Why haven't huge donations changed the world?

[LDFerguson]

I love charities who market themselves on the principles that a small amount can make a difference. For example, Sightsavers reckon that €28 can fund an operation to remove a cataract.

Or www.plan.ie who enable you to sponsor a child for €22 per month.

Then you have the mind-bogglingly enormous philanthropy of Bill Gates, Warren Buffett and others. In 2007 alone, the Gates foundation [broken link removed]. Newman's Own have given away $200 million.

Now I know that these charities don't necessarily operate in the same areas as the ones I have mentioned.

But my point is - if the Gates Foundation can give away enough in one year to pay for over 45 million cataract operations, why can we not see some world-changing progress? Surely the combined resources of all the world's charities should have achieved some huge goal by now, like eliminating one disease outright or eliminating hunger in at least one small country?

Am I missing something?

 

[Towger]

Am I missing something?

Out of Bill's $2B I wonder how much is swallowed up by admin costs?

 

[LDFerguson]

543 staff x $60,000 average salary each (wild guess) is $32.5 million. If other operating costs brought that figure up to $50 million that's still only 2.5%.

 

[Staples]

Without wishing to be glib, it's probably the equivalent of state aid for ailing companies. You can support them all you like and it will help for a while but ultimately unless they're well managed they're doomed to failure.

For the same reason, I believe that any form of charity will only ever be succesful in papering over the cracks or in providing once-off urgent assistance (e.g. in the case of the earthquake in China).

Genuine aid would seek to ensure that countries were managed by competent governments capable of providing for a country's long-term developmental needs. However, this requires political intervention, not charity and as experience has shown this is difficult to achieve without being accused of interfering. Similarly, there are powerful vested interests throughout the world who are more intersted in preserving the status quo. Reforms to world trade regulations, for example, would go some way towards allowing these countries to develop econmically, but how likely is that?

 

[LDFerguson]

Your sentiments echo my fears, more or less. It would be incredibly frustrating to think that the billions of well-intentioned charitable donations from around the world each year are ultimately pointless.

I wonder should some of Bill's billions be spent covertly overthrowing dishonest dictatorships?

 

[Remix]

There was an interesting book published a little while back
"The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It (Oxford). "
(written by Paul Collier former head of the world bank)
Haven't read it myself but it was was well covered in various reviews. e.g. http://www.ft.com/cms/s/0/4858ed7e-0178-11dc-8b8c-000b5df10621.html

There are approximately six billion people on earth; the top billion are enjoying historically unprecedented prosperity; and the next four billion are on their way to affluence; the bottom billion (70% of which are in Africa) are "disconnected from the dynamics of productivity" and are trapped.

He identifies the trap as having one or more aspects:
the conflict trap, involving civil wars and genocides;
the natural resource trap, in which focus on oil or other riches deflect from balanced economic development;
the trap of being landlocked with bad neighbors, which results in the destruction of trade and communications;
and the trap of bad/corrupt governance & a breakdown in legal economic order.

His bottom line is not very positive: Development aid can and should help many people, but most of the bottom billion will not and cannot be freed from poverty in our lifetimes.

The solution he argues is long term - over generations - to take actions that encourage some/or any gradual movement towards a functional economy.

According to the book those enjoying affluence often take for granted the "stupendous complexity" of a functioning and sustainable economy.
Implementing this in areas devastated by the traps he describes is going to be a very long and difficult process.

 

[rmelly]

A couple of general observations:

1. How much is spent on emergency & stabilising efforts rather then improving things on an ongoing basis, e.g. infrastructure
2. A very large % of world population lives in poverty (billions), a few billion doesn't go that far.
3. Maybe they are maintaining the status quo, as in preventing further deterioration but only making very marginal improvements
4. Are the governments of the contries in need of aid co-operative? Are they siphoning off some (or much) of the aid, preventing it getting where it needs?
5. Some countries like Ethiopia seem to suffer droughts/famine every few years - maybe there is no solution, maybe they need to abandon Ethiopia (or certain areas of it), and move the population to somewhere that is sustainable?
6. You fix someones sight, but if he doesn't have a job or ability to feed and better himself does it really matter?

Plus staples makes a very good point on world trade. It's not in the West's interest for the developing world to develop too fast, given pollution concerns, oil demand etc. We're happy to sell to them or use them for outsourcing or manufacturing, but ultimately all this investment is to benefit the company - any benefits to the countries is a secondary by product that the company can take or leave. And if things get a bit more expensive and effect margins, then the company can easily afford to move further afield.

 

[Simeon]

Without wishing to be glib, it's probably the equivalent of state aid for ailing companies. You can support them all you like and it will help for a while but ultimately unless they're well managed they're doomed to failure.

For the same reason, I believe that any form of charity will only ever be succesful in papering over the cracks or in providing once-off urgent assistance (e.g. in the case of the earthquake in China).

Genuine aid would seek to ensure that countries were managed by competent governments capable of providing for a country's long-term developmental needs. However, this requires political intervention, not charity and as experience has shown this is difficult to achieve without being accused of interfering. Similarly, there are powerful vested interests throughout the world who are more intersted in preserving the status quo. Reforms to world trade regulations, for example, would go some way towards allowing these countries to develop econmically, but how likely is that?

Sad but true.

 

[Elphaba]

Just finished reading 'The Billionaire that wasn't' - How Chuck Feeney secretly made and gave away a fortine. In 1992 he secretly transferred
his stake in DFS (Duty free shoppers) to his charitable foundation - Atlantic Philanthropies. He has given most of his vast fortune to charities, while steering what type of investment will do most good for society.

He has donated several million dollars to ireland to finance university research, libraries, and on campus accomodation, particularly, Limerick university, & DCU,to name but a few. He always sought to have government match his donation. Troughout all, he chose to remain anonymous, and lives a frugal lifestyle. His motto is - Giving while living
and intends to dispense of his vast fortune before he dies. He also has invested in health care around the world. These donations are bound to have made a huge difference to peoples lives, but huge donations cannot ever prevent civil wars, droughts, genocide, natural disasters etc.