” or “Zambia could have doubled its GDP” are not likely to hold up.”

12. 'I have a question/objection/comment that has not been addressed here'

Feel free to send us an email with your question!

Summary

Many of the reasons people appeal to for not supporting foreign aid and charities are in fact myths. The facts are quite different:

  • We are spending less on aid than we think, and less than we think we should.
  • Aid has had positive effects on global health and could achieve more if we gave more and more effectively.
  • We can each make a great difference individually, and together we can end extreme poverty in this lifetime.
  • We can achieve more by donating abroad than to causes in developed countries.
  • Corruption only makes it more important to give to the best charities.
  • We can help people in developing countries to help themselves, rather than depend on assistance.
  • Supporting political action is a viable alternative to direct aid, although a more uncertain one.

The best way to avoid the potential pitfalls of aid is to carefully consider which charity to give to. Find out which charities we believe can use your donation the most effectively on our Top Charities page.

Why not Try Giving, choosing how much of your income to donate and how long you would like to do so? Or, if you’re ready to commit to giving 10%, you can join us.

What you can achieve

Sources: Organisation for Economic Co-operation and Development ‘American Public Opinion on Foreign Aid’, World Public Opinion Index of Global Philanthropy and Remittances 2012, The Hudson Institute