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Advantages
of Cash Donations
Financial contributions
allow professional relief organizations to provide much needed, culturally
appropriate assistance to disaster victims in a timely, efficient manner
that supports the local economy.
When deciding between making
a financial donation or donating materials, keep in mind the following
reasons why cash is often preferred.
Five Reasons
Why Cash Is Best
1. Needs-Based Procurement:
Cash allows disaster relief professionals to procure exactly what is needed
in a disaster situation.
The donating public usually
does not have access to a professional and accurate evaluation
of victims’ needs. Often, lists of needed goods found in the media
are based on incorrect assumptions or faulty assessments. In addition,
these lists are often not specific enough to be useful. Even if a good
list is used, donors have no way of knowing who else will be making similar
donations. A well-meaning public may unintentionally donate materials
that are already available at the disaster site or to meet needs that
the disaster did not create.
Cash contributions allow disaster
relief professionals and the affected people themselves to purchase exactly
what is needed in the right quantities. Cash contributions, in other words,
allow for disaster relief to be demand-driven (based on victims’
needs) rather than supply-driven (based on what goods have been donated).
2. Efficient Delivery:
Cash is the most efficient donation because it does not use up scarce
resources and because it can be transferred very quickly.
Because relief supplies can
almost always be purchased at or near the site of a disaster, relief professionals
prefer to purchase them locally. This frees up transportation routes,
staff time, warehouse space, and other crucial commodities which are in
very short supply during a disaster. Items purchased locally can also
be delivered to those in need more quickly than material donations.
3. Lower Costs: Cash
donations do not require transportation costs, which can outweigh the
value of materials donated.
The cost to sort, package,
and transport individual, material donations to disaster victims is often
greater than the cost of purchasing the items locally. And unlike donated
materials, cash donations entail no transportation cost. When a disaster
strikes a poor country, it is very important to make every dollar stretch
as far as possible. Purchasing relief supplies locally is one way of stretching
that dollar.
4. Economic Support:
Cash supports the economy of the disaster-stricken region.
When relief supplies are purchased
locally, cash is pumped quickly back into an economy that desperately
needs it. This is why relief professionals try to use local market structures
(vendors, shippers, etc) to distribute aid whenever possible. The long-term
goal after any disaster is to return people to self-sufficiency. Disaster
assistance efforts that support local markets contribute to this goal.
While cash donations support
a local economy, inappropriate material donations may have the opposite
effect. Material donations may compete with local vendors who are selling
similar items. Recipient governments often have to pay significant costs
to unload, transport, and distribute donated material. If unusable by
the local population, the country may also have to pay for destroying
the donations.
5. Cultural and Environmental
Appropriateness: Cash donations can be used to purchase supplies that
are appropriate to the local culture and environment.
There are many cultural and
environmental factors to consider when providing disaster relief, and
the American public may be unfamiliar with the local climate, culture,
and tastes. For example, clothing must be suitable to the local climate
and to religious, social, and political sensibilities. Food must be familiar
to the affected people and fit within their overall consumption patterns.
Equipment requiring electricity must have the right voltage (if, indeed,
there is electricity at all).
These are but a few examples
of the complex issues inherent in aid delivery. Disaster relief professionals
are trained to understand these complexities and usually have the advantage
of years of experience in a particular region. Cash donations can be used
by professionals to purchase supplies that fit within the wider context
of social, religious, political, and environmental issues.
When inundated with used
clothing and blankets, relief agencies spend tremendous resources on washing,
disinfecting, sorting, packing, and shipping. (Do Something: Your Kit
to Help You Get Involved, Adventist Development and Relief Agency)
Because communities hit
by disasters generally experience significant economic loss, buying goods
locally also helps to stimulate the weakened economy by pumping money
back into area businesses. (Gifts of Goods & Services for Disaster
Relief, American Red Cross)
Cash donations to experienced
disaster relief voluntary agencies enables them to purchase exactly what
is most needed by the victims and helps the local economy recover from
the disaster too. (Cash Donations for Hurricane Victims Best Way to
Help, Federal Emerency Management Agency, September 23, 1998)
Return
to Guide to Appropriate Giving
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