Who needs in-kind donations more: the recipients or the givers?

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.

Good Intentions are Not Enough points to a USAID statement on gifts in kind (PDF). I think it’s an eye-opener, particularly this part:

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).


*For example:

  • 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.

Comments

Who needs in-kind donations more: the recipients or the givers? — 7 Comments

  1. Yeah, I actually think it is more complicated than that.

    Sticking with the used clothing thing, in a British context the clothing is collected and exported because there is demand for it. When it is baled here, it becomes a commodity for which local charities recieve a commission per tonne before is sent to distributors in Africa.

    Bizarrely this may eventually be sold to Africans at a price higher than they originally cost. Such is the ridiculousness of international Fast Fashion.

    Of course, I’m not sure whether you would actually describe this as ‘in-kind’ donations, but then maybe the definition depends on why the people are donating. I suspect a strong factor for most people is disposing of their waste clothing as much as the potential benefit to the charity or even people they imagine have no clothing.

    Does that make it good? No, there is obvious destruction of local manufacturing industries and it is a bit sick to imagine all of western society using Africa as a sink for obsession with fashion. On the other hand, I’d say the SHC market is a better way to distribute clothing than handing it out.

  2. I agree with the discussion of in-kind donations. Many times the items donated to Goodwill are not particularly useful to anyone who uses this service. However, the point of a charitable donation is that you no longer need the item(s), but someone else might. It’s all based on potential need, and not actual demand.

    There are, however, other ways to donate items/money to worthy charities. Specific causes, such as Mercy Corps and Africa Bridge, accept direct in-kind donations of certain items. These are then distributed to people who are in real need and could really use the help.

    Another way to help these (and more) organizations, without having to do very much, is through the online shopping portal for charity, CafeGive. All someone has to do is visit http://cafegive.com, choose their favorite cause from a list of over 40, and proceed to shop at one of our over 250 merchants such as Best Buy and Target.com. A percentage of every purchase goes toward the chosen charity and the shopper has to nothing extra. It’s an easy way to give back to some worthy causes which are doing some real good in the world. Want to feel good about the online shopping you already do? Give CafeGive a try.

  3. While I agree with most of what was written here,
    I have to put in a plug for targeted in-kind donations, especially in relief situations. The main thing is targeted. If I’m on the ground and I need a specific item in a specific quantity, it’s often the perfect donation to just fill my order and send it to me.
    Saves me money and time and gives you the feeling of having directly contributed to something that was really a need.
    As for old clothes, I agree. I’ve personally seen an entire parking lot, covered with used clothes (not baled or sorted) that were simply dumped, by the truckload, onto the parking lot.
    people rooted through them for a while, but this was post-katrina, and few people were so desperate as to wade through clothes, some of which were filled with excrement or needles. so they got rained on, started molding, and a few weeks got trucked away as trash. that was when i told all my friends back home not to send clothes to disaster zones.

  4. Joe: That’s fine, but what you’re describing is a fund-raising business for NGOs, not a development activity. It’s akin to all those charities in Britain who used to get volunteers to collect old newspapers, which were then sold as raw material to paper recycling plants.

    Holden: I think your post doesn’t go far enough in opposing the free T-shirts idea. Even if (1) T-shirts could cost-effectively be donated, shipped and distributed in developing countries, and (2) the T-shirts were wanted by potential recipients, that still doesn’t make it a good thing to do. It’s likely that dumping large numbers of free T-shirts could damage the income of local clothing retailers (as well as manufacturers, if there are any), and so put people out of work. This is mentioned in passing in the above quotation from USAID, but seems to me to be the nub of the issue.

    This isn’t just a theoretical possibility. I am told that Haiti had thriving textile and tailoring industries until large numbers of clothes (known in the country as “Kennedys”) were donated by the US government for hurricane relief in the 1960s. Nowadays, basically the only clothes available for sale in the country are used clothes from the US.

  5. This is from the perspective of international aid, and even though I do not work in that type of nonprofit, I think there is a really big disconnect between what people in the US view as “a good thing to donate” and what is actually needed. Most depressing of all, I have experienced for years the type of “giving” programs encouraged by many local religious organizations, clubs and schools. Some people think it’s fine to box up trash and send it overseas – and it’s shocking that nobody suggests, “If it is trash here and not usable, why is it usable in the area where a disaster has occurred?” As has been mentioned, irretrievably soiled clothing, contaminated items, or broken and unusable items – it’s like shipping the landfill. Saddest of all are the dirty, broken and useless toys donated to “poor children.” Whenever I have spoken to school classes, I’ve always acknowledged the fact that they care and are thinking of others who could be very far around the world, and who need food, water, and a safe place to live, go to school, cook and sleep. Then I pick out the grungiest, most repulsive dirty toy and ask them how they’d feel if they had one birthday present, and they opened it up, and this was inside. It has worked . . . now, I think we all need to do this type of one-on-one asking people to step back and think. A $1 donation can buy clean water, go toward purification equipment, or buy food or help ship local, fresh food. Have a clue!

  6. Joe, what you are describing sounds something like the “Goodwill” model. I agree with you that it seems superior (for most cases) to simply handing out donated goods; my critique was directed specifically at the latter.

    Joe and Rob, you both emphasize the potential undermining of local industry by donated goods. I think this is a very valid concern. The first part of the post was intended as a very general critique of gifts in kind, not a comprehensive list of the ways in which they can be harmful. However, the USAID quote in the second part of the post does give a pretty good list, and includes the concern about undermining local industry.

    Mischa, I agree that gifts in kind can be a good thing when they originate with a specific local need. The second bullet point in my footnote was intended to include such a situation.

  7. Dear All,

    Thanks Holden for sharing all this. I have been working in about 25 different countries about the world. A lot of them were in Africa. I visited several African countries as well. I can tell you, that nothing is more welcome than money. T-Shirts and other gifts will not solve the daily probels of very poor people, and even in Africa, most people can afford cloths, a phone and food. Still, they are very poor, and poverty is everywhere. However, my impression is, that money used for education is the best thing you can do. Education is the key out of poverty.