Mieux Donner

Cash or in-kind donations: what's the best way to help?

Par Alix Clément

Picture of Camille Berger

Camille Berger

Rédaction chez Mieux Donner
Temps de lecture : 3 min.

When it comes to supporting disadvantaged groups, the question often arises as to which type of donation is preferable: is it better to offer material goods or cash donations? Research and experience in this area, particularly that of the German donation platform Effektiv-spenden [1], suggests that monetary donations offer significant advantages over donations in kind.

The limits of gifts in kind

Donations in kind, such as clothing, food or various supplies, may seem like a practical way of helping. However, they have a number of disadvantages:

  • Mismatch with real needs: The goods offered may not correspond to the specific needs of the beneficiaries, resulting in waste or inefficient use of resources. For example, a duvet without thermal insulation will absorb moisture and therefore be useless to people affected by flooding.

  • High logistical costs: Transporting, storing and distributing material goods generates additional costs and requires a complex logistical infrastructure. Sometimes, the cost of disposing of goods sent unnecessarily – such as our badly insulated duvets – even becomes an additional financial burden for humanitarian aid organisations.

  • Limited local economic impact: The influx of external goods can disrupt local markets, adversely affecting local traders and producers.

The advantages of cash donations

Cash donations, on the other hand, offer greater flexibility to beneficiaries and have a number of advantages:

  • Adaptability to local need: By leaving it up to the organisations working on the ground to decide where to allocate the financial resources they have available, they can respond in a more tailored way to local needs, and not simply “make do”.
  • Autonomy and dignity: Beneficiaries can prioritise their needs and decide for themselves how to use the funds, thereby strengthening their autonomy and independence.
  • Economic efficiency: Cash transfers reduce the costs associated with logistics and enable resources to be used more efficiently, and more of them to be used directly to meet local needs.
  • Stimulation of the local economy: Money injected directly into communities is spent locally, supporting local businesses and services.

The GiveDirectly example

The organisation GiveDirectly [2] is a good example of the effectiveness of cash donations. Since 2009, it has distributed direct cash transfers of $1,000 to more than 440,000 rural households in Africa, totalling more than $220 million in aid to the poorest populations. Recipients use these funds for essential needs such as healthcare, education, entrepreneurship, access to drinking water, solar panels, home improvements and irrigation.

Studies such as that carried out by the Happier Lives Institutes [3] show that cash transfers have a lasting positive impact in terms of people’s general well-being and an increase in their standard of living. For example, ongoing research has revealed that recipients were still spending 12% more than the control group five to seven years after receiving a one-off payment, demonstrating the long-term impact of cash transfers on recipients and their communities.

Conclusion

Cash donations offer a more appropriate and effective response to the needs of disadvantaged populations. They enable recipients to make informed decisions about the use of funds, promote the local economy and reduce the logistical costs associated with in-kind donations. Organisations like GiveDirectly are demonstrating that cash transfers can have a significant and lasting impact on reducing poverty and improving community well-being.

Finally, there are other ways of ‘getting rid’ of objects that are no longer of use to us, such as donating them to charities closer to home to reduce transport costs, or sending the money from the sale of these goods to disaster-stricken or poverty-stricken populations in other countries.

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