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As a people, Americans giving more of themselves

In a ranking of government spending on foreign aid, the United States ties (with Greece) for 22nd place, the stingiest possible result, in a 22-nation comparison of Western democracies. Yet the U.S. is a more generous nation than this cranky observation suggests - always giving far more money to poor countries than any other country on Earth. These different conclusions rest on a single stipulation. Measure government financing only and the United States appears cheap. Measure private financing as well as public, and it appears generous. Measure private financing only and the United States appears downright saintly.

The Washington-based Hudson Institute, in its 2009 Index of Global Philanthropy and Remittances, said U.S. government financing of foreign aid continued to decline in 2007 (as it did in most countries) - falling from 12 per cent of all sources of U.S. foreign aid in 2006, to 9 per cent a year later. Private financing now provides 91 per cent of all U.S. foreign aid, confirming what the institute describes as an unprecedented rise in American "social entrepreneurship."

In its report, released in April, the institute said Americans aren't merely giving more money, they are giving more of themselves. In 2007, one million Americans donated their skills as volunteers in foreign countries - 75 per cent of them remaining abroad for at least one month. Five times as many Americans toiled abroad in foreign aid projects as Americans who served militarily in Iraq and Afghanistan (though military service, when you think about it, is foreign aid of a different kind).

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By the institute's analysis, the U.S. government provided $21.8-billion (U.S.) in "official development aid" in 2007 (the last year for which statistics are available), almost twice as much as Germany ($12.2-billion), the No. 2 country. Canada ranked ninth in absolute terms - but 16th as a percentage of gross national income. Count people's private giving, though, and Canada rises to fifth (with giving of $14.3-billion).

"[U.S.]corporations, foundations, charities, individuals, universities and religious organizations also continue to give time and money," the institute says, "in unprecedented amounts." Corporations gave $6.8-billion. Foundations gave $3.3-billion. Charitable organizations and charitable individuals gave $14.3-billion. Churches gave $8.6-billion. Universities gave $3.9-billion. Total private philanthropy: $36.9-billion. Add $79.0-billion worth of remittances - money sent "home" by U.S. immigrants from poor countries - and the total reaches $115.9-billion. Count $97.5-billion in private investment and the total reaches $213.4-billion. Finally, include government aid. American "economic engagement" in the Third World in 2007 reached $235.1-billion - or 10 times government financing alone.

You wouldn't know it from the celebrity philanthropists, from Group of Eight proclamations or from papal encyclicals, but U.S. corporations are important players in foreign aid, giving as much as Sweden and Norway combined. In 2007, U.S. corporations donated more money and more people than ever before. In one rapidly growing aid program known as ICV (international corporate volunteering), corporations send skilled employees abroad for periods up to six months. In 2007, 42 per cent of the companies that donated money to foreign development also donated people - prominently among them Goldman Sachs, General Electric, Starbucks and IBM. (When earthquakes devastated parts of China in 2007, Cisco donated $45-million - nine times as much as the U.S. government.) Pfizer, the drug company, has sent teams (doctors, nurses, lab technicians and managers) to 38 countries. Pfizer built and equipped Uganda's first infectious diseases institute - a national centre designed to help in the prevention and treatment of HIV/AIDS - and provided many millions of dollars worth of donated drugs. Taken together, pharmaceutical companies donated $6-billion for medical assistance in poor countries in 2007, an astonishing commitment.

Churches give more than corporations, though: 244,000 U.S. congregations gave $2.9-billion directly from their collection plates. And 34 per cent of those congregations (82,150 churches) sent volunteers abroad, supporting them with $759-million in cash donations. (Pastor Rick Warren's famous Saddleback Church in Lake Forest, Calif., financed 8,000 volunteers who ran relief programs in 70 countries.)

More than any other country, Canada shares the philanthropic dynamic that distinguishes the United States. In the Scandinavian countries, where government financing is higher (as a percentage of gross national income), little private funding occurs. In absolute terms, though, the decentralized funding provided by the U.S. produces 32 per cent more money than the next six largest donor countries - Britain, Germany, France, Canada, Japan and Spain - put together.

The moral question now isn't whether the industrial democracies should give more. The moral question now is how to end the waste, the corruption and the violence that frequently accompanies the delivery of development aid - and especially government-financed aid. Some African countries now get 12 per cent of their gross domestic product from this aid - four times as much as any European country received from the U.S. Marshall Plan in the aftermath of the Second World War. U.S. President Barack Obama was quite right, in his comments in Accra, Ghana, last Saturday, to make further Western aid dependent on "good governance." Pope Benedict's encyclical last week on giving was called Charity in Truth. Mr. Obama's proclamation on giving could be called Truth in Charity.

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About the Author
Neil Reynolds

Neil Reynolds is an Ottawa writer whose columns on national economic issues appear in Wednesday's and Friday's Globe and Mail. He is the former editor-in-chief of The Vancouver Sun and the Ottawa Citizen. More

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