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Published:May 25th, 2007 06:03 EST
Largest Donor of Foreign Aid is The U.S.

Largest Donor of Foreign Aid is The U.S.

By SOP newswire

Washington — The United States is the single largest donor of foreign economic aid, but, unlike many other developed nations, Americans prefer to donate their money through the private sector, according to a new report published by a Washington research organization.

Of the $122.8 billion of foreign aid provided by Americans in 2005 (the most current data available), $95.5 billion, or 79 percent, came from private foundations, corporations, voluntary organizations, universities, religious organizations and individuals, says the annual Index of Global Philanthropy.

The index was issued May 24 by the Center for Global Prosperity at the Hudson Institute, a Washington-based nonpartisan research organization.

“It isn’t like in the 1950s when the Marshall Plan and government flows dominated our economic engagement with the developing world,” said Carol A. Adelman, the director of the Center for Global Prosperity. She spoke May 24 at the launching of the report.

For example, U.S. foundations gave more  -- in money, time, goods and expertise -- than 11 of the 22 developed-country governments each gave in 2005,  and U.S. private voluntary organizations totaled more than the governments of Japan, the United Kingdom, Germany and France each.

More than half of all U.S. assistance to developing countries, $61.7 billion, came in the form of private remittances by individuals living in the United States to their families abroad, the report says. According to the report, those remittances not only reduce poverty, but, in some cases, increase creditworthiness of countries and underwrite their trade imbalances.

PRIVATE GENEROSITY

The scope of U.S. private giving often is overlooked in statistics that compare the relative generosity of various countries, the authors of the report say. Most of the other developed countries deliver their international aid primarily through official development aid programs run and financed by government agencies.

U.S. official development assistance (ODA) in 2005 was $28 billion, the largest of all official donations by an individual country. But, according to the often-quoted measure used by the Organization for Economic Cooperation and Development, which compares government aid as a percentage of a country’s gross national income (GNI), U.S. government aid is only 0.22 percent of GNI, which ranks the United States as the 20th of the 22 listed donor states.

Index of Global Philanthropy combines all aid from developed countries – government and private – an approach that its authors say is a more accurate measure of a nation’s generosity. According to the index, the United States is the top donor in absolute amounts and the seventh of 22 in terms of GNI percentage.

“This shouldn’t be a numbers game, but since it always is, since people always are comparing numbers, let them look at what is going on in developing countries. Just looking at government aid flows is not going to help us understand … what are the best practices, what are the success stories,” Adelman said.

QUALITY, NOT QUANTITY

For example, the report lists several case studies of private programs using skilled volunteers and delivering hands-on assistance at a third of the typical cost of government aid programs.

In addition, according to the Index, private aid usually involves more people-to-people contact and more transfer of expertise, thus creating a more genuine partnership between the helpers and the poor.

One of the case studies in the Index cites a $150 million AIDS prevention and treatment program for Africa launched by Bristol-Myers Squibb Foundation (B-MS). Together with Baylor College of Medicine, B-MS built the first pediatric AIDS hospital in Gabarone, Botswana, and trained African doctors through its Pediatric AIDS Corps volunteer program.

Most data on development aid also neglect those forms of foreign help that do not fall within the traditional notion of “aid programs,” such as foreign scholarships offered by U.S. universities, research and development that benefit the poor, special lending and insurance programs, and direct investment, say the authors of the report. 

In 2005, loans and investment by U.S. companies to the developing world totaled $69.2 billion, according to the index.  

Adelman said data on some of the less traditional forms of international aid, like personal remittances or help in goods and time, still are scarce and hard to obtain but the growing diversity of aid flows needs to be studied to see what really works.

”If nothing else, we need to learn about what is going on in this area so we can see what is the engine that is driving the economies in the developing world,” she said.

By Jaroslaw Anders
USINFO Staff Writer