Monday, December 26, 2011

On giving to the charities Heifer International and Smile Train

This post is a little outside the usual frame, but arises from that little bump of curiosity that keeps me writing these posts.

Background - For Christmas this year the Advocate had asked that we donate to a couple of charities that he supports: the Heifer International operation and Smile Train. Both of these are nationally advertised operations that function at above the $120 million per year range, and have received considerable positive publicity. Since I found more answers to questions I hadn’t initially thought to ask in a brief look at both operations, I thought I would pass on what I found. It may bear a little on your choice of giving.

Heifer International provides a catalog from which you can select animals, from camels to fish fingerlings, that the organization will provide to individuals in poor areas of the world, providing them not only with additional nutrition but also a way of starting a small business, as an aid to breaking their cycle of poverty.

My curiosity arose initially because I wanted to find out if there was any particular piece of livestock that would give a higher rate of return on the investment than others. My thinking was, illustratively, that perhaps it would be better to donate to buy a water buffalo, rather than a heifer, because of the additional work that the animal would be able to carry out, as well as providing milk, manure, and ultimately dinner. I had some fun for about an hour trying to tease out different rates of return, a heifer in Malawi could generate up to $130/month in milk revenues - helping to feed the family, while selling some milk, generated $60 a month in Uganda. On the other hand water buffalo in the Philippines would quadruple farm production, but still only up to $42 a month. Pigs could generate $45 a month (but how many?) and two alpaca will create 4 lb of wool a year at maybe $6 a lb, or just $2 a month – they must have other benefits. While the actual benefits weren’t always clear, as I poked through, my original choice of livestock didn’t look too bad until I came to a disconcerting post which pointed out that my research had actually been time wasted.

For the post pointed out that, had I bothered to read it, that this is what it said, at the bottom of the donation page.
To help the most number of families move toward self-reliance, Heifer does not use its limited resources to track gift animals from donation to distribution. Gifts made through this catalog represent a gift to the entire mission. We use your gifts where they can do the most good by pooling them with the gifts of others to help transform entire communities.
I must confess that, when making the donation I did not bother to read that small print at the bottom of the page, which may have now been changed to
The prices in this catalog represent the complete livestock gift of a quality animal, technical assistance and training. Each purchase is symbolic and represents a contribution to the entire mission of Heifer International. Donations will be used where needed most to help struggling people.

Now it is understandable that tracking individual gifts may be difficult and expensive, and I really did not expect that I would hear that a particular family had received the buffalo (see this video of what might be done), but I had hoped that someone (and in my imagination it was in Nepal) would get a buffalo, and now I was left wondering about the funding and where it actually might be going. There are, it turns out, other beneficial things that are being done with the money apart from the mission that is most heavily advertised. They help start farmer organizations and work with the International Red Cross in bringing war widows and Untouchables into the Nepalese community.

I also found a note which describes the policy in more detail.
Heifer provides community groups with livestock if and only if they request it after training in community values and studying the available resources. If they submit a strategic plan showing how they will care for the animals, how having livestock will substantially increase their livelihoods, then and only then does Heifer provide support. And then we ask that they source animals locally and “pass on the gift” of offspring AND TRAINING to others. The farmers use manure as organic fertilizer to increase crop production, plant trees to preserve the environment, raise honeybees and worms for composting, and on and on.
The Charity raised some $133 million in contributions in the year ending June 30, 2008, with the outgoing CEO getting some $288,912 in compensation. The overall organization had a paid staff of some 332 at the time, and fund raising used about 14% of contributions. Apparently the charity has also built a “Global Village” down in Arkansas, that has received some criticism since it detracts from the overall mission. (I suspect we will be travelling to Arkansas in the none-too distant future.) It appears that the charity had some 928 active projects, in 54 countries in 2009. It was sufficiently worthy that the Bill and Melinda Gates Foundation gave it $42.5 million (and they are reputed to do a fairly thorough review before they give the money). In the current annual report support is stated as being given to 1,000 families, with typical project support lasting over five years. And in the latest report it also gives some of the information that I started out looking for:

The average income gain from the project is $3,808 in Albania (equal to the average per capita income). In Nepal it is $572 (against income of $427) and in Uganda it is $1,456 (against an average income of $490).

Looking at the relative return on investment for donors - in Albania the ROI (annual dollar income per dollar for livestock) is 9.46 for cows; 7.51 for goats and 10.6 for bees. In Nepal it is 3.7 for cows, 2.87 for buffalo, 1.79 for goats and 0.8 for pigs. In Uganda it is 2.6 for cows and bulls, 5.72 for dairy goats but 9.75 for meat goats, while pigs bring in 8.32 and fish return 11.22.

However as Heifer notes the income is not the only benefit. Firstly the recipient has to pass on one offspring to another recipient in order to sustain the program, but then the recipient also has a steady long-term increase in assets that come from the additional offspring that the original gift produces. Thus, in Malawi, 90 initial beneficiaries are expected to grow to 130 families by the end of 2012. And in Uganda 118 original gifts of heifers produced offspring that were handed on to a second wave of recipients, so that, to date, some 223 families have been assisted.

This does, however, resurrect the question over how many different gifts of livestock are made each year. Typical projects are of about five year duration, with the first year being one of instructing the recipient on how to care for the gift, and in preparing the “compound” (livestock must not be allowed to roam and graze, but are fed within this enclosure which helps with collection of manure for fertilizer). The second year is where the recipient receives the gift, and, depending on species, at the end of that year or during the next, the first recipient will initially raise and then pass on an offspring to a second beneficiary. (It is not clear if the process continues thereafter with that second recipient also having to pass the “first child” on in turn, so geometrically multiplying the benefits over time). There are two more years of monitoring to ensure that the health of the gift and the economic welfare of the recipient, and to integrate the individual into a community to better market the product. The initial recipient also keeps (or sells) any additional offspring. For example one of the success stories told in the 2006 report was of a disabled Chinese farmer who received an initial gift of 12 goats in 2002. By the time of the 2006 report the family had increased the herd size to 230 goats (as well as passing on the 12 gift goats to other farmers). It is this kind of growth, that leaves the farmer independent and successful, that is a major goal of the program.

