How Donating to Charity Can Make People Poorer

hey 42 here when you buy something for yourself whether it be a new watch or a new car you probably spend hours shopping around for the best deal on the highest quality Browns you want to know the exact features of the product some of you may even desire to know how that brand operates as a company is it ethical does it use cheap labor and cheap components however when we donate money to one of the countless charities out there most of us conduct no such research we give it to an anonymous person over the phone internet or to a stranger with a clipboard on the street and then we have absolutely no idea specifically where that money goes to what it buys or who it helps at least that is the case for the vast majority of charities but perhaps you should start to take a greater interest in the winding path that your charitable donations take because many of them lead to dead ends or worse sometimes donating to a charitable cause can actually make the situation worse as I will soon discuss if you want to do research on the charities you are considering giving to so you can discover whether your donations are actually going towards helping people or TV commercials then the best place to start is the charities financials in many countries including the US and UK it is the law of medium to large charities was published their financial accounts and submit them to a governing body such as the UK's Charity Commission and sure enough you can visit such websites and get a quick overview of the exact income and delineated expenditure of any large charity however you don't have to be a forensic accountant to make sense of it all there are other nonprofits such as Charity Navigator that keep a tab on the spending habits of other charities as well as investigating how they're run and exactly what their funds are spent on in order to mate each one yes that's right there is a charity whose entire job is to investigate other charities using Charity Navigator you can see what sort of philanthropic programs each charity carries out and in what countries and money they put into each program but this information is still rather vague and all you can really use it for is to ensure that the charity you are donating towards isn't spending 60% of your donation on posters with sad one-legged puppies of them this information doesn't give you the answer to the most important question you really should be asking will my donation to this charity actually help the people or cause I want it to help because throwing money as a problem doesn't automatically fix it in fact sometimes it can make matters much much worse take for example the many charities that install water pumps to deliver clean water to a community one point to a billion dollars of donors money has been invested over the past 20 years to install a total of 60,000 hands homes across sub-saharan Africa but today 40% of those do not work and no longer pump water they have malfunctioned at some point and because the community does not have the resources or know how to fix the pumping question it has fallen into disrepair no more than an expensive well-intentioned but useless and village ornament most water pumps are manufactured in India to low quality control and material standards buying cheaper pumps allows charities to make donations stretch further and they can thus advertise that they've delivered clean water to a thousand communities last year instead of just 500 consequently these budget pumps soon break down the boreholes are usually drilled incorrectly to because of a lack of quality on-site engineers and surveyors resulting in the pumps of merging into the ground at an angle instead of straight down which means they will eventually stop delivering water but one of the least effective means of giving is when charity send endless shipping containers full of material goods to underdeveloped nations this mostly consists of the developed world hand-me-downs charities such as Oxfam and others will ship used clothes and other goods to Africa if it doesn't sell after a certain period of time on the charity shop shelves more than 70% of clothing donated to charity shops globally ends up in Africa and Kenya alone imports more than 100,000 tons of clothes and other miscellaneous items from global charities each year how else could an overwhelming number of people roam the streets of Kenya or Zambia wearing I heart New York or Union Jack t-shirts when they've likely never visited America or Britain the issue is that these mountains of regularly imported clothes completely destroy local textile industries the very industries that have previously propped up both local economies and supercharged the national economic growth of many African nations such as Kenya Malawi Mozambique and Zambia all these have burgeoning domestic clothing industries before the boom of charities targeting Africa from the 60s onwards the textile industries have now overwhelmingly vanished in these places in the 1980s 500,000 people were employed by Kenya's textile industry today less than $20,000 largely this is because he immense influx of second-hand clothes flooding countries like Kenya has decimated the demand for local textiles putting hundreds of thousands of people out of work and hence struggling to continue to feed their families let's face it when you're struggling to make ends meet would you rather buy a locally made but pricy t-shirt or a dirt cheap or possibly free one from a market stall that import some overseas charities most people go into up to the latter it's not only donated textile goods that can devastate African economies and shatter the prosperity of communities in recent years there has been an explosion of well-meaning charities that specialize in donating electronic books such as laptops tablets and phones to African communities the idea is that enabling Africans to communicate will empower them to unlock their economic destinies and get reliable well-paid jobs or perhaps start their own business it's a lovely notion and the logic is mostly sound but it is predicated on the naive assumption that most Africans don't already have access to mobile phones this couldn't be further from the truth try walking through a city such as Kampala for five minutes once in the heart of darkness now more connected to the world than you would ever expect only