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Monday Morning Development Newsletter:  


How to aid? – Guidelines for the generous
By Lykke E. Andersen*, La Paz, 28 January 2008.

“Sometimes when we are generous in small, barely detectable
ways it can change someone else's life forever.“
Margaret Cho

Generosity is a very admirable trait, but sometimes generosity backfires. The most horrific example I can think of, is poor parents chopping off the hands of their children in order to make them more effective beggars.

Each individual donation is rarely harmful, and probably much needed, but when millions of such donations are made every day over decades, it can change incentives in undesirable ways, as in the example above.

When considering which charity to support, it is important to think through the potential negative side-effects. Since each individual project is unlike to have serious negative side-effects, the charities themselves will not present such information. They will naturally and rightfully stress all the positive impacts of their projects.

Lacking a good, thoughtful guide for donors, here are a few recommendations:

1)       Think big:

Instead of imagining the impacts of the one project you are considering, scale it up and imagine the impacts of hundreds of similar projects or millions of similar donations. This is not unrealistic, as most poor countries (and rich ones too) have thousands of active NGOs receiving donations from millions of people.

As an
example, consider shelters for pregnant teenage girls. Having a baby when you are 14 can be very bad news for both mother and child, and help is clearly warranted. The girls can stay for free at the shelter for 18 months, and they will get food, clothing, baby supplies, and training. Sounds great! Just be sure that it does not sound so great that young girls think it is worth becoming pregnant just to escape annoying parents or a lousy job. Such shelters should never become the easiest option for the girls.

In general, if aid is conditioned on some undesirable characteristic (like poverty or teenage pregnancy), it has a tendency to promote those undesirable characteristics, as people try to qualify for the aid. As far as possible, you should try to condition on something desirable, like school attendance or work.
Creating jobs is much better than giving gifts.

2)       Think small:

You don’t have to try to save the World. Just take time to talk with your children, colleagues, friends, students, neighbors, a passing traveler, and anybody else who might benefit from your experience. Take on an exchange student or an apprentice, or go working abroad for some time. Learn a new language. Treat foreigners in your own country with hospitality and respect, and be open-minded and friendly when you travel. Organize unusual events with an unusual mix of people in order to help expand their minds. Read ferociously in order to expand your own.   

Most likely, your everyday actions and attitudes will have a much larger impact on the World than a few thousand dollars sent to a charity. Especially if those actions and attitudes inspire others.
 
Related articles:
- Do Your Aid Projects Hurt the Poor?
- The First Principle of Development
- True Public Goods, Local Consumption or Imported Goods
- Should the Aid Industry feel threatened by the increase in remittances?

(*) Director, Institute for Advanced Development Studies, La Paz, Bolivia. The author happily receives comments at the following e-mail: landersen@inesad.edu.bo.

Ó Institute for Advanced Development Studies 2006. The opinions expressed in this newsletter are those of the author and do not necessarily coincide with those of the Institute.

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