Does charity maintain people in poverty?

Photo by Ben White on Unsplash

We all have seen pictures of sad children in poor countries, people who have lost theirs homes because of natural disasters, people who need food, clothing and water... people in need who live in extreme poverty. Nowadays, there are many charity organizations who seek financial or other kind of aid from people in rich western countries in order to help those unfortunate people in the poor ones. People send clothing, food, make donations, volunteer to help those who are in need.

Do you know that rich countries send billions of euros/dollars every year to struggling third world countries. Billions! Just to give you an insight, according to Giving USA 2017, American individuals, estates, foundations and corporations contributed $390.05 billion for total giving in 2016. Can you imagine? This is a lot of money!

Now we can definitely say that after all, we are actually truly generous, kind and compassionate people, wanting genuinely to help the others. I find this fascinating and it makes me believe more and more that this world still has a chance to become a better place and that we can make a difference together, by joining our hands.

However, this is all great, but maybe now you are asking yourself : well, if we are so generous and we donate so much money and other material matters to poor countries, why don't we see any improvement? There are still many poor and starving people even though according to The International Poverty Line today “only” 10% of the world's population lives in extreme poverty, while in 1990 they were 30%.

So, what does extreme poverty actually means? People are considered to be in extreme poverty when they live on less than $1.90 per day. $1.90! This is extremely low comparing to the amount of money people spend on a daily basis in the western countries. And yes, it is maybe true that nowadays less people live with less than $1.90 per day, but what about the people who live on $3, $5 or $10 per day? They still live in poverty! Also, we don't have to forget that the levels of deprivation are still very common in many countries which means that inequality remains!

It looks like the billions of dollars that we donate each year don't really end the existence of poverty. Why is it like that? There are so many billionaires nowadays who can actually make a donation of let's say $100 millions and solve a couple of problems in a developing country. And actually, many rich people make donations to charities and work on projects in struggling countries in order to improve their economics. Where is the problem then? Is charity really helping?

Actually, there are many problems and it is all connected. Charity helps! But for a short period of time. In the beginning of a crisis it is crucial to help people. For example, after an earthquake or another natural disaster or a war, when people have lost theirs homes and have nowhere to go or nothing to wear and eat, it is very important to help them. This is where charity's work comes very useful. But after this first period of crisis passes, charity can become even toxic.

Do you know the feeling when you get something for free and you get it all the time? Without paying anything in return? You lose the value of it. You stop appreciating what you have because you didn't work for it. Or do you know people who have always relied on their parents or friends for everything and have rarely done something by themselves? They are not capable to take responsibility for theirs actions and to be independent. It is the same thing with charities who continue their work for too long in struggling countries – at some point, we don't make these people a favor anymore, we make them become dependent and passive. Excessive donations are also a reason to completely destroy the local economy of a country. But before seeing all these consequences of excessive charity work in struggling countries, let's first see why poor countries are actually poor. Is it their fault? Is it the economic system's fault? Why do poor people exist?

Why are poor countries poor?

Is it because of corruption? Or it is maybe the government's fault? Or the internal policy failures? Actually, many people think that poor countries and people living in extreme poverty exist because of the last reason – internal policy collapses which means that it is the government's and the internal laws' fault. And, of course, bad national distribution of goods.

The truth is that these reasons are obviously a part of the problem, but not the big reason for it. Poor countries don't necessarily need western countries in order to go out of their poverty (many people think that without aids from rich countries, poor ones are lost which is not true). Actually, the real reason why some countries are poor and others are not, is the global economic system which works well for some countries in the world (rich and powerful western countries) and not so well for other countries (the developing ones). The reason for that is that this systems has been designed over 500 years ago, when the colonialism started. You can see now that the society and the world changed since that time. People's needs and lifestyle, as well.

So, what actually happens to the money we donate to poor countries?

This means that for example, the money we donate to poor countries, actually, flows the opposite way – from the poor countries to the rich ones. Why is like that? Often, when a country makes a donation to another one, it is not really for free. We think that we donate our money to poor countries because we are very generous and want to help them and that's it, no strings attached, but this is not really the truth. When a country makes a donation to another one, that comes with some sort of obligations – like for example vote for the benefactor in UN agreements or they have debts towards the benefactor (they have to pay loans to western banks).

