Monday, October 1, 2012

The negative impact of donations on economic stability

Resilient and appropriate economic development is lacking in certain parts of the world. In an effort to fill this void, many well-meaning individuals seek to provide impoverished areas with in-kind donations—goods and services given freely which could be given cash values. Often, such methods of giving do more to suppress the economic growth of targeted areas than they do to help. 

It is essential to consider the effects of economic interactions involving the poor to ensure that more harm than good isn’t being done to those in need. The desire to help is commendable, but in-kind donations are not the best ways to make a positive impact. By injecting outside goods at prices which undercut local merchants, TOMS and similar donation schemes prevent these sellers from earning a living and helping build their local economy from the ground up, stifling the organic growth these communities so desperately need.

Above is an excerpt of a brief and thoughtful article written by Kevin Laughlin for Makeshift Magazine outlining the issue of assistance.