Home .Development Development assistance -- not so stingy after all
Development assistance -- not so stingy after all
Tuesday, 02 December 2008 08:04

The US always gets a bad rap when it comes to providing assistance to developing countries. In 2007, US official development assistance amounted to some $22 billion, the highest of any country. But, it represented only 0.16 per cent of GDP, the lowest of any donor country, and way lower than the UN target of 0.7 per cent GDP.  Only five countries have reached this target -- Norway, Sweden, Luxembourg, the Netherlands and Denmark.

But Americans do not always look to government to solve their problems, and have a long tradition in private philanthropy.  The leading US museums rival those in Europe, not because of government, but thanks to private donors.

And so it goes for helping developing countries.  According to the Center for Global Prosperity in "The Index of Global Philanthropy 2008", US private philanthropy to developing countries (some $35 billion in 2006) exceeds vastly its official development assistance. 

Independent, community and grant-making operating foundations gave a total of $4 billion.  More than half of this money went to health programmes, while much of the rest went to international development, relief and environment programs.  One development approach that is getting more attention is represented by the Alliance for a Green Revolution in Africa (AGRA).  AGRA, launched in 2006 with siginificant assistance from US foundations, is an international, African-led partnership dedicated to practical solutions to boost farm productivity and incomes for the poor while protecting the environment. The Rockefeller Foundation  and the Bill and Melinda Gates Foundation joined forces to launch the initiative dedicated to revolutionising food production in order to reduce hunger across the continent. 

The Bill and Melinda Gates Foundation is perhaps the most well known US foundation.  In 2007, it gave grants totalling over $2 billion with $1.2 billion going to its global health program and $0.3 billion to its global development program.  This foundation has not however forgotton that charity should also take place at home -- its US program received $0.5 billion.   

For their part, corporations gave $5.5 billion.  Besides providing cash and in-kind donations, US corporations are engaged in global philanthropy in new and diverse ways.  For example, Coca-Cola and Unilever have turned to local community organisations and international agencies to pursue responsible business strategies.  These and other companies have put aside wrangling with Greenpeace to work with environmental groups to develop alternative technologues. 

Private and voluntary organisations (PVOs) gave a whopping $10.6 billion in funding to developing countries in 2006.  These organisations work to foster economic development, address social needs, provide disaster relief, assist refugees, promote human rights and implement environment protection.  For example, One Acre Fund is a new PVO linking poor African farmers (those with less than one acre of land) to commercial markets. The program fosters entrepreneurial approaches that will improve the marketability of crops from small, individually owned farms.  One Acre Fund founder Andrew Youn, a graduate of Nothwestern University's Kellogg Scool of Management, applies business school principles to the challenges of farming in rural Kenya.

Americans are also generous in their support for international students.  They gave $3.7 billion to students from the developing world in the 2006-2007 academic year.  This includes funds provided by US colleges and universities and private sponsors including foundations, business and religious organisations.  For nearly 30 per cent of international students, the US college or university or a US private sponsor was the primary source of funding.

Religiously affiliated nonprofit organisations -- faith-based groups, missionary societies, and religious fellowship organisations -- play a large role in American assistance to the developing world.  In 2006, it is estimated that they gave $8.8 billion.  For example, World Vision, a Christian relief organisation founded in in 1950 and headquartered in Monravia, California, specialises in child sponsorship programs, which make up about half the group's activities.  Individuals, families, churches, schools and otehr groups sponsor specific children or specific community projects in their own country or abroad.

While private philanthropy has been a particularly US phenomenon, it is now growing in other countries like the UK, Germany and Canada.

Although it is almost another story, it is also interesting to take a look at migrants' remittances.  One of the great benefits of today's international migration is that migrants can send money back home to help their families climb out of poverty.  Historically, the US has been perhaps the world's most open country to migrants.  Thus, one-third of the world's migrant remittances in 2006 ($220 billion) came from the US. At over $70 billion migrant remittances from the US are more than ten times those coming from the next developed countries on the list like Canada, Germany, Spain, UK and France.

How does it all add up?  When you take together official development assistance, private philanthropy and migrant remittances, US "assistance" to the developing world amounts to $130 billion -- over six times that of the next most generous.  And while on a per capita basis, the US comes in at number four after Norway, Sweden and Denmark.

So, perhaps the US is not so stingy after all!


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