Do donations achieve lasting social impact?

Do donations achieve lasting social impact?

Meet Joe, he has recently become an ethical shopper and active donor to a local charity after being moved by the plight of those less fortunate than him. He chooses to shop with companies such as Toms and Thankyou Group, who link Joe’s purchases to specific aid projects like giving shoes to people in developing countries, or investing in water projects. He likes the feeling of knowing that he is making a tangible difference. However, could Joe’s efforts to help actually cause more harm than good?

Firstly, it is often the case that the item or project is not actually required, or even practically useful in everyday life. As Kevin Star discusses with the example of the Lifestraw, such instances are a huge waste of resources that could have been used to greater effect. Secondly, even where the item is needed, the influx of free donations can actually crowd out existing local producers, who no longer have any customers for their products, and will likely go out of business.

Looking at these issues it is easy to blame the charities for not investing in longer-term outcomes, and simply delivering short-term relief. However, in reality we as donors must also accept some responsibility. Charities are dependent on our donations to operate, and must satisfy our misconceptions about aid, in order to secure funding. This is evident in the practice of professional begging which depends on those of us looking for the self-gratifying experience of ‘helping’ another person.

Currently we view charities as contractors, who we employ to deliver some predetermined product or service, like the goat or well that we ‘purchased’ at the local Oxfam store. We mistakenly feel qualified to decide what is most needed, and project our own preferences for a new school or fancy toilets onto the poor, malnourished child on all the billboards and television advertisements.

Furthermore, we then often go on to impose these preferences onto charities as restrictions on our donations; we tell charities that the $20 we just so generously sacrificed should only be used for buying blankets or school books, and demand that charities be held accountable for that. However, in reality, charities are actually in a much better position to understand the needs of the people we want to help; yet they are not allowed the flexibility to actually achieve change.

Focusing on deliverables, and restricting funds to a charity would be akin to investing in Google or Apple but telling them to only use the money on pens, or manufacturing some out-dated product that the market no longer wants. This should sound absurd to you in the context of the private sector, since we all understand that what we are investing in is the company and their ability to achieve profitably outcomes for us as shareholders. Unfortunately, charities are not afforded the same trust or understanding.

We currently measure the outcomes of our ‘aid’ by the amount we give – whether it be how much money or how many goats – and this ultimately rewards charities for meeting the needs of donors rather than aid recipients. On the other hand, charities investing in long-term outcomes, not only go unrewarded when their investments yield sustainable change, but are also punished for the inevitable failures they meet when trying to innovate more effective ways of achieving social impact.

If you feel that you could seriously manage a charity’s operations better than they could – and thus need to demand accountability for them delivering that pair of shoes – perhaps it is best not to donate to the charity at all. Achieving sustainable social impact is an investment not a purchase.

So, next time you go to buy a duck or pig from your local charity and they tell you that it will go to related projects, rather than actually shipping a duck or pig overseas, hold back the outrage. Instead, ask about the projects that they are investing in because that is where the real change happens.

Image: ‘Mogadishu aid flight 019’ by Oxfam East Africa, Licence at by