Another big reason for poverty are illicit financial flows in form of tax evasion. Multinational companies which operate in poor countries, but have theirs headquarters in rich ones, steal wealth from developing countries and put it in tax heavens. It is possible to do that because of the rules written by the World Trade Organization that makes it possible. It is very difficult to track transfers. The World Trade Organization is ruled by a small number of rich countries which decide “the destiny” of the world. Poor countries have no actual power in decision making.

Jason Hickel, the author of “Divide” says that “These financial flows outstrip the aid budget by a factor of 10. So for every dollar of aid that poor countries receive, they loose 10 dollars to multinational tax heavens. Another one is debt service. Poor countries pay 200 billion dollars per year in debt service to banks in rich countries.” “That's just the interest payments on debt, many of which have been payed-off already, many times over, some of which are accumulated by legitimated dictators... That outstrips the aid budget by a factor of two”.

This shows us that it is actually false when we think that rich countries have nothing to do with the impoverishment of poor countries. Now let's see what happens to the local economy when we donate to much.

The local economy is destroyed.

Yes! To much donations make the local economy of a country lose its power. For every bag of rice we send, a local agriculture loses his clients. Small local business are dying slowly from charity when the charity work continues for too long. As I already said, charity is important in the beginning of a crisis, but when it continues for too long it starts making people dependent and it is killing the small business, the work of local producers and salesmen. For example, when people in poor countries receive for free clothing from the US, they don't buy the clothing produced in their own country. That means that a local business is dying, is loosing its potential clients. The result of the dying local economy is the growing poverty in the country. So, the initial good intentions, could become a disaster in the long run when overdone.

Another very important thing is to see what is the impact of overdone charity on people in poor countries. Too much charity and free supplies

make people become dependent.

People need to be actors in their own life in order to feel good and useful. One of the biggest people's needs is the need to have responsibilities. To be responsible for something or someone. It makes you feel important and useful. When we get everything we need for free, we stop valuing it. We become lazy and passive. Overdone charity does not really help people become stronger and independent individuals. It is actually the opposite, it makes them feel pathetic and become dependent. When charity continues for too long, people start thinking that they are incapable of doing things by themselves, that they are hopeless and have no skills. They lose the ability to provide for themselves and theirs loved ones. They stop BELIEVING in their own strength!

I work with people who live in poverty and this is something I see all the time. People don't believe in theirs own capacities and capabilities. They don't think they are good enough or smart enough because no body gave them the chance to express themselves or to let them show what they can do. Very often, poor people think that they are stupid, because their whole life they have been called stupid. Nobody wanted to hear them or to listen to them. It is very important to give these people the opportunity to freely express theirs thoughts and feelings. To give them the chance to dream and to think big. We have so much to learn from them!

Poor people need to believe that they can be the actors in their own life, that they can make good decisions and take responsible actions. They need to feel strong again and take in hands their life. We need to understand that when we make something FOR somebody, we don't help them! Only doing something WITH somebody can really help this person in a long-term. This is the only way we can show them that they don't need other people to do things for them, they can do them themselves. This way, they could actually become, again, independent individuals.

So the question now is

Why do we do it? Why do we prefer to lean on charity anyways?

The answer is : because it is easy. It is easy to donate money, clothing or food. You don't have to make much effort. You don't have to go to another country or meet people who are different from you and have a completely different life than yours. You can stay at your home and just with one click make a donation or get rid of your old stuff after the spring cleaning. Although, I think these are very important steps to take in order to help one another in times of crisis, this is not a solution to the big problem – ending the existence of extreme poverty in the world. Unfortunately, we can not “fix” what is wrong in our society only by focusing on the consequences of the issue, but not on the root cause.

I know that in nowadays society we hurry all the time. We are scared of loosing our time and we are right – time is precious. But we have to understand that easy and quick solutions are not always (or never) the best ones. Very often it is far better to invest in the long-term process. Yes, you are not going to see the results immediately, but when you do, you will realize that all these years and efforts were not worthless and you actually did not lose your time or energy and did make a change.

One example that I can give you from my personal experience from working with people who live in extreme poverty, is something that we call People's University. This is a place where poor and often non educated at all people have the freedom to express theirs thoughts on a specific topic. Many people will say that this is not going to change theirs lives and they will still live in poverty 10 years from now. The thing is that people who live in extreme poverty and have no education, often think that they don't have an opinion, that they are stupid and whatever they say is useless and inaccurate, so better don't say anything at all and in my opinion, this is one of the reasons for them to live in poverty. They believe they lost battle, they are hopeless. Some of the people who now come to the People's University and talk in front of everybody in the room are people who 10 years ago were terrified of doing that. Now they have the courage and the confidence to express themselves and to say what they think even if the others don't agree. And we know that even for well educated people sometimes it is difficult to talk in front of a crowd. But it takes time! Everybody has their own rhythm. This is a very personal process and we can just guide and help people evolve, but not force them. They will do what is necessary when the right time for them comes.

