Myths About Aid and Charity

There are plenty of good reasons to donate to charity and increase our foreign aid spending. But myths about the effectiveness of aid persist, making many people concerned about donating. Let's separate fact from fiction.

Myth 1. ‘We already spend a vast amount on foreign aid’

The full picture:

The amount the developed world spends is tiny compared with its wealth. In 2016, net official development assistance (ODA) from the countries in the OECD Development Assistance Committee was USD 142.6 billion. The total aid was only 0.32% of the combined national income of those countries on average, or three dollars out of every thousand.

To give a point of reference, military spending from the U.S. alone amounts to nearly $700 billion per year (as of 2018)

People are often under the impression that a lot more is spent on foreign aid than actually is. The average guess of US citizens' estimates is that around 31% of the Federal Budget is spent on aid. In fact the US spends less than 1% of the Federal Budget on foreign aid.

Myth 2. ‘The money we have spent has had little or no effect’

The full picture:

Global poverty is a massive problem, and aid certainly hasn’t made it disappear yet. However, as seen above, the amount given in aid is less than often assumed.

Despite this, a lot has been achieved in the developing world:

• Smallpox was eradicated worldwide by 1980 following a World Health Organisation initiative launched in 1959. A highly contagious disease, it had been particularly devastating in South Asia, where it killed up to half of those affected and left survivors maimed.
• Guinea worm, an excruciating and debilitating condition, is extremely likely to be eradicated in the next few years thanks mainly to the efforts of the Carter Center, WHO and UNICEF: between 1986 and 2016 the number of cases per year went down from 3.5 million to just 25.
• The Institute of Health Metrics and Evaluation estimated that between 2000 and 2014 the $73.6 billion spent on child health by donors (including both private and public) averted the deaths of 14 million infants and children. This is in addition to the $133 billion spent over the same period on child health by low- and middle-income country governments, which is estimated to have averted the deaths of 20 million children.

Despite spending relatively little, we have made great strides forward in terms of health. Just think what we could achieve if we gave more, and we gave to the most effective programs!

Myth 3. ‘The problem is so large, my giving can make no real difference’

The full picture:

In fact, you can make more of a difference than you might think. For example, if a person earning a typical US income gave 10% of their income to the Against Malaria Foundation, then each year they could buy at least 2,000 mosquito nets, and throughout their working life they could buy more than 80,000 nets. AMF delivers the nets to its local partners that distribute them to the intended recipients. Through these joint interventions, 80,000 nets are expected to avert the deaths of more than 25 children under 5 years old, as well as numerous other benefits (such as saving older children or preventing debilitating but non-fatal illnesses). This is an incredible result.

You may not be able to end poverty on your own, but all great movements are made up of individual actions. If we all donated a percentage of our income to the most effective charities, together we could actually end extreme poverty in this lifetime.

Myth 4. ‘Charity begins at home: we should solve our own problems first’

The full picture:

There are also many people in very difficult circumstances in developed countries, who are certainly no less deserving than the developing world. But the question is: what can be achieved with our donation?

In the developed world, we already spend enough money on health, sanitation and education to ensure that, for example, easily preventable or treatable diseases are indeed prevented and treated. Overwhelmingly, the problems we are left with are ones which would be relatively expensive to solve. For that reason, the UK’s National Health Service considers it cost-effective to spend up to £20,000 (about $25,000) for a single year of healthy life added.

By contrast, because of their poverty many developing countries are still plagued by diseases which would cost the developed world comparatively tiny sums to control. For example, GiveWell estimates that the cost to avert a child's death through an LLIN distribution funded by the Against Malaria foundation is roughly $3700 (as of 2019). The NHS would spend this amount to add about two months of healthy life to a patient.

Myth 5. ‘Aid is useless due to corruption in the governments who receive it’

The full picture:

No-one denies that corruption in developing countries can sometimes lead to aid money or resources going missing. But the solution is not giving less, but giving smarter.

One way of reducing the danger of corruption is to donate to programs which do not deal in valuable goods which officials could divert. Another is to give to charities with strict distribution controls and robust impact assessments, ensuring that their work is actually making a difference rather than simply lining a few pockets. For example the Against Malaria Foundation is particularly careful to avoid and discourage corruption while carrying out its distributions.

Myth 6. ‘Aid just makes developing countries dependent on handouts’

The full picture:

It is true that, for example, donating large quantities of food can make it unprofitable to farm locally. However, many types of intervention simply do not cause this sort of problem and have overwhelmingly positive effects. For example:

• The distribution of drugs to fight neglected tropical diseases not only improves health, but leads to greater levels of education and wealth. Schistosomiasis Control Initiative and Deworm the World set up these programmes to be taken over by national health departments in a sustainable way, leading to decreased dependence on aid over time.
• Project Healthy Children helps governments to fortify staple foods with micronutrients. Once the standards and processes are set up, there is no need for any continued ‘handouts’.

This is an issue which we take into account in assessing charities, to ensure that the ones we recommend improve lives in a sustainable and non-exploitative way.

