Tag Archives: non-profit

Why Haiti? Why now?

Before I start, let me say that the earthquake in Haiti was a tragedy, and the public response to it has been laudable. Nothing I say here is intended to undermine the generosity of those who stepped forward to donate. But I feel the aftermath exposes a worrying pattern.

A natural disaster befalls a certain part of the world, and people wring their hands over it. Soon this settles down and people devote their energies to providing aid: governments and NGOs swing into action, and the general public mobilise their best efforts to provide funds from T-shirts, concerts, bake sales and good old-fashioned donations. The sense of hopelessness is temporarily assuaged until news gets back that aid can’t get through: Haiti’s lack of infrastructure combined with the crippling effects of the quake mean that aid is blocked by sheer logistical difficulties—and we’re back to hand-wringing again.

Nobody likes to feel powerless. But if you want to prevent unnecessary deaths, then I have good news for you: it’s easier than you think. Around one million people die from malaria each year, and nearly two million from tuberculosis (TB). An incredible 36 million die each year from causes related to malnutrition (this number very likely overlaps with the numbers for malaria and TB). The vast majority of these deaths are preventable, and at surprisingly low cost, since the limiting factor isn’t the Herculean logistical task of getting emergency aid in through narrow transport channels already at maximum capacity—it’s simply lack of funds.

Haiti may not be getting all the help it needs right now, but it’s quite possibly getting all the help it can handle for the moment. Meanwhile, poverty hasn’t let up elsewhere in the world, and by the third day of the Haiti relief effort an equivalent number of preventable deaths had happened elsewhere in the world.

I don’t pretend to have any answers to global poverty, but I’d like to suggest two questions that could usefully guide our human desire to make the world a better place. Firstly, how can I target my giving to optimise the amount of suffering saved in the world? Secondly, how can I target my giving to be sustainable and continue to pay dividends over time? If we can satisfy these, then I don’t see what more can be asked of us.

Paddington’s first microloan

One story I remember reading as a child was the episode of Paddington where everyone’s favourite anthropomorphised Peruvian bear makes his first deposit at the bank. When he goes to withdraw his five pounds, he is flabbergasted to learn that not only do his interest payments not amount to much (there’s a joke about bearer bonds in here somewhere) but that he doesn’t even get the same five pound note back that he put in—indeed his original note may even have been burnt, if it was an old one.

The recent fuss about micro-lending site Kiva not being all it appears to be reminds me of Paddington. A certain segment of the internet community is shocked, shocked, to find out that the loans they’ve been deciding whether to make or not have already been signed, sealed and delivered in the field. For people who were assuming that they had the power to decide who did and didn’t get a loan, this is undoubtedly a surprise.

The situation isn’t as bad as it has been made out to be: I’m assuming there is some sort of feedback effect between loans made and future loans funded. If Kiva lenders decide en masse to support only women, or goat-farmers, or people in Cambodia, then Kiva will request more such loans from their field partners and eventually more such loans will be made. Nor is it the case as far as I can see that Kiva is double-counting loans to a recipient. If you want to believe that the dollars received by a particular Cambodian goat-farmer are in some sense “your” dollars, then you can continue to do so.

Like Paddington, some charity donors seem to be confused about the fungibility of their donation. Charities may promise that your donation goes to the project of your choice, and maybe even that none of it is spent on administrative costs, but this is of course a half-truth. If your donation is added to the total on Project Y, this may mean that somebody elses (unrestricted) donation isn’t needed for Project Y, and that that donation can be used for administrative expenses. The net effect is no more benefit to Project Y, but a decrease in the deficit for administrative expenses.

This is as it should be. Administration is a vital link in the chain that drives the quite remarkable (though often unremarked-upon) process of turning figures in my bank account and clicks of my mouse into clean water and education and food for some of the poorest people in the world.