U.S. foreign aid from private sources totaled $71.2 billion in 2004, a sum more than 3 times greater than the foreign aid the U.S. government provided that year, according to a study by the Hudson Institute.
“America is often criticized as being stingy in its foreign aid, but that assessment doesn’t take into account the extent of private giving,” the institute said.
The study, titled Index of Global Philanthropy, was presented yesterday at a United Nations conference.
Officials of the Hudson Institute, a research center that studies public policy issues, say this is the first comprehensive report to detail the sources and magnitude of American private giving abroad.
“What struck me working on this first Index was the explosion in the number of nongovernmental organizations that promote entrepreneurship by helping start-up businesses with training and acquiring venture capita. Traditional international grantmakers … are now joined by multinational companies, business schools, investment bankers, and new foundations in finding new ways to help poor people prosper,” said Carol C. Adelman, director of the Hudson Institute’s Center for Global Prosperity, in an introduction.
She noted that charitable organizations, such as CARE, Save the Children, Catholic Relief Services, and World Vision, “have new colleagues who are experimenting with online giving to overseas projects, cutting out middlemen and expensive overhead and striving for maximum transparency and accountability.”
Support from foundations, charities, corporations and religious groups accounts for only a third of all the private donations made abroad. The other two-thirds comes from immigrants living in this country, who send money home.
The study says “massive amounts of money are sent home by immigrants and temporary workers” either individually or collectively through hundreds of so-called hometown associations throughout the U.S.
Contrary to the progress that’s been made through private giving in “helping the poor achieve prosperity,” the report cited a series of different studies that found official foreign aid has neither increased economic growth nor reduced poverty in poor foreign countries.
While the Organization of Economic Cooperation and Development, a Paris-based group of industrialized donor nations that sets foreign giving “targets” for each country, has said the U.S. government should provide 0.7 percent of its gross domestic product for the poor abroad, the U.S. provided $21.3 billion in 2004, or 0.17 percent of its GDP.
But combined with the private foreign aid that year, U.S. foreign aid to poor countries approached the 0.7 percent “target.”
The Hudson Institute says it is not realistic to expect governmental foreign aid to reach those levels. Even if it happened, the institute said, “It would not solve the problem nor could many developing countries deal effectively with such a surge.”
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