This also leads to another very alarming point which is that

We are scared of poor people making decisions.

Actually, we don't want poor people to make decisions, so we prefer to make them for them. Powerful people who represent rich countries in big international institutions know that it is very dangerous to give equal power to developing countries. It is better if they are suppressed and powerless. This way they can do what we tell them to do. Once again, we can see that slavery still exist and that a handful of rich countries make decisions for the world. Actually, we need to understand that if there are people who live in extreme poverty, that must be profitable for someone. As war is a way for some people to earn a lot of money, it is the same with poverty – while some people are starving, other are having theirs pockets full.

The question now is

What can we do to change this reality?

We don't have to stop doing charity work! Charity is very important and helpful in the initial phase of a crisis. It helps a community to recover and step back on their feet. But it does not have to continue for too long. When it does, the process of recovery becomes a process of becoming dependent and passive which completely kills people's capabilities to be responsible for their own life.

So, instead of making permanent donations to poor countries, we need to think of a way to develop and to improve the community. The best way to that is through investments and job opportunities. People have to do something. They have to work. This is the only way one can feel useful and helpful for the society, but also for theirs families. One person once told me, that the worst thing in the world is not really the poverty itself, it is to be seen as useless and incapable of doing anything, like the world does not need you. This is the moment when people start thinking that their life is meaningless. It is very powerful to hear something like that, especially, when you know that everybody deserves to be respected and to have a place in the society like every other human being. Working is not only giving you the possibility to earn money, but it is also giving you the possibility to feel like you actually DO something for the society, that your existence is not meaningless.

A great platform where people give loans to other people in order to start working on theirs projects is KIVA. I love their slogan “Dreams are universal, opportunity is not”. If you want to support people in poor countries or people who don't have enough money to realize theirs dreams, I highly recommend to join this great community!

Another great thing that we could do, instead of charity, is volunteering and actually, doing something TOGETHER with the people we try to help. A team work between the benefactor and the benefited is an amazing way to give people the opportunity to see that they are actually capable of doing something, that they have skills and knowledge. Doing something meaningful WITH them and not FOR them is the key here. It applies to other areas of life as well – when other people do something for us, we don't actually learn anything, we just get the final result. This does not allow us to be the actual authors of our lives. Luckily, many NGOs offer volunteer positions where the volunteer has to build houses, paint walls, draw, read books, clean with the people from a community.

Talking about NGOs and organizations to which make donations, do not forget to well investigate them before doing so. Look for how the money for theirs projects was raised, who the sponsors are, if they have some detailed financial record on their website. You can check my article Are NGOs a huge business? Things to look for when choosing an NGO. where I talk about the things we should look for when choosing an NGO.

And last, but maybe the most important one and unfortunately, it is not in our power, is democratizing the global institutions. An economic policy reform is needed. A reform that gives the opportunity to every country in the world, no matter if it is a big one, a small one, a poor or a rich one, to has access to equal rights of vote in international institutions, where poor countries don't have to feel the obligation to give their voice and support a big donator, but can actually make a real statement and take a position on a certain issue that concerns them.

In the end, we need to understand that the most important thing for every human being in order to grow and evolve is to be capable to take control and be responsible of their own life in the best possible for them way. This is how one can become a strong and independent citizen who feels empowered and actually makes a difference in the world. It is a slow process of learning. It takes time and courage. It does not happen over night and this is why helping and supporting each other in difficult times by thinking, doing, making, creating TOGETHER is so important. It is a team work that changes lives. Love, Elena

References :

Global Extreme Poverty by Max Roser and Esteban Ortiz-Ospina, March 27 2017 https://ourworldindata.org/extreme-poverty#extreme-poverty-in-a-historical-perspective

Aid programs keeping countries in poverty by Renegade Inc https://renegadeinc.com/aid-programs-designed-keep-countries-poverty/

How to make sure your charity doesn't keep people poor by James Huenink, October 25 2016 http://thefederalist.com/2016/10/25/make-sure-charity-doesnt-keep-people-poor/

GivingUSA Official Press Release 2017, June 12 2017 https://givingusa.org/giving-usa-2017-total-charitable-donations-rise-to-new-high-of-390-05-billion/