Don't Donate Money to Japan

Individuals are doing it, banks are doing it — faced with the horrific news and pictures from Japan, everybody wants to do something, and the obvious thing to do is to donate money to some relief fund or other.

Please don’t.

We went through this after the Haiti earthquake, and all of the arguments which applied there apply to Japan as well. Earmarking funds is a really good way of hobbling relief organizations and ensuring that they have to leave large piles of money unspent in one place while facing urgent needs in other places. And as Matthew Bishop and Michael Green said last year, we are all better at responding to human suffering caused by dramatic, telegenic emergencies than to the much greater loss of life from ongoing hunger, disease and conflict. That often results in a mess of uncoordinated NGOs parachuting in to emergency areas with lots of good intentions, where a strategic official sector response would be much more effective. Meanwhile, the smaller and less visible emergencies where NGOs can do the most good are left unfunded.

In the specific case of Japan, there’s all the more reason not to donate money. Japan is a wealthy country which is responding to the disaster, among other things, by printing hundreds of billions of dollars’ worth of new money. Money is not the bottleneck here: if money is needed, Japan can raise it. On top of that, it’s still extremely unclear how or where organizations like globalgiving intend on spending the money that they’re currently raising for Japan — so far we’re just told that the money “will help survivors and victims get necessary services,” which is basically code for “we have no idea what we’re going to do with the money, but we’ll probably think of something.”

Globalgiving, it’s worth pointing out, was created to support “projects in the developing world,” where lack of money is much more of a problem than it is in Japan. I’m not at all convinced that the globalgiving model can or should be applied directly to Japan, without much if any thought about whether it’s the best way to address the issues there.

That said, it’s entirely possible that organizations like the Red Cross or Save the Children will find themselves with important and useful roles to play in Japan. It’s also certain that they have important and useful roles to play elsewhere. So do give money to them — and give generously! And give money to other NGOs, too, like Doctors Without Borders (MSF), which don’t jump on natural disasters and use them as opportunistic marketing devices. Just make sure it’s unrestricted. The official MSF position is exactly right:

The ability of MSF teams to provide rapid and targeted medical care to those most in need in more than 60 countries around the world "“ whether in the media spotlight or not "“ depends on the generous general contributions of our donors worldwide. For this reason, MSF does not issue appeals for support for specific emergencies and this is why we do not include an area to specify a donation purpose on our on-line donation form. MSF would not have been able to act so swiftly in response to the emergency in Haiti, as an example, if not for the ongoing general support from our donors. So we always ask our supporters to consider making an unrestricted contribution.

I’ve just donated $400 in unrestricted funds to MSF. Some of it might go to Japan; all of it will go to areas where it’s sorely needed. I’d urge you to do the same, rather than try to target money at whichever disaster might be in the news today.

Update: Some bright spark has set up a “Socks for Japan” drive. I’m not making this up. I trust that none of my readers are silly enough to send socks to Japan, but this is a great indication of how wasteful a lot of well-intentioned giving can be.

Your point is well made, but many charities are now wise to the problem and specifically point out that overflow funds will be used as part of the general fund.

E.g. the British Red Cross appeal for the Christchuch earthquake says this:

“In the event that we receive more donations to the Japan Tsunami Appeal than the Japanese Red Cross and International Red Cross and Red Crescent Movement can reasonably and efficiently spend, any surplus funds will be used to help us prepare for and respond to humanitarian disasters both here in the UK and overseas. For more information visit http://www.redcross.org.uk“

Felix,

Does your boss Peter Peterson know Japan is “printing money”. Maybe he needs to go on an emergency mission go tell them they can’t do that!

Oh, wait, there’s no such thing as “printing money” with a fiat currency and a floating exchange rate.

Dear Felix,

perhaps you could explain the following to me, since I am by no means an expert in financial matters. Why are we to donate money to this or that NGO if Japan can just print that money ? Why would anyone donate for any one cause for that matter ? The only reason I can think of is that printing money actually costs a bit of … money. But since the central banks are so “generous” anyway, why should the population at large bother ? We can’t print money so we would actually give away value that can’t be replaced, unlike the banks which are only too happy to do so. I’m sorry but am I the only one trying to find an answer to this ?

Thank you!

Has anyone noticed the irony that Thomson Reuters is appealing for donations on behalf of the Red Cross for the Japan relief effort on its Twitter site?

Reminds me of September 12th, 2001 when people started donating food (perishable and otherwise) to NYC. I remember a photo of some relief worker with stacks of cookies around them. As if all the Duane Reades somehow disappeared.

Good intentions are not always smart intentions.

The help Japan needs is supplies of specialist search and rescue teams and equipment, not cash. It isn’t generally regarded a poor country – but then if the UK govt send overseas aid to countries with space programs and nuclear arms (India) then perhaps the world has turned upside down and socks are the solution…

The help Japan needs is supplies of specialist search and rescue teams and equipment, not cash. It isn’t generally regarded a poor country – but then if the UK govt send overseas aid to countries with space programs and nuclear arms (India) then perhaps the world has turned upside down and socks are the solution…

Only $400… you really are cheap. Where is your compassion?

Fire,

No central bank can “print money”. That disappeared with the gold standard.

Ideally all governments would be efficient and ethical with foreign aid. Since they are not, donating to something like MFS is one way to make a difference.

