Haiti earthquake relief seems less cost-effective than everyday international aid

The disaster in Haiti – and the media coverage of it – pull at the emotions in a way that everyday suffering in the developing world does not. However, our rough calculations suggest that in fact, a donor can have a bigger impact for less money by funding top charities’ everyday activities to reduce unnecessary death and debilitation.

We estimate a “generous” cost-effectiveness figure for a donation to Haiti is by considering (a) the total amount given and (b) the total number of people affected by the disaster.

Total amount given: It’s hard to find definitive figures for the amount of money already donated to the relief efforts, but ReliefWeb provides what appears to be a reasonable lower-bound (i.e., conservative) estimate. As of January 27, ReliefWeb reports that $1.2 billion had been given or pledged to Haiti relief efforts. (See document A on ReliefWeb’s Haiti Earthquake: Appeals and Funding page.) Note that its numbers clearly do not include all charities or all revenue sources: for example, it lists only $2.8 million raised by Partners in Health, whereas the Chronicle of Philanthropy’s roundup – up as of two days ago but seemingly down at this writing – lists $40 million (and also includes many charities that don’t appear at all in Reliefweb’s stats.)

Number of people affected: Haitian authorities estimated that 1 million people were left homeless by the quake (according to ABC World News) and perhaps 3 million were “affected” (according to the Guardian). For the sake of our calculuation, we’ll assume a range of 1-3 million people affected.

Expenses per person affected: using the Reliefweb number (assuming that nothing is excluded from it and that no more money is forthcoming, both assumptions that clearly understate the funds) yields a current level of $395-$1,185 pledged or donated per person affected. (For some interesting context, we’ve seen estimates that the 2004 Indian Ocean Tsunami affected 2,000,000 people and donors gave approximately $14 billion — funding per person of $7,000.)

We estimate that our top-rated charities save a life for approximately that amount. While it’s clearly not possible to directly compare the impact of relief efforts to the impact of saving an individual’s life, our feeling is that saving an individual’s life is likely to have a significantly larger effect on that person than the future change likely to occur in the average life of a Haitian due to the relief efforts.

Comments

Haiti earthquake relief seems less cost-effective than everyday international aid — 5 Comments

  1. While this is blatantly true, and has been known for a long time in the sector, this is just not how human moral compass works: we don help our depressive,suicidal neighbor, but do rush to his help when his house burns.

    Also, in disaster reaction, preparedness is way underrated. In the Caribbean, there are regular hurricanes, and the ‘prepared’countries have so much less victims.

  2. Your larger point is credible, but there are two caveats you should mention.

    1. “Pledged” is very different from “donated.” What fraction of that $1.2B do you think it likely to materalize?

    2. One advantage of disaster/crisis relief is that, at least in the short-term, there is little risk of crowding out local efforts. Duplication is another story, of course.

  3. In addition to the heart-rending images, I wonder how much donors are motivated to give to disaster relief because the challenge feels easier to comprehend and “solve” than something systemic like “poverty.” Disaster victims need food/water/shelter/basic health care. Buy them, bring them in, and you’re done. Of course, this isn’t the case at all: disaster relief is quite complicated and presumably at risk of massive waste and inefficiency.

  4. Perhaps a bit off-topic, but I wonder how much latent guilt is involved in the American response to the Haitian quake. Perhaps almost none, given that most Americans probably have little or no familiarity with our proud history with the Haitian people. But I can’t see the valiant Anderson Cooper reporting on CNN Heroes: Saving Haiti without thinking just a bit about the mentality underlying some of the attention.

  5. Aram, you’re right that pledges are different from gifts, but note that the most recent Chronicle tally has close to $1 billion reported in actual revenue just by U.S. charities. I’m not sure I follow you re: crowding out local efforts – as we discussed in this post, infrastructure may be a serious bottleneck and it definitely seems possible for aid to “get in the way.”