I’ve always tried to do my bit for charity and I’ve always seethed at those who haven’t. Those who complain that the donations are misplaced and misspent. I’m suspicious of many of their motives. I’m suspicious that these so-called soothsayers are hiding their stinginess behind a convenient barrier of self-righteousness. However, I’ve always realised there to be an element of truth to their claims, but reconciled it by reasoning that no matter how benevolent an institution, it will always have its bureaucracy and bad apples. Even if some of the money is gobbled up by red tape, even if some does line some undeserving pockets, it’s better than nothing, right? And so, when the earthquake struck Nepal earlier this year, I proudly punched my credit card details into Oxfam’s webpage.
Days after the disaster, I was due to fly into Kathmandu but delayed my trip and instead headed for Cambodia’s capital, Phnom Penh. Ironically, whilst travelling through that beautiful nation — home to some of the world’s most gentle of people — I read Cambodia’s Curse, a gripping and frustrating offering from Pulitzer Prize-winning journalist Joel Brinkley that left me so angry as to question whether I would ever hand over my hard-earned cash to an international NGO ever again.
Since the fall of the totalitarian Khmer Rouge regime in Cambodia in 1979, per capita, no other nation on Earth has received more aid. As of 2009, Cambodia was home to the world’s highest concentration of NGO and donor organisations — over 2,000 — which included esteemed names like the United Nations, the World Bank and the International Monetary Fund. Such was the race to outdo their competitors, such was the desire to remain on Cambodian soil, such was the lack of co-ordination between these organisations that they would regularly spend time and money on duplicate projects. Such has been their total failure, after billions upon billions of dollars have been pumped into the country, the BBC website, in 2015, still reads: “Corruption is deep-rooted and Cambodia is still one of the world’s poorest countries, with one third of people living on less than one dollar per day… Of late, land concessions and forced evictions have sparked social unrest. Many thousands of people have been displaced as the government has granted land to companies who are keen to exploit resources… Meanwhile, years of widespread illegal logging have led to a rapid decline in Cambodia’s forest cover. International watchdog Global Witness says top officials are involved in the trade.”
This isn’t news to the foreign donors. Year after year they threatened Cambodia’s corrupt government with the cessation of funds unless things changed. But the Cambodian leaders called the donors’ bluff and it didn’t take long for them to realise that those threats were as limp as their morals. Year after year the donors handed over hundreds of millions of dollars to a nation whose leaders they knew very well were, among countless atrocities, stealing rice from its starving citizens. But still, the money came. The leaders built mansions and private golf courses as its citizens shivered in bamboo huts. But still, that’s right, the money came. “It was clear that these people had a lifestyle they wanted to protect,” writes Brinkley. “Though their work was challenging, it was often rewarding. Many were highly paid… They could live in sumptuous homes and hire as many servants as they wanted. If they cut off aid to the government, as the human-rights groups were demanding, many donors would lose their jobs, or at least their postings.” Brinkley damns those donors as nothing but “enablers”.
Before April’s earthquake near Kathmandu, Nepal was receiving over US$1 billion annually with nearly three-quarters of that money channelled through government accounts. “But,” writes Thomas Bell, an expert on the region, for Al Jazeera, “While the donors behave like they have all the answers, they’ve never been able to deliver on their rhetoric. They are, in fact, as deeply entangled in the dysfunction, and as much part of the mess as everyone else.”
Just days before the earthquake, a collection of donors had pulled the plug on their ten-year support of a project known as the Nepal Peace Trust Fund (NPTF). No-one appears to know what became of the organisation’s finances and the donors wouldn’t explain why they withdrew. “One of the NPTFs programmes was intended to provide compensation to victims of Nepal’s conflict [the civil war which lasted from 1996 until 2006],” says Bell. “In practice, many genuine victims received nothing, while district-level politicians and administrators gave the money to local supporters. This is worth remembering now when it comes to earthquake victims.”
“Evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower.”
Weeks after the quake struck, aid had still failed to reach scores of villages outside of the capital. “It’s important to recognise that this emergency has, among other things, cruelly exposed the mess that Nepal was already living with,” Bell continues. “Many of the worst affected areas received little, or almost nothing, in terms of government or donor-driven support even before the earthquake.” The journalist doesn’t call for a cancellation of aid, rather a recalibration of “their dysfunctional and frequently counterproductive donor relationships.” It is, he says, the duty of the donors’ to learn from past mistakes and to study Nepal’s “very specific” history.
According to the World Bank, between 1981 and 2010, around 700 million souls were pulled from abject poverty. But, this is not necessarily a cause to celebrate the work of international NGOs as 627 million of those souls were Chinese. China is a country which has received little aid, but, tellingly, dragged itself from the dark ages through good old fashioned economic growth. Conversely, over 25% of sub-Saharan African nations are now worse off than they were in 1960 even though over the past half-century the continent has been handed over US$1 trillion. “Evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower,” writes Dambisa Moyo in the Wall Street Journal. “The insidious aid culture has left African countries more debt-laden, more inflation-prone… and more unattractive to higher quality investment. It’s increased the risk of civil conflict and unrest… Aid is an unmitigated political, economic and humanitarian disaster.”
