I am always on the lookout for what I consider the perfect charity. Most people want to know that the money they donate is used well, but few wonder what kind of negative effect their well intentioned donations can have. Many well meaning charities do things like give away clothes, food, or other things. After all, what better way to help a poor person than to give them stuff? That is completely appropriate and works well for relief aid after disasters. The folks in the Philippines could use just about anything right now. On the other hand, giving that kind of aid to people in order to alleviate ongoing poverty can lead to some big problems.
The biggest of the problems are creating dependance on free goods or money and the ensuing disruption to the local economy. It is far too common for a village or area to be made worse off by well intentioned charities. One of the stories I heard was of a church that decided to donate eggs to a village. Free food, what could be wrong with that? The villagers liked it of course but the ones that were trying to sell eggs were promptly put out of business. When the church inevitably decided to end the program, the chickens had long since been eaten and the village was left without a way to get eggs. It’s one example, but you can get a feel for how free goods screws up the local systems and economies. It’s easy to forget that businesses, no matter how small, fill needs and serve the community. When you eliminate local businesses with unsustainable substitutes, bad things will eventually happen.
So when I look for charities, I am looking for ones that can have a big impact on the lives that are touched by it. I also look for ones that do not create dependance. After all, I’m hardly wealthy man, I might have to stop donating at any moment! The easiest ways to avoid dependance is to explicitly limit the time frame, concentrate on boosting growth, or achieve a specific, non repeating task. I’ve found three charities that meet these criteria and I think they’re really good ones.
Poverty Cure is an organization run by the Acton Institute, a Catholic organization that emphasizes commerce and business activity as a way of eliminating poverty. Not only that, they recognize the dignity and desire of people to better themselves through work and business. It is a humanizing force. Instead of looking at the poor as victims, as someone to pity and help, Poverty Cure recognizes that the poor are the solution to their own problems. A central part of their promotional materials asks, “Can you relate to the poor as partners?” When efforts are put towards helping people to create wealth, the entire approach changes. Both the folks from Poverty Cure and the recipients understand that looking for ways to make money is a far more sustainable and empowering approach than distributing aid ever could be. It’s a wonderful organization. There is no dependency created as self sufficiency is the goal. They do tend to disrupt things, but only in the best way possible:)
I’ve talked about Give Directly before. A handful of economists came up with some general rules for what they thought would be the most effective type of charitable giving. The ones they came up with were to give money, not goods, have no strings attached to the gift, surprise people with the money, and make it a lump sum or of a short duration. Economists have always known that a pure cash infusion is always a better way to help people than so called gift in kind donations. The people that receive food stamps can only use them for one thing, cash can be put to any use. The recipient will know what their most pressing needs are. It might be food, but it might be something else. Trusting them to do what is best for themselves is not only the most charitable thing to do, it is also the most effective. That was the theory and now they have independent research showing that the process works very well. Because the recipients are chosen without knowing that they could get money, there is no gaming the system. And because it is usually a lump sum, they can’t depend on more money coming. I encourage you to check the link and read up on Give Directly, they are doing great work.
I am especially happy to have found Liberty in North Korea (LINK). The day to day life of people living in North Korea is brutal and short. The most repressive government in the world makes its citizens life like serfs while the elites live well. Who wouldn’t want to escape that? It isn’t easy to do though. Some manage to get into China, but their hardships have just begun. If they are found by the Chinese government, they will be deported back to the DPRK. There they will usually find themselves in work camps, prison, or possibly even executed. Like every immigrant that is in a new country illegally, the North Koreans in China resort to black market labor. For women, this frequently means the sex trade. It’s brutal and they have very few chances or choices. LINK runs a kind of underground railroad to help refugees from North Korea get out of China and into a country that allows them to move somewhere they don’t have to worry about being sent back. Usually that means South Korea or the US. LINK says that the cost of doing this is about $2000 a person. That includes placement in a host country. I can’t imagine what kind of courage and desperation it must take to smuggle yourself out of your country with the knowledge that you could be imprisoned or shot for trying. And then to have to live life on the run, doing God knows what to survive. All because they don’t want to, you know, starve to death. I am happy to help these folks out and I’m glad there are organizations like LINK to help them. I consider any money sent to them to be high impact donations. Please do check them out and donate to save desperate people.