‘Tis the season to be… giving

In this season of generosity and giving, I wanted to comment on the complexities of donating to projects overseas.   I was particularly inspired after reading a post on La Vida Idealist by Peace Corps volunteer, Amanda’s, observations in Honduras, with particular reference to this point:

‘…it is almost always better to donate money rather than objects. Shipping items is more expensive, things invariably get lost, and sometimes you end up with 25 of one thing and only 2 of another. It is generally easier, faster, and more productive for the organization to purchase and transport the supplies they need themselves.’

I fully agree with this statement and, in fact, aside from the shipping costs themselves, the products that you buy at home are almost always going to be much more expensive than buying something in-country.  Not to mention the fact that buying in-country also means that the charities that are spending benefit the local economy and buy more culturally appropriate goods.  For example: the other day I was invited to lunch at a family that I am good friends with.  I wanted to take something along, so I decided on a bottle of wine.  Now, I personally am not a huge fan of sweet Peruvian wine so thought it might be interesting to take an Argentinean Merlot for them to try.  After lunch, wine and beer were brought to the table and I went to get my bottle from downstairs – they were all so suspicious of it and despite me urging them to try it, it was decided that it ‘should really be used for cooking’.  I learnt my lesson and next time will take something that they will definitely enjoy!  This is a small example, but imagine it on a larger scale – all of the children at one children’s home being given top of the range iPods but don’t have the software, knowledge or sufficient numbers of computers to actually use them, so they just get put away or even sold by the management to raise money for basic needs or more culturally appropriate and useful presents…

Lately I have been reading a really interesting book by Giles Bolton called ‘Aid and Other Dirty Business’ about aid and trade conditions around the world and a shocking fact is the extent to which aid is still tied – particularly by the USA.

‘Most American food aid, however, comes from America.  Not only is it a lot more expensive, but it’s an awfully long way away, so far that the food can’t be produced in response to an emergency because it takes, on average, five months to deliver.’

Bolton then goes on to highlight how these agribusiness contracts to provide several million tons of food aid each year only comprise 2-3% of the huge companies’ turnover, yet they get paid 11% more than open market prices for providing this food.  Contracts for transportation are also put up for tender and at the end of the day 40% of the cash destined for food aid through the American taxpayers is estimated to have been spent on US shipping firms.  So, the money would have gone a lot further had the food been procured locally as well as it benefitting many more people in the country with the food crisis.

It is quite amazing how many extra costs can be put on donations of goods coming into the country, aside from the extortionate shipping costs that the donor pays at their end.  Somehting that LAFF has recently become aware of is that, aside from the bank charges we incur in the UK to send funds overseas, our partners in Peru also incur a charge of around $18 per incoming donation.  So, we have decided to offer to fund this for our partner children’s homes – after all, why should it be a burden for them to receive our funds?  For me, it is so sad that things like this mean that NGOs here can’t even think about promoting things like regular giving campaigns as the charges would no doubt negate, or even supersede, the donations given.

Another issue here in Peru is the high customs charges that are imposed on incoming packages.  And surprisingly, it is actually illegal to ‘import’ second-hand clothes!  One of the children’s homes that LAFF works with once had an experience related to this and it is truly saddening.  A European charity wanted to send them school supplies, but would only do so by buying the goods in Europe and shipping them to Peru.  Why?  I do not know – perhaps they had convinced a company to donate the goods, perhaps they were worried about transparency, or maybe they wanted to brand the goods or take photos of the large shipment to show their supporters?  They will have had their reasons.  Anyway, Peruvian customs are tough and so, once the boxes arrived, the children’s homes were sent a bill for the duties they needed to pay totalling something in the region of 2000 soles ($740).  Were they able to afford this (which they weren’t) then, on top of that they would have also had to pay to transport the goods all the way from Lima to Cusco – a 22 hour bus journey over the Andes.  So the school supplies stayed in Lima at the customs office, the children’s home had no school materials and the European charity had, with all the best intentions I’m sure, wasted that donation.

LAFF is constantly learning and improving how we provide support and assistance to children’s homes in Latin America.  With LAFF’s presence on the ground, we are able to channel donations and funds efficiently and effectively to our partner organisations as well as monitoring exactly how these funds are spent.  We consult with children’s organisations to identify their needs and then try to meet them within our focus areas of Education, Vocational Training, Capacity Building and Sustainability.

Filed under: Blog by Fran Talavera