Do It Yourself Philanthropy of Remittance
Last summer my brother and his friend were walking home after a long day’s work and they were approached by a peer to peer fundraiser in downtown Toronto, might I add one of the many that we get inundated with throughout the year. He asked them if they would consider sponsoring a child in Sub Saharan Africa through a monthly giving program. Keep in mind that both my brother and his friend are both originally from West Africa. So they looked at each other, laughed and said “Sorry we are both sponsoring children in Africa on a monthly basis…”, the fundraiser was pleased with that answer and thanked them for their efforts. If the fundraiser, delved deeper he would have found that this form of philanthropy is more of remittance and not rooted in the conventional form of giving through a registered charity. Remittance is when a foreign worker transfers money privately to individuals in their country of origin.
Later that evening my brother told me the story and we had a long conversation about this experience. You see, I came to Canada over 15 years ago from a small West African Nation where 48.4% of the population lives in poverty(1). People like me, my brother and his friend sponsor our families or neighbors sometimes weekly, monthly or simply when the need arises. We don’t rely on World Vision or other like minded charities to distribute our donations because we believe we know where it is needed the most. In fact the 2013 Index of Global Philanthropy and Remittances states that over 80 percent of all development assistance with the developing world is through private financial flow; through Corporations, Foundations, private investments and remittance. Through research they found that remittances continues to rise along with other private financial flows and in the United States alone they are actually three times greater than government assistance(2). Therefore, it’s important to keep this in mind when we are targeting certain demographics that might still have ties to their country of origin.
This may be a band-aid solution and it could continue to create a culture of dependency. I cannot be certain that the money I send really tackles the root cause of the problem and I do sometimes wonder if the programs which registered charities fund in places like Africa, are more beneficial in the long term than my short time financial fix. However, to me, the reality is that there are more pressing matters; housing costs, education or healthcare, that remittance helps solve when immigrants, like me, send money privately due to our personal connection and understanding within the society(ies). Remittances in some of Africa’s poorest nations account for 20 percent of their GDP(3). In certain communities it has improved infrastructure and provided basic necessities overnight, and this instant transfer of funds is what communities in need rely on daily.
Thus, it brings me back to the topic at hand. How do charities, specifically International NGOs (Non-governmental organizations) speak to donors who already have ties to the developing world? Especially those donors who feel they would be wasting their time and money sending a cheque in the mail, or signing up for a monthly program? Development of policies that consider diversity and inclusion in fundraising efforts is integral in these cases. I attended AFP Toronto’s Congress this year and had the privilege of sitting in on many sessions that focused on storytelling and communication with donors in order to raise more funds. Although, the presentations were insightful, and addressed the importance of storytelling to build a connection, there was never a mention of understanding the role that global migration is playing in changing the face of philanthropy. The 2011 National Household Survey showed that Canada was home to over 6 million immigrants, and like me, most would have ties to their country of origin(4). This means that all charities are at the risk of losing support from these communities. According to the 2012 World Bank Statistics report on remittance, it is estimated that $24 Billion in remittance left Canada and this did not include unofficial numbers(5).
In Dambisa Moyo’s book, Dead Aid, she highlights the importance of development agencies to work with their local and international governments in order to reduce the transfer costs (“taxation”) of these financial flows. She explains that in the United States “For every US$100 sent to Africa, only US$80 gets there – the middleman takes the rest”. This higher taxation costs are a worldwide problem and actually discourages remitters in sending more money. In another remedy to help ease the burden, she suggests developing innovative technology to cheapen and hasten the speed at which people send and receive money. This has proven to be successful in Kenya when a mobile phone based transfer system, M-Pesa, was setup to give people the ability to transfer huge sums of money privately. Although, this was a local initiative it could also be applied globally.
However, the most important approach to consider when building a fundraising strategy is knowing your targeted donor audience, having a conversation, understanding their priorities, and what motivates them. Then instead of “reinventing the wheel” with more mindless approaches to fundraising, the charity world should look to leverage support and ideas from these demographics who are already actively engaged in their own “do it yourself” form of philanthropy. The fact of the matter is charities should not turn a blind eye. It may have its caveats but remittance will continue to fuel the economies of developing countries. It would also help if the organization ensured diversity in the key decision makers who are implementing these strategies in order to ensure a deeper understanding and engagement.
- http://data.worldbank.org/country/gambia (2015).
- http://www.hudson.org/content/researchattachments/attachment/1229/2013_indexof_global_philanthropyand_remittances.pdf (2013), 5.
- http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1288990760745/MigrationandDevelopmentBrief24.pdf (April 13, 2015), 23.
- http://www12.statcan.gc.ca/census-recensement/index-eng.cfm (May, 2011).
- http://www.thestar.com/news/world/2014/06/20/24b_left_canada_in_2012_heres_what_happened_to_it.html (June 20, 2014)