Private charity outpaces, outperforms gov’t foreign aid
For more than 10 years, Pastor Kirkland Walton of St. Peter’s Baptist Church in Glen Allen, Va., has passed a separate collection plate for Africa on Sundays.
That offering is then passed on to Africare, a charity that was just awarded four stars, Charity Navigator’s top ranking, for delivering more than 90 percent of each dollar it receives to Africans in need.
“The African-American community has always been in the trenches in our own community, and we understand that there is a tremendous need to remember our brothers and sisters in Africa,” Mr. Walton said.
In the past five years, Africare has given more than $300,000 in donations from black churches throughout the United States.
“People know that when they give to Africare, they’re investing directly in programs that reach the people of Africa,” said Africare President Julius E. Coles.
According to Africare and certified by Charity Navigator, more than 93 cents of every dollar spent by Africare during the 2006 fiscal year went to program-related expenses — about $37 million spent on development work and humanitarian aid.
Charity Navigator lists more than 100 charities dealing with some aspect of Africa — food, water, sanitation, HIV, persecuted Christians, saving wildlife — and 44 earned four-star ratings.
Africare — which is funded in part by U.S. government money, dozens of other Africa charities and parishes such as Mr. Walton’s — is just one example to illustrate that Americans are hands-down the most generous people on the planet.
In 2005, Americans donated more than $95 billion to the developing world. That is almost four times what the U.S. government gives in foreign aid and many times more than what Europeans give in public and private donations, according to a study by the Hudson Institute, to be released this month.
“There is a whole new world of philanthropy out there, and it is being led by the United States,” said Carol Adelman, director of the Hudson Institute’s Center for Global Prosperity.
The U.S. government is often criticized for being stingy. Despite spending more than $2.3 trillion in development aid since the early 1960s, it ranks just 23rd among the top 25 developed nations in terms of government aid as a percentage of national income. Private donors step in
But since 1990, private philanthropy has far exceeded government funding. U.S. private donors coughed up an estimated $95.2 billion in 2005 — nearly four times the $27.6 billion spent in official foreign aid — for schools, orphanages, medical clinics, supplies and other development programs in Africa, Latin America, Russia, Eastern Europe and Asia.
Bill and Melinda Gates and Warren Buffett got the headlines for private pledges of billions of dollars in health and education programs abroad, but much more comes from ordinary, churchgoing American families.
“It comes down to religiosity, those who go to church. Those who go to church donate more than those who don’t,” Mrs. Adelman said.
According to Arthur C. Brooks, author of “Who Really Cares: America’s Charity Divide, Who Gives, Who Doesn’t and Why it Matters,” 91 percent of people who attend regular religious services donate to some charity or another each year, as opposed to 66 percent who rarely or never go to church.
“Religious people donate more money than nonreligious ones, even to secular causes. And since America is a more religious nation than are most European democracies, charitable giving here occurs at a higher rate,” Mr. Brooks writes.
Official government aid is usually calculated as a percentage of gross national income (GNI), formerly known as gross national product, or GNP.
The U.S. government devotes just 0.22 percent of its GNI to foreign aid, while Norway’s government, which ranks No. 1, gives 0.94 percent.
However, in total amounts, the United States government and private donors spent nearly $123 billion in overseas assistance in 2005, six times more than any other nation. Britain followed in second place with $19.8 billion and Japan in third with $19.68 billion.
“American colleges and universities give more in scholarships to foreign students than Norway, Finland, Sweden or Denmark each gives in [total] foreign aid,” said Mrs. Adelman.
Colleges and universities donated $4.6 billion in foreign scholarships in 2005. Churches and religious organizations gave $5.4 billion. Secular organizations gave an estimated $16.2 billion, which includes volunteer time, or the labor of Americans who traveled abroad to build churches and schools, or work in clinics. Money for home
By far the largest figure in U.S. private donations came from remittances, money that immigrants send home. According to the Hud- son study, U.S. immigrants sent home — mostly to Latin America — $61.7 billion in remittances in 2005. In other words, two-thirds of U.S. private philanthropy overseas is in the form of remittances from legal and illegal immigrants.
Using figures from the InterAmerican Development Bank, the World Bank and the U.S. Bureau of Economic Analysis, the Hudson study found that the estimated 12.6 million immigrants living in the United States earn about $500 billion a year, and more than 10 percent of that is sent home.
