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Carol Adelman on Stinginess Debate

Carol Adelman

In the immediate aftermath of the tsunami disaster that struck countries around the Indian Ocean, there was criticism aimed at Western governments for being “stingy” with foreign aid. One commentator who took exception was Carol C. Adelman, a Senior Fellow at the Hudson Institute and former head of USAID’s programs for Asia, the Middle East and Central and Eastern Europe. Writing in The New York Times on January 4, Adelman argued, as she frequently does in public forums, that this perception stemmed from a failure to properly credit the vast amount of private philanthropy engendered by Americans. OIP spoke with Dr. Adelman on this and related topics.

OIP: In responding to this massive disaster, perhaps unprecedented in terms of geographic extent, loss of life, public health impact and long-term devastation, do any “best practices” apply, or is it really a scramble to get relief out ASAP?

CA: Well, no one ever wants to be quoted recommending a “scramble” but often it is that, just because the large donor agencies, including the governments, UNDP, UNHCR, UNICEF and others, had to take time to assess the need and get the response organized. The financial commitment would be large scale, so they had to understand the situation. That’s what led to the US saying the initial contribution was only $15 million. That was only to assess the need. But it was a communications/PR mistake, which everyone jumped on.

But I guess it is a scramble in a good way: the local groups and larger US PVOs had people on the spot, so there were early stories that impressed me, such as the CARE official in Sri Lanka who could just pay cash to give 8,000 people a day’s food and provide water purification supplies and sleeping mats for 500 families—on the very day of the earthquake. In the same way, when I started with USAID, the Armenian earthquake occurred and Project Hope had doctors on the scene the next day.

Because such organizations as CARE, Catholic Relief Services, and others have pre-positioned supplies, they can move pretty quickly. My general philosophy is that private groups can act more nimbly and quickly than government aid can.

OIP: In this case, wasn’t the government really geared up to respond quickly? I’m thinking of the way military helicopters played a key role in getting supplies to hard-to-reach areas.

CA: Yes, that is the exception. The US military is trained for this, they are really geared to do this type of crisis response. Look at their work in Bosnia-Herzegovina, East Timor, and Hurricane Mitch, for example. They’ve got these skills down and nobody is better at responding quickly and getting on the scene as well.

There’s a new trend I want to talk about, which we’re seeing in India and Sri Lanka: the middle class responded to the tsunami disaster. Individuals with new wealth didn’t want to give supplies to the government to distribute; they didn’t trust their government. They wanted to hand out the relief aid themselves. They feel that as wealthier countries they can handle this themselves, and don’t have a practice of accepting foreign aid. With their growing economy, private giving and private charities can be expected to increase in the future.

OIP: You talk about private aid being undervalued. Aren’t there also questions, though, about the need for greater accountability? To be able to show what is being achieved, not just what is spent. And how can it be accurately measured?

CA: That’s a very important topic. There’s a big difference between being measured and regulated. Many in private philanthropy would feel more should be done to evaluate what is accomplished and look at results.

The measurement issue is huge. Private giving is not measured—and until it is measured, it will be undervalued. I did a research project for USAID Administrator Andrew Natsios. Over the course of a year, I and a few researchers discovered that measurement of private philanthropy is not being done in a single place. Independent Sector did a survey, where they reported percentages—but it was unclear what the base is, so that’s not a helpful measure. And corporate giving, as well as things like university philanthropy, such as providing scholarships, are not captured.

When the OECD (Organization for Economic Cooperation and Development) issues reports on each country’s aid, there’s one small column in their reporting—“Grants by NGOs.” The number they report is the number that foundations and PVOs report to the US Government. But those reports are only provided if they raise above $25,000, which leaves out many small organizations. And it does not look at corporate donations. Most underestimated is giving through religious organizations. Since they are not 501 c 3 organizations, I found nothing when I looked into their figures. The one number I found, $3.4 billion, came from a survey of Canadian and US Christian ministries overseas. But there, no Mormons, Jewish institutions or others were counted. And many smaller religious charitable programs never get counted: look at how many congregations will do things like adopt a clinic in Guatemala, for example, and that doesn’t get counted anywhere.

Once, I did a presentation on private giving data to the OECD. They listened politely, then the first question they asked was, “ If private giving is going on out there, how do we regulate it?” I said “That’s not your job—it’s demand driven. There’s nothing wrong with competition. It’s measured by the market test: can it raise private funds and volunteer time?”

With government aid, when a democratically elected government fails the market test, it’s a slower process—and it requires a free press. If the government is misusing aid funds, it takes time to throw the leaders out. Private philanthropy has less corruption and more efficiency.

So what I said to the OECD was, you shouldn’t look at private aid as a threat to you—there will always be need, especially in disaster relief, as we’ve seen this week. But, because the world has changed, you should turn your attention to measurement ; that’s where you would do well to focus. Fundamentally, Europe and the UN see private giving as not in their best interests, as it goes against getting more aid.

OIP: If you look at your argument, then, that greater weight should be given to private philanthropy, is the logical extension that government aid should be reduced?

CA: Yes, I think the ultimate consequence of what we want to see in foreign aid and private philanthropy for relief and development, is that as a natural consequence, as countries develop good local relief programs of their own and as private philanthropy goes up, government aid goes down. It’s a good thing, a natural evolution. And the ways we can help that are for us to work with overseas corporations, get them to set up matching gift funds, foundations, vehicles for private giving, with independent boards.

OIP: As we look at the humanitarian response to last week’s disaster, are there any other points you would stress?

CA: The most important component of this “stinginess” debate is the need to understand that compassion is the work of a nation, not just a government. That is an important message to try to get across. In America, we have had a longstanding tradition of private giving, as observed by de Tocqueville in the 1830’s. We give abroad the same way we give domestically. When I speak to European countries and international organizations, I tell them, you can leverage that government aid by changing your practices, tax structure and so on to encourage more private giving. The Netherlands, for example, has undertaken an entire review of its foreign aid program. It may become a model of one that is much more private sector oriented.


References

The New York Times, January 4 2005, “A High Quality of Mercy,” Carol Adelman

Foreign Affairs, November 1, 2003, “The Privatization of Foreign Aid,” Carol Adelman

Foreign Aid in the National Interest, 2002, U.S. Agency for International Development, Andrew Natsios, Administrator

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