American generosity

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Days after the Boxing Day tsunami in December 2004, after the United States government pledged $15 million in aid, United Nations Relief Coordinator Jan Egeland reproached the United States and other rich countries for being "stingy" with foreign aid in general. Soon afterward, as the extent of the damage became clearer, the U.S. government pledged $350 million. In addition, U.S. military forces provided an amazing amount of aid to tsunami victims, at a cost that has not been tallied. Still, Egeland's charge that the United States is "stingy" continues to be the conventional wisdom in many quarters. Scandinavians like Egeland point out that U.S. government foreign aid as a percentage of gross domestic product is well below that of some advanced countries, notably some in Scandinavia.

Of course the U.S. government's spending on foreign aid continues to be much larger in absolute terms than that of any other nation.

But government spending is not the full measure of aid. Carol Adelman, head of the Hudson Institute's Center for Global Prosperity, has been tracking the total amount of aid—not just from government but from foundations, charities, corporations, and individuals. Naturally, the numbers are not as easily tallied as the metrics of government spending. But the total is very much greater. Here's her latest report on how the United States shares its bounty with those in need.

Here are some excerpts:

Hudson Institute research tallied over $35 billion in private foreign aid for 2000 (the last year such figures were tabulated). That's three and one-half times U.S. government aid for that year. And even this large amount low-balls American contributions abroad, as it does not include giving by local U.S. churches or donations by overseas affiliates of U.S. corporations.

The common measure used by the U.N. and European countries–the percent of gross national income used for foreign aid–counts only government foreign aid. It does not fully take into account private giving for those in need abroad. This "donor performance measure" may have been appropriate when established in the 1950s, but it is outmoded today. For it omits the overwhelming growth in international private philanthropy.

The 2004 Foundation Center publication, International Grantmaking III, reports that international foundation giving grew much faster than overall giving between 1998 and 2002. The share of dollars for international causes has also risen to 14 percent of total foundation giving, up from 11 percent in 1998. The funding outlook for U.S. foundation giving remains strong, and half of all American corporate givers plan increases.

Adelman reports that American private contributions to charitable relief totaled at least $324 million, with many religious and other organizations' contributions not included. And she makes the case for private giving:

In essence, foreign aid is privatizing–just as transportation, energy and telecommunications have been privatized in many parts of the world. As economic growth has increased in developing nations, so have local charities, business philanthropy and community foundations.

There is a lot to say for private giving. For too long, commitment to the poor abroad has been measured by how much is spent, rather than how well. Private giving is usually faster, more nimble, more direct and accountable. It uses less overhead than expensive government consultants, and can better avoid interference by corrupt officials in countries afflicted by natural disasters, such as tsunamis and earthquakes.

By needing to raise their own funds and volunteers, private philanthropy stands a kind of market test, which is not required by unelected government and international bureaucrats.

Europeans like Egeland continue to focus on the statist model: Only governments can provide aid. And they measure generosity by the degree to which governments compel their citizens to pay taxes whose proceeds elected officials and civil servants can then disburse. But statist thinking is outmoded. Half a century ago, after the recent experiences of the economic collapse of the 1930s and the governmental success story of World War II, it was widely assumed that only government could marshal the resources needed for, among other things, disaster relief. Now we know, or should know, better. As Carol Adelman puts it:

The outdated measure of government aid as a percent of its gross national income omits other factors critical to development abroad. For instance, the United States has long provided the most foreign direct investment in developing countries, which creates long-term and sustainable development. America provides the bulk of the world's R&D, which saves millions of lives in poor countries through improvements in food and medicines. And, of course, our military presence abroad helps provide the stability so essential to economic growth and democracy.

Using the right measures–which include these factors, as well as the staggering amounts of private giving–shows that Americans are a most generous people. Rather than pointing fingers at America, the United Nations, Europeans and international organizations should hold hands with private donors and focus on getting the job done.