Myth 7. ‘Because it leads to overpopulation, aid only increases the problems’

The full picture:

Why do the countries in the developed world have much lower birth rates than the developing world? There seem to be a number of reasons:

• Lower infant death rates mean families don’t need to have as many children in order to guarantee that some will survive.
• At the same time, access to education, technology and other improvements in quality of life make it less necessary to have many children working to support their families.
• Greater access to contraception gives families more control over fertility.

Therefore by reducing infant death rates, improving quality of life and increasing access to contraception, aid might help to bring about this kind of ‘demographic transition’ in the developing world as well, reducing the birth rate while tackling extreme poverty at the same time.

There are also many ways in which aid can greatly improve the quality of people’s lives in poverty-stricken areas without increasing the birth rate. For example, it can cure people of blindness or neglected tropical diseases, which cause significant hardship but have only a small effect on mortality.

Even better, regular treatments through deworming campaigns have been shown (albeit with some controversy) to decrease school absenteeism and increase adulthood earnings, which are the sorts of improvements which tend to lead to decreasing fertility rates.

You can read more here.

Finally, we should note that there is no clear scholarly consensus that high population growth is a bad thing. While people consume resources, they also contribute to economic growth; a more populous country will not necessarily become poorer as a result. (See the Simon-Erlich wager for an example of academic debate over the link between population growth and resource scarcity.)

Myth 8. ‘We don't need charity; we need political action’

We are not saying that donating is all that can be done: we agree that social and political action is very important. In fact, there are cases in which political action could be more effective than donations. For example, Will MacAskill, Giving What We Can’s co-founder wrote an article arguing that in order to help refugees, “Donations can be helpful but are unsustainable in this instance, whereas political action could bring about real change”.

In other cases, though, donations can be a very effective way to bring about change. For instance, one could donate to support interventions that are proven to work and that governments would like to implement, but lack the resources to fund. Moreover, sometimes it will take a long time to shift attitudes, meaning that change will take a while to come. In the meantime, there are lives that can be saved and diseases that can be cured.

Finally, it’s worth stressing that there are organizations that work on political and systemic change. Many of these organizations could use additional resources to extend or improve their operations. If one believes this the most effective way to do good, then donating to these organizations would be in line with the Giving What We Can pledge.

In sum, there is no reason to think of donating and political actions as alternatives: they can both be ways to improve the lives of others.

Myth 9. 'Economic growth is going to lift people out of poverty. We should just focus on growth'

The full picture:

It is true that economic growth, especially in China, has substantially contributed to poverty reduction in previous years. However, even under very optimistic growth projections, it would take decades to eventually lift everyone on earth out of extreme poverty through economic development - something we find unacceptable. We have written about this in detail here. Moreover, many highly effective charities empower people by not only creating welfare benefits, but also economic ones.

Myth 10. 'We should support health systems strengthening instead of supporting ‘vertical’ interventions that might not be sustainable'

The full picture:

In countries with very weak health systems, we think that we should first focus on cost-effective vertical interventions of easily preventable diseases in order to disburden the health care system. Consider, for instance, the following graph, which shows a World Health Organization model for how much of a burden is placed on the health system by preventable malaria:

Myth 11. 'Stopping tax evasion by multinational corporations will close the gap in finance for development'

While improving tax collection may be one way to help with development, it is no fix-all solution, and the matter is complex. The Center for Global Development and the International Center for Tax and Development are both good sources for more information on this.

They write: “We find that the potential for governments to raise additional revenues by taxing multinational companies is limited by the actual levels of profit generated by foreign direct investment in each country; changes to effective tax rates may also have impacts on investment prospects. Estimates of corporate tax dodging are often presented, mistaken, or repurposed in a way that exaggerates potential impacts […] Much-quoted figures such as ‘‘developing countries lose three times more to tax havens than they get from aid each year” and “‘60% of global trade takes place within multinationals” or “Zambia could have doubled its GDP” are not likely to hold up.”

12. 'I have a question/objection/comment that has not been addressed here'

Feel free to send us an email with your question!

Summary

Many of the reasons people appeal to for not supporting foreign aid and charities are in fact myths. The facts are quite different:

• We are spending less on aid than we think, and less than we think we should.
• Aid has had positive effects on global health and could achieve more if we gave more, and gave more effectively.
• By donating more and more effectively, we can each make a great difference.
• We can achieve more by directing donations toward developing countries than to developed countries.
• Corruption only makes it more important to give to the best charities.
• We can help people in developing countries to help themselves, rather than depend on assistance.
• Supporting political action is incredibly important, but there is no reason to think of it in opposition to donating.

The best way to avoid the potential pitfalls of aid is to carefully consider which charity to give to. We have a few suggestions for how to approach this consideration here.

Why not Try Giving, choosing how much of your income to donate and how long you would like to do so? Or, if you’re ready to commit to giving 10%, you can join us.

What you can achieve

Sources: Organisation for Economic Co-operation and Development, ‘American Public Opinion on Foreign Aid’, World Public Opinion, Index of Global Philanthropy and Remittances 2012, The Hudson Institute