Will Aid Industry Help Haiti?

Ross Clark, The Times January 15, 2010

You don’t have to wait for the charity single any more. In the next few days millions will whip out their credit cards and donate to the aid effort for victims of the Haiti earthquake. If the response to the 2004 tsunami is anything to go by, aid agencies will quickly have as much as they can possibly spend.

In the six weeks after that disaster, Britons gave £365 million — $1,000 for every affected person — leaving charities a headache over how to spend the money. By law, money raised by charities for a particular disaster has to be spent for that purpose: some charities had to ask donors if they could spend the money on less-advertised disasters elsewhere in the world.

The aid industry has grown hugely over the past 60 years. In the early 1950s, according to the OECD, developed countries gave a little under £2 million in aid. In 2008 they gave £121 billion. Non-governmental organisations add about half as much again.

Systems for distributing the money, however, have lagged behind, so it is far from guaranteed that the £10 you donate will find its way to the places of most desperate need. Emergency humanitarian relief for natural and man-made disasters presents the biggest challenge. It accounts for only about 10 per cent of total aid to poor countries, but it is hard, if not impossible, to predict where it is needed and the money has to be spent at great speed.

And vastly more money tends to be raised for “noisy” disasters such as the tsunami than for disasters that attract less media attention. During the Kosovan crisis of 1999-2000, for example, aid agencies raised $166 for every victim. For the drought in Eritrea, which occurred at the same time, aid agencies raised only $2 per person affected.

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