Hi Felix, My name is Kevin Conroy and I work for GlobalGiving.org. Thank you for raising these questions as we also agree it’s important to make sure that international aid, be it for a disaster or another cause, is done in an efficient, transparent manner.

GlobalGiving has a long history of raising funds for international disasters and disbursing them to high-impact organizations. For instance, here are all of the projects we supported after the Haiti earthquake. http://www.globalgiving.org/haiti-earthq uake/ As a part of our platform, we require all projects to post reports noting what we’ve done with the funds. You can read about the impact these projects had here: http://www.globalgiving.org/haiti-earthq uake-updates/

For Japan, we set up a fund to collect donations from the public and will be distributing those funds to a variety of organizations on the ground. As of this moment, these funds with go to International Medical Corp, Save the Children, and Mercy Corps and their partner Peace Winds Japan. We are also sourcing grassroots organizations in Japan that are NOT getting the same kind of media coverage that the Red Cross is getting. It is our goal to support community-based efforts around the world and provide transparent updates. We will be posting more details to our fund as they become available.

We are very happy to discuss this with anyone. Feel free to email me at kconroy@globalgiving.org or tweet at us at http://www.twitter.com/GlobalGiving.

Thanks, Kevin Conroy GlobalGiving

Indeed this comment is absolutely nonsensical. I thought a reuters blog would have people writing who would understand a little bit about what they write. 1) Japan is NOT printing any money at all. (That would lower the exchange rate and increase inflation and be overall very bad to the economy. On the contrary, Japan is buying yens abroad. If you see the yen has actually increased value. 2) I donate money to organizations like the Japanese red cross that give money to the people directly. No matter how rich the country, and in Japan the people don’t have that much money (specially if you lost everything, money is always needed. 3) Of course there are lots of crisis areas in the world. I donate to japan because i have a particular relationship to japan. 4) the text begins with do not donate money, and then the writes says he has donate money. I am not reading reuters blogs again, and i just bothered to go through the registration process because the article is revolting wrong.

I for one have no objection to charities like the Red Cross using the excess to ofset their own expenses. In order to donate money there has to be someone in that chair to take your money. Even if the person is free, the building, utilities, and insurance are not.This costs money. Japan is overwhelmed with needs right now such as food, water, potties, blankets, and medicine; the only way to get those items to them immediately is (you guessed it)money. So if Japans needs are met, then any excess can be put to the next disaster; where it occurs.

Felix Salmon, you irresponsible, self-righteous ass. I am looking at your blog post from the staffroom at a high school in Northern Japan. Your headline is extremely offensive.

Donate to the Red Cross and donate now:

http://www.google.com/crisisresponse/jap anquake2011.html

“Japan is a wealthy country which is responding to the disaster.” So no countries of this plant should have helped U.S during Katrina, is that right?

9600 of my country’s people haven’t eaten anything since Friday meanwhile you are drinking Starbucks coffee and rich fat food… You disgust me.

“Don't donate money to Japan” is a terrible thing to say. Obviously you have chosen the title of this article to get hits.

You’re basically saying don’t give them money, they are rich and can pay for everything. As if to suggest they can afford to rebuild everything back to the way it was.

If you actually did any research, you will find they are actually in debt by 200% of GDP. The only way the country could be described ‘rich’ is by it’s assets. I’m not sure if you noticed, but a fair chunk of those assets are now gone.

I can’t believe either the post or people’s response. The comments seem to indicate that people didn’t actually read the entire post, which indicates that donations are a positive, but donations earmarked to a specific target – “Japan-only” donations are not a good use of money.

On the other hand, most of the post is just begging for people to take offense. Seems awfully foolish to me. What could possibly be gained by offending people with inflammatory statements like this?

BOJ may tehnically not be printing money, but it’s announced a JPY 15 trillion liquidity injection, which has the exact same effects and is often nick-named money-printing in media. Effects of this will be, in the long run, a weakened yen. francisco8104 above said that this would be bad to the economy, but matter of the fact is that both the BOJ and the GOJ have been trying to lower the high yen rate since the Lehman shock, but have been unable to because of political pressure from abroad. Japanese industry is very export-oriented and has taken a big hit because of the high yen. The same poster also said Japan would be hit by inflation because of this, but this will also be good news in Japan as the country has been battling deflation.

Jesper Koll, MD & Head of Japanese Equity Research at JPMorgan Securities Japan: “You are actually going to get an all out attack that actually is going to add to economic growth that may actually just do the trick of pulling Japan out of deflation”

Felix Salmon makes outlandish statements to pump up a his own circulation. To say that Felix Salmon is an idiot would be an insult to all the idiots in this world. Felix Salmon cultivates more following even at the cost of people trying to cope. Good job Mr. Salmon. I would not call you a vulture because I do not want to insult the vultures. You say government can print money to pay for the recovery. If it is to easy, why don’t you tell our own government to print more money to pay off the national debt, fully employ everyone, provide shelter for all our needy. You know it cannot be done. You pretend to be stupid on purpose to make your indecent remarks. To call you stupid would insult those who have no control of being stupid.

Enjoy you meals. Enjoy your meal ticket. It came at the expense of all those who follow your advice.

Smarter charity giving is important. Any body else would have worded better. Just think of all those extra Japanese missing out of water, food, shelter from the freezing cold, a life lost here and there. Felix Salmon of Reuters in a Felix Salmon.

Just who do you think you are, Felix Salmon?

How very dare you even think to belittle our country of Japan, let alone the work of these amazing charities and rescuers.