Perhaps I can express my concern, however, better with another example. From 2005 to 2009 the Moutori Livestock Development Project in Burkina Faso provided 400 chickens and 80 roosters to 120 original families. If we take the donation cost of the chicks, say 120 times $20, then the livestock cost is $240. The overall project cost was, however, $148,644 (project 21-1203-70).

Put another way, the goal in 2005 was to give livestock to 1 million families over 10 years. That is some 100,000 a year, but since this includes pass-ons from the original recipients. Heifer International only supplies livestock to 50,000 families a year. If each donation is the equivalent of a heifer (though it may be three or four goats, or perhaps two water buffalo) then the initial livestock cost (as defined in the catalog, and that seems about right) is $500 per family. 50,000 times $500 is $25 million. (And that is making a generous assumption, since as shown with the chicken example, livestock costs may be a lot less). With the charity taking in more than $133 million a year, it does point out that the animal supply part of the program, the donations for which provide the vast majority of the income for the charity, sees less than 18% of the income. Now that is not to say that the rest of the activities of the charity are not worthwhile and necessary, but it is not quite the way I had thought my donation would go. Putting it in perspective, while I thought we were contributing a water buffalo, the actual livestock part of our donation was more likely to have been one of those chickens. Ah well, as was said about the Harding and Coolidge Administrations who had put a “chicken in every pot,” that is a step toward prosperity, but it is not "one giant leap for mankind."

Which brings me to the Smile Train. It is important here to distinguish this charity from Operation Smile which has basically the same goal of treating impoverished children born with cleft lips and palates, and has been around a little longer. The founder of Smile Train was apparently once involved with Operation Smile, and started this similar charity in 1999, though with a different approach to the problem. In contrast with Operation Smile which sends American surgeons abroad to carry out the surgery, a practice for which it has been criticized, Smile Train relies on training and funding local surgeons in best practices.

Number of surgeries performed with Smile Train Support (Smile Train Annual Report )

They report helping 100,000 children a year, working with local doctors to carry out the surgeries and providing information to them on up-to-date techniques to improve the procedure. They also report having distributed software to more than 38,800 medical professionals, and run conferences and encourage methods of communication that keep these individuals up to date on their subject.

In 2010 their income (including contributions in kind) was some $162,296,235. They spent some $110 million on program services and education, and around $22.5 million on fundraising, claiming only $1,187,089 for management and general costs. There should be a little caveat here. (One of the two niggles that I have with this charity). The co-founder and President, Brian Mullaney, was compensated to the tune of $678,058 in 2009. And the books showed that the assets of the charity increased by $28.5 million, to $135 million. It claims to be one of the fastest growing charities in America, and apart from the President’s pay, the size and rate of growth of these assets is the second item that is a bit of a concern. The reason goes back to a remark that the President, Brian Mullaney, made in 2008.
Mullaney estimates that Smile Train is close to reaching a historic break-even point: it will perform more operations each year than the number of children born each year in developing countries with cleft deformities. This means Smile Train may be well on its way to putting itself out of business. “That,” Mullaney says, “would be a dream.”
Unfortunately before one reaches that laudable point, the charity will reach another, when it “runs out” of doctors to train and reaches the capacity of the system to handle patients in a given year. At that point the charity may take in more money than it can effectively spend.

That is not to say that the charity is yet at that point, it has been noted that there is still a significant problem in India, for example, where over a million children need treatment, with 32,000 new cases a year. But it may be running out of “room to grow.” It has also been criticized in that the cost of the surgeries is often higher than the $250 which is used in the advertising . If the number of operations per year, for example, is 100,000 and the program services (treatment and training) cost is $85 million, then the cost per surgery is perhaps $850, doing simple division.

And yet nevertheless this seems a very worthwhile activity to support, though maybe it is getting a little too successful at fund-raising, which might cause it to add other programs and thus dilute its effectiveness on the original task in the years to come.

And so, a couple of closing thoughts.

First I am not, in itself, against programs that send American physicians abroad to help with medical problems in disadvantaged countries. My optometrist, Bud Falkenhein, has won national recognition for his work in this field, where he annually has led a group of optometrists to different parts of the world to help with eye problems. But that is slightly different from bringing in teams of surgeons that do operations under time pressure and then leave before any development problems have been dealt with.

Second, I am still glad that I honored the Advocate’s request and made the donations to two charities that seem to be a cut above the general mix; it is merely that I thought that the funds that I sent would have been more productive than they will likely turn out to be. There is, after all, somewhat of a difference between a chicken and a water buffalo, and between one operation and two. (And yes - because my great grandfather was a village plowman, a position of respect in the Scottish villages a century ago - I am just a bit disappointed that I could not help another individual gain that "step up" with the donation that we made).

P.S. I also recognize that there are other charities who allow one to donate animals. For example Episcopal Relief and Development has a "Gift for Life" program, where for just a little more money I could donate a plow with the ox to pull it. Perhaps I will look into that in a little more detail, and perhaps add another comment on a charity that I have, in the past, looked favorably on, but whose website is not available tonight.


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    "If you haven't any charity in your heart you have the worst kind of heart trouble" to cure it
    Help people, let's unite for one good cause, be a volunteer"save live"!

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