The case for international giving: An Australian example
Australians have a strong track record as one of the world’s most generous people. In 2020, the crowdfunding platform GoFundMe ranked them among the top five givers in the world. And that number is rising. In 2018, Australians donated AU$3.75 billion to various causes – up eight percent or AU$265 million from the previous year.
However, most of those good intentions and donations seem to be staying within Australia. A 2020 report shows that just 5% of Australians said they only or prefer to support organisations overseas.
Australia also lags behind other similarly wealthy nations. For every AU$100 the Australian government spends, a mere 21 cents goes to foreign aid. The UK gives 3 times more, spending about 70 cents for every AU$100. Australia also falls behind Sweden, the Netherlands, and Germany.
The disparity matters because cross-border giving could significantly accelerate progress against global poverty, particularly in the Asia-Pacific region. According to the UN, an estimated 400 million people in the region live in extreme poverty: below US$1.90 a day. At the international poverty line of US$3.20 a day, the number rises to 1.2 billion people. The COVID-19 pandemic, meanwhile, is also expected to undo years of progress against poverty in the region and drag millions more into poverty.
Poverty looks and feels different in developed countries versus developing countries. In Australia, the poverty line is AU$457 a week for a single adult or AU$960 for a couple with two children. Most receive social security.
Yet in Nepal, about 30% of the population live on US$1.90 to US$3.20 a day. Without a government safety net, the poor rely on private charities to help them meet their basic needs and improve their chances of escaping poverty. This disparity creates enormous opportunities for making an impact. But it requires changing the way we give.
“Far away is where the vast majority of the extremely poor are, and where charitable dollars can go the farthest”, writes Peter Singer, the Australian moral philosopher and author of The Life You Can Save. “Those of us living in industrialised countries have greater capacity to help those far away”.
We all know that the need is greater overseas. What many donors don’t realise is that the solutions are also cheaper and small donations can make a huge difference. As just one example: A woman in the Philippines is 27 times more likely to die during childbirth than a woman giving birth in Australia. Yet ensuring a safe birth costs US$300 to US$400—less than one third the cost in Australia of AU$11,000 to AU$12,000.
Giving to an overseas charity can also be a more rewarding experience for the donor. It’s hard to be a top 10 donor to the Sydney Opera House. But support a local charity in Thailand or Cambodia, and you can speak directly with the executive director, have a tour or even have a legacy benefit in your name.
However, cross-border giving does come with some challenges. Charities in developing countries don’t have the same regulatory requirements, making it difficult to know which organisations to trust. Donors also can’t get tax benefits by giving directly to an overseas organisation.
To avoid these pitfalls, donors can work with a local not-for-profit that specialises in international giving. This not only enables tax benefits in many countries, but also helps ensure your donation goes to genuine causes and organisations, and won’t go to waste.
The United Nations Millennium Development Goals has a target for developed countries to spend 0.7 percent of their gross national income on foreign aid. Only five countries achieved this goal in 2014, these included Denmark, Luxembourg, Norway, Sweden and the United Kingdom. Other countries, such as Germany and Australia are only halfway there.
With millions suffering from the economic impacts of COVID-19, there has never been a better time to give. For those of us in wealthier countries, by looking overseas, we can help many times more people, for the same cost, than what we could do at home.
Anita Toy is the Chief Representative of Give2Asia Australia, a DGR-registered not-for-profit that helps Australians support overseas charities and causes. Learn more about her work at https://give2asia.org.au