“Some people say we should not include these figures, because that is just family members giving to family, but the studies clearly show that remittances reduce poverty,” Mrs. Adelman said.
She said there is no way to determine if the immigrants sending remittances home are legal or illegal immigrants, but the 12 million figure is often used to describe the number of illegal aliens in the United States.
Mrs. Adelman said the foreignaid community is loath to include remittance figures, because it undermines the argument that more government foreign aid is needed.
“Regardless of the motive, remittances are reducing poverty, and it is a significant flow,” she said. “Remittances are probably the greatest poverty-reducing agent in the world today.”
Regardless of their status, she said, Latin American immigrants in the United States are donating in church, forming hometown associations, holding bake sales, collecting donations and participating in “traditional American philanthropy.”
And Latin American immigrants tend to be religious. Many are devout Catholics and follow the pattern that religious people tend to give.
Jeremiah Norris, also at the Hudson Institute and a researcher on the report, said that the remittance number is underestimated by as much as 50 percent.
“This number does not count the material goods sent home — the Nike sneakers, or refrigerators and appliances that are sent home,” he said.
Some organizations are uncomfortable with the Hudson findings, but “our numbers have not been
challenged,” Mr. Norris said. He also maintained that private aid is far more efficient than relief that is controlled and distributed by the government. Much money, little effect
In March, a Canadian government committee on foreign affairs concluded that, after 40 years of aid, little has been done with its $12.4 billion in bilateral assistance to propel Africa from economic stagnation or to improve the quality of life on the continent, Mr. Norris said.
The committee found that Canada’s International Development Agency was ineffective and ordered an immediate review, with the possibility of closing it down or folding it into another agency.
A study produced by the Cato Institute, a libertarian think tank, in 2006 — titled “Does Foreign Aid Help?” — concluded that “the empirical evidence on the effectiveness of foreign aid is discouraging.”
The Cato report by Simeon Djankov, Jose G. Montalvo and Marta Reynal-Querol said that “recent literature [. . . ] provides ambiguous results on whether [government] foreign aid helps or hinders developing countries.”
In fact, “foreign aid has had a negative impact on the democratic stance of developing countries, and on economic growth by reducing investment and increasing government consumption,” said the study.
Another problem is that U.S. government aid is tied up with multiple legal constraints. Food aid purchased with U.S. tax dollars, for example, must be bought from American farmers and shipped on U.S. ships. Inefficient aid
This makes U.S. food aid far more expensive than if it were bought in the region, and in the event of a drought, it takes much longer to reach those in need. In addition, food aid bought in the region could put money in the pockets of the farmers most in need and prime the local economy.
Rep. Jim McDermott, Washington Democrat, touched on this issue when he reported to his colleagues in testimony in 2003 regarding the HIV epidemic in Africa “that 53 cents out of every dollar that we put out for AIDS never left Washington, D.C.”
But it is not all Washington’s or London’s fault.
In his new book “The Bottom Billion,” Oxford economist Paul Collier dissects the failure of foreign benevolence to drag the developing world out of poverty.
Mr. Collier identifies corrupt governments as one of several problems. In one heartbreaking example, he followed funds released by Chad’s Ministry of Finance to rural health clinics. Just 1 percent reached the intended. Ninety-nine percent went into the pockets of corrupt officials.
As a result, Mr. Norris said, more than 50 percent of health care delivered in Africa is delivered by missionaries working for private charities.
“The proselytizing end has diminished. They are really focused on development,” he said.
“We do not oppose government aid,” the Hudson Institute’s Mrs. Adelman said. “I don’t say that all government aid is a waste of money, just that certain forms don’t work.”
Disaster relief has worked pretty well, she said. National-security support funds, such as the aid that has gone to Israel, Egypt and more recently Pakistan, “has a mixed record.”
“It is development aid that hasn’t worked very well at all,” she said.
But Mrs. Adelman said she is optimistic, because American churches, mosques and synagogues have stepped into the gap.
“We are very positive about what is going on in the private sector regarding giving. We are very high on churches. It is the private sector where the action is, where the future is.”
Africare is one of the highest-rated charities on Charity Navigator. In five years, Africare has been given $300,000 by black churches.