As far back as 2005, the International Monetary Fund even published a not-so-subtlety-named report, Aid Will Not Lift Growth in Africa. And yet the cycle continues. “The most obvious criticism of aid is its links to rampant corruption,” cautions Moyo. “Aid flows destined to help the average African end up supporting bloated bureaucracies in the form of poor-country governments and donor-funded non-governmental organisations.”
A 2010 investigation by the Independent revealed that the Department for International Development (DfID), Britain’s governmental department that takes care of the nation’s multi-billion dollar aid budget, had lost over £700,000 in the previous five years through “fraud, corruption and abuse” by developing world leaders or non-profits using United Kingdom funds. “But,” writes Cahal Milmo, “DfID has refused to release a detailed list of the projects and countries where fraud has been uncovered saying to do so would jeopardise the United Kingdom’s relationship with foreign governments and risk further abuse by detailing the nature of the offense.” Three years later, a joint investigation by the Tampa Bay Times and The Centre for Investigative Reporting revealed that the USA’s 50 worse charities had paid their solicitors over US$1 billion in the previous past ten years while giving as little as 3% of their donations to good causes.
Reputations were further diminished in 2014 with the publication of David Craig’s book, The Great Charity Scandal, in which he details systematic and widespread abuse of funds. The United Kingdom alone has over 195,000 registered charities that raise and spend nearly £80 billion annually. “Together, they employ more than a million staff — more than our car, aerospace and chemical sectors — and make 13 billion ‘asks’ for money every year,” writes Craig in the Daily Mail. “But many charities have become hungry monsters, needing ever more of our money for their own ambitions. And while registered charities claim that almost 90p in every pound donated is spent on ‘charitable activities’, many spend at least half of their income on management, strategy development, campaigning and fundraising — not what most of us would consider ‘good causes’.”
“Giving money can feed the hungry, and help the sick — but it does not free people from the institutions that make them hungry and sick in the first place…”
There was outrage when it was revealed that Britain’s Save the Children charity is paying its top earner a £234,000 salary — with a further 20 employees earning in excess of £100,000 — but refused to reveal those employees’ names. A study by the magazine Third Sector concluded that as of 2014 there were 32 United Kingdom charity bosses being paid in excess of £200,000, an increase on the previous year, with a further 12 paid a whopping £300,000 or more. Writing for the Guardian, Duncan Green of Oxfam GB has attempted to justify these mammoth incomes. “People working for charities are not saints, but really pretty normal, mainly middle class types,” he says. “They have partners, kids… go on holiday… We worry about getting old, pensions, all that stuff… But it’s also a vocation, something that inspires and excites and makes you feel very lucky… Although it’s a lot of cash, it’s way below that level of responsibility would earn in the private sector.” There is intense pressure, he adds, to stretch each penny, and that needs good management. “If you pay peanuts, you’re pretty likely to get monkeys,” he says, rather tactlessly, before adding, in brackets, “albeit well-meaning ones.”
This is more a matter of principle than practicality. A cut in charity bosses’ salaries is hardly going to save the world’s poor, but, their payslips don’t exactly flatteringly reflect concerns about the destination of the donations — whether they be the pockets of their own CEOs, or of dictatorial despots.
And so, what to do?
In their book, Why Nations Fail, MIT economist Daron Acemogly and Harvard political scientist James A. Robinson, argue that a nation’s wealth or poverty boils down to its “inclusive” and “extractive” political and economic institutions. “Inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills,” they say, “are more conducive to economic growth than extractive economic institutions that are structured to extract resources from the many by the few.”
Recognising why countries are poor — because of these extractive institutions — state the authors, will better help us understand how to help and to better manage aid. “We do not argue for its reduction,” they write in the Spectator. “Even if a huge amount of aid is siphoned off by the powerful, the cash can still do a lot good… Giving money can feed the hungry, and help the sick — but it does not free people from the institutions that make them hungry and sick in the first place… When aid is given to governments that preside over extractive institutions, it can be at best irrelevant, at worst downright counter-productive.” They make the point that it wasn’t foreign aid, for instance, that brought down South Africa’s apartheid regime, rather, international sanctions: “Those sanctions came from pressure from governments that would have preferred not to see them implemented… Governments don’t like cutting their ties to dictators who open doors for international business, or help their geopolitical agendas. Pressure needs to come from citizens…”
And so of course this shouldn’t be an excuse for us to stop punching in those credit card numbers or dropping coins into a tin. We can’t use imperfections within an already imperfect system as an excuse to simply not care. But charity is not just about giving. We must strive to create a world that needs no aid, but to do that (and in the meantime) we must ensure that our leaders — both political and charitable — are held accountable both for their actions, and lack of.