twenty years ago there were fewer than four million mobile phones in all of Africa today there are well over half a billion handsets and more than 30% of people in countries such as Uganda own their own mobile phone there are used handset stores on every street corner and at every market in almost every town and like the textiles that came before this huge used mobile phone trade constitutes a thriving business that employs millions across the continent and provides a sustainable income for many small business owners who sell or otherwise are connected to the mobile market but each year there is a greater influx of used unwanted handsets and developed nations flooding places such as Kampala the demand for mobiles in Africa is increasing sure but the supply is overwhelming that demand which inevitably drives down the prices of market vendors the vendors who make their living from selling those devices I believe and so do some experts that it would be better for those charities to look at ways to use their donation funds to support the growth of these local businesses that buy sell and repair technology instead of footing those markets with cheap overstock or refurbished goods that will do the exact opposite to the community and what was intended the same goes for food donations with the exception of post disaster relief sending mountains of tinned food to developing nations only undercuts the local food retailer which means it never has a chance to develop of its own volition and locals who own a small shop or seller home cooking at a street food store may be forced to go out of business you could apply this same logic to any form of philanthropy based on the giving of material goods for a nation to cut its dependency on foreign aid it needs to grow from the inside out by developing its economy through local ingenuity and the prosperity of local businesses which inevitably have a trickle-down effect on the entire community and if a region needs to help a foreign aid to improve its local services and infrastructure to empower local businesses then that's what charity should be focusing on ultimately almost all forms of giving that involve the handing over of material goods and some services caused a dependency cycle where the recipients will begin to rely on that donated good or service to survive over time the community stopped producing those goods and services locally and the entire industries collapse which means as soon as those donations dry or all the charity focuses its efforts elsewhere that region will be left devastated and in a much worse position to sustain itself than ever before as the old proverb says give a man a fish and you feed him for a day teach a man to fish and you feed him for a lifetime but what have I told you that your small donation can actually cost a charity money when any donation is made there is an administrative cost associated with it's a charity has to pay for web hosting staff to maintain the websites and payment systems staff and the IT systems necessary to record the donation staff to process the donation accounting staff to enter each donation into the accounting system and send that tax receipts staff to bank donors which is usually done over the phone email or snail mail and finally reporting and analytics stuff the method of donation significantly alters the amount received taking a donation by cheque for example costs a charity roughly ten times the administrative cost to process when compared to a credit or debit card donation depending on the size of the donation the donation method how that charity operates and tens of other factors by the time it is process your donation can be reduced by up to fifty percent and if you donate a very small amount then the one-off processing costs can actually exceed your donation obviously all this varies wildly depending on how each charity processes its donations and how much it spends on various aspects of the administrative side of its business but next time you donate you may want to consider a slightly larger donation as the charity will often see greater value out of it because they will get to keep a higher percentage of it after processing so I'm sure when you give to charity you want to make sure that a your donation money isn't wasted and be your money actually helps to make a real positive change to someone or a community and thankfully not all charities are created equally there are some that do genuinely transformative work instead of shipping at mountains of semi useless goods to Africa or elsewhere and today such charities are much easier to find because of the charities such as give well we're established to review individual charities and in their own words search for the charities that save or improve lives the most per dollar they don't just analyze a charity's financials they make site visits to the offices and programs around the world to comprehensively audit how effectively those charities are using their donors donations their top recommended charities change from time to time so it's worth going to take a look yourself but they tend to be charities that focus on medical support for common issues such as malaria a vitamin deficiency and worms since usually getting help to overcome those illnesses is some that sufferers are unable to procure without outside help unlike a free t-shirt so your donation will make a real difference here ultimately who you gives you and how much you give is your choice but as a general rule of thumb the more your donation translates into those in need receiving even cash or highly specialized services and not material goods the better it will be for the long-term prosperity of the recipient thanks for watching I've just launched my first book sticker flag in it a thousand years of bizarre history from Britain and beyond if you want to get your hands on a first edition signed copy then head on over to unbound publishing the links in the description and pledge today thank you

Channel: Thoughty2

Views: 571,654

Keywords: charity, social change, nonprofit, social entrepreneurship, philanthropy, activism, charity work, africa, conflict, philantropy, giving back to the community, responsibility, thoughty2, thoughty 2, how donating to charity can make people poorer, donating, thoughty, thouthy 2, toughty 2, how

Id: PfT3M6bqZ0g

Length: 13min 51sec (831 seconds)

Published: Sat Jan 25 2020