Is an In-Kind Donation the Best Donation?

The other morning I was presented with two opportunities by two different organizations to help those facing the winter weather without the appropriate attire. The first asked for new hats, gloves, scarves, and jackets for children in Romania. The second group was also asking for winter clothing. However, this clothing is going to be distributed to adults in the Pittsburgh area. Both groups are, no doubt, in need of the items. And given that the first is an organization helping children, the emotional pull to help is strong. But, which organization is making better use of the limited available resources?

One has to ask how much money is being used to transport the coats to Romania and if there are reasonably priced coats available there. For the sake of the discussion, I will say that they are paying something towards transporting the coats and that there are reasonably priced coats available in Romania. With that information, the cost benefit analysis says that it would be wiser to purchase the coats in Romania using the money that would have gone to shipping the coats from the U.S. The money spent on the coats would go into the Romanian economy, resulting in a double benefit. Additionally, when the organization brings in US coats to Romania, they could be harming the Romanian economy. This donation of coats, while valuable in the short term, has long term negative consequences.

While donating coats to Romanian children may provide a short term benefit, some in-kind donations can have immediate negative consequences. In the wake of Superstorm Sandy, there has been an outpouring of generosity from individuals, organizations, and corporations from around the world. In moments like these, it is particularly important to keep in mind how your donation will affect the recipients. Currently the American Red Cross, one of the organizations providing significant assistance to those affected by the storm, states on its website, “Financial donations make the greatest and most immediate impact.” Every organization is operating within a constraint of resources, both human and financial. In-kind donations can hinder disaster relief efforts because resources have to be diverted to process the incoming supplies. With monetary donations, the organization can buy desired supplies in bulk, reducing the manpower needed to process the donation and getting aid to those in critical need.

Aid and donations were one of the topics discussed at the One Young World Summit October 18-21, 2012 here in Pittsburgh, PA. I had the privilege of being one of the 1,300 young adults from 183 countries that made up this year’s delegation, comprised of individuals who had been on both sides of the donation equation. Former refugees talked about how the assistance provided to them had not been what was needed while others spoke of how they desired to end their country’s dependence on foreign aid.

During the opening ceremonies, former President Bill Clinton spoke about the consequences of international aid, specifically referencing his experiences in Rwanda. He discussed how well-intentioned organizations often do more harm than good with inappropriate donations that waste resources, harm vulnerable economies, and inundate fragile infrastructures. In reference to the work of his organization, he said “my goal is always to work myself out of a job.” He wants to be providing aid to those who have asked for help and only long enough to give them a chance to get back on their feet. Clinton described how the Rwandan government asked for assistance bringing the Partners in Health program that had been used in Haiti to their own rural areas. Initially, the program was implemented in two regions. After the first trials were successful, the Rwandan government asked that the program not be expanded using international aid. They had to find a way to implement the health care system “that [they] can afford to run when [they] don’t take aid anymore.” It is not enough to focus on short term goals without keeping an eye towards the future.

President Bill Clinton and one of the One Young World founders, David Jones.

One of my co-workers, the Program Officer for Global Links’ programs in the Caribbean, gave a presentation about the “Unintended Consequences of Aid” during the One Young World Conference. She has personally seen how beneficiaries have been harmed by donors not thinking beyond a willingness to “do good.” She has visited storage rooms full of donated medical equipment that hospitals overseas cannot use because they do not have access to the parts or maintenance services to keep the items functioning once they receive them, and she has seen incinerators being filled with expired medical supplies that the recipient has to dispose of because someone thought donating anything – even expired supplies – was better than nothing. Her tips on questions to ask before making an in-kind donation:

  1. What is the cost for the organization to collect, transport and deliver the in-kind donation vs the impact?
  2. Can the organization you are trying to help do a better job if they received a monetary donation instead?
  3. How well does the organization understand the beneficiaries? Is the collection the right materials needed at that time?
  4. How will the donation be sustained in the long-term?

So the next time you are faced with a question of where to donate your time, money, or resources, ask yourself how your donation can be made most valuable. Will your donation be money well spent? Will your donation be providing the recipient a stepping block to independence, will it leave them dependent on donations in the future, or worst of all, will it leave them drowning in unneeded materials and waste. It is harmful to assume any aid is better than nothing. As the holiday season approaches, take the time to evaluate the organizations you are donating to so your donation can truly be a gift worth giving.