Saturday, March 22, 2008

Make Poverty Personal

Charities use lots of arguments to persuade you to give them money, but what about arguing that it will make you happy? That's the conclusion of happiness research at the University of British Columbia:
In another experiment, the researchers gave participants a $5 or $20 bill, asking them to spend the money by 5 p.m. that day. Half the participants were instructed to spend the money on themselves, and half were assigned to spend the money on others. Participants who spent the windfall on others reported feeling happier at the end of the day than those who spent the money on themselves.
Yet another useful finding from the field of behavioural economics. It got me thinking about our own Irish Aid efforts. As I've noted before, Irish Aid is in danger of crowding out the efforts of charities to raise funds themselves. This year, the Government will spend €914 million on 'official development assistance': or foreign aid to you and me. Though a lot of this will go to Irish charities working in developing countries, the vast majority of it will simply be given to non-Irish NGOs and other international bodies.

I think this is wrong - and indeed others are beginning to question the efficacy of our burgeoning aid budget. If Irish tax payers are going to fund overseas aid initiatives then at the very least the funding should go to Irish organisations leading such initiatives. Which brings me back to the research about happiness and giving. Why not let every citizen in the country decide how to spend Ireland's aid budget - that way you get the benefit of spending that reflects the wishes of the electorate AND they all get the good feeling buzz from doing good? Direct involvement, after all, is at the heart of the New Philanthropy as it has been called.

I see it working this way: each voter on the electoral register is given a voucher worth their part of the total Irish Aid budget at the start of the year - that's about €286 each given a population of 3.2 million aged over 18. Each citizen can then 'spend' their voucher (during the year or the voucher is no longer valid) by giving it to any one of the Irish NGOs registered with Dóchas. The charities can advertise their activities in developing countries (as they do already) in order to attract voucher donations. Citizens should also be able to elect to pay their voucher directly each year by standing order to a charity of their choice, giving the charities some sense of continuous funding.

There would be a few details to work out, e.g.: what if not all citizens donate their vouchers by the end of the year? A simple solution would be for the Government to use any underspend to 'top up' charities funding pro rata to the amounts they receive from private citizens (and so achieve it's stated goal of overseas aid to the value of 0.7% of GNP by 2012). And what about all the civil servants working in Irish Aid? Simple: they should re-focus on championing free trade as the proven formula for making poverty history - like it did for us.

Such an initiative would increase funding to Irish NGOs, engage Irish citizens directly in Ireland's aid efforts, and make everyone happier to boot. The money would probably be better spent as well come to think of it. So why not?

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