First it was shoes, then shirts. I don’t have much to add on questions like “Are supplies in fact clogging the roads?” and “Are there in fact people in Africa who don’t wear shirts because they can’t find/afford them?” But to me, the argument against in-kind donations is both simple and general (i.e., it doesn’t depend much on the specifics of the goods):
1. It seems nearly always preferable to sell your unwanted belongings and give the proceeds to charity.
I’m not sure how many (if any) people are “desperate for shirts.” But it does seem that an easy test of whether your old shirt is worth anything to anyone is to ask, “Will someone pay for it?”
This makes it likely that your shirt itself will not get to the poorest people – it will get to whoever pays the most for your shirt. But as long as you give to the proceeds to the best charity you can find, this seems like a good outcome. Imagine that a less-poor person is willing to pay $3 for your shirt; a poorer person wants your shirt but can’t (or won’t) pay $3 for it. That implies that the latter person is better off with the actual $3 (or $3 worth of the best charitable services you can find) than with the shirt.
Of course, if you sell, someone has to pay enough not only for the shirt, but for the costs of shipping and logistics. But that’s part of the point. If there’s no one in the world who will pay enough for your shirt to cover shipping costs, that’s a red flag that you’re looking at a wasteful transaction. Throw out the shirt and give cash. (Again: if someone in Africa is not willing or able to pay the shipping costs to get your shirt, that implies that giving them cash or charitable services equivalent to those shipping costs would be more valued than the shirt.)
The 1 Million Shirts campaign has asked for alternative ways to help people. I think “collect the million shirts, sell them off and give the proceeds to an outstanding charity” is a reasonable proposal.
This is also my understanding of how Goodwill works.
It seems that this argument holds for nearly all in-kind donations. There will be exceptions,* especially where a gift is driven by an acute local need for a particular good. But I would guess that such situations are the exception, rather than the rule, because I don’t think most in-kind donations are driven by the needs of the recipients. That brings me to the next point.
2. Just because your gifts are accepted doesn’t mean they’re wanted.
The American public often … attempts to collect and donate commodities, also referred to as “gifts-in-kind” (GIK). GIK are most often inappropriate for relief programs and harmful to the environment and the local culture. They are expensive to transport, relative to the cost of procuring the same commodities locally. GIK use up scarce resources such as transportation routes, warehouse space, and staff time. They can adversely affect the regional economy by competing with similar commodities available locally. And GIK can contribute to negative images of the United States and its disaster response activities. Despite these problems, USAID often faces significant pressure to assist with or fund shipments of GIK to disaster settings. (Emphasis mine)
I think there is a possible analogy to volunteering. Charities have an incentive – and perhaps also pressure – to accommodate people asking them to give in-kind donations. (We’ve even seen a little of it ourselves; despite the abstractness of our own activities, people come to us asking where to donate leftover drugs or equipment, and it’s never fun to reply with “tough luck.”)
Giving away your goods feels better than taking my above suggestion, because it doesn’t force you to confront the difference between what you paid for the goods and what they’re now worth. (Giving away an old shirt feels better than selling it for $1.) And plenty of organizations are interested in delivering these good feelings. There may also be organizations that simply deliver gifts-in-kind without carefully weighing the shipping costs, logistics issues, etc.
We’ve noted before that much of charity seems set up to serve the donor rather than the recipient. Consider this next time you’re about to give old clothes to people who may not have asked for them (even if it’s through a charity that’s claiming they have).
- Companies/producers can have reasons, relating to price discrimination, to donate the the things they produce. These reasons can apply to a drug company donating drugs, but not to an individual giving away old belongings, so I won’t elaborate on this point here.
- Sometimes there is an excellent match between what you have to offer and what someone else needs, to the point where (a) the person in need would be close to the highest bidder to buy it; (b) selling rather than donating would create unnecessary middleman/friction costs. (Analogy: if a friend is willing to pay $250 for an old computer that’s worth $300, I’ll take the friend’s offer instead of going through the hassle of selling. On the other hand, if the friend is only willing to pay $50, I’ll sell the computer.)
- There can be tax advantages to in-kind donations.