New Orleans We are at the time of year when a lot of people try to unleash their purse strings or get right for the taxman and make some donations here and there to what NFL and Hollywood agents call “their favorite charities.” There are special sections in the big newspapers suggesting that a whole new world is out there with big data giving more information and speed to giving, but that’s such a wild fiction that we’ll hold our fire on that issue for another time, because the point here is really to talk about the real global philanthropists who are the millions of immigrant families around the world who send remittances every month back to their home communities and double down even harder this time of the year.
A chart shared with me from the Progressive Economy website tracking donations into low income countries shows how real donors stack up:
Remittances $354 billion
Foreign Direct Investment $290 billion
Aid for Donor Nations $161 billion
Private Charities / NGOs $ 32 billion
Oh, did I say these are just the transfers from various sources to lower-income countries. The World Bank most recent estimate in October 2013 was there were was a total of $550 billion in remittances including all countries which “includes $140 billion sent home to wealthy countries (e.g. from American petroleum engineers working in the Gulf states, securities trades in London, etc) and $60 billion sent to China.”
Of course the issue for ACORN International and our affiliates is still cost. Certainly, banks and others go out of their way to give the rich every possible break in taxes and whatever to make their gives internationally, but the working immigrant family trying to send money home pays way more than the sum total of all of the private charities and NGO’s support to send their $354 billion to their home countries. What does it take to get some real action on this? This year there seemed to be some movement generated by ACORN Canada in that country and some heartbeats were heard of interest in the USA, but mostly nada.
Meanwhile the oblivious World Bank is still claiming that of the $125 billion sent in remittances from the United States the average cost is only 6.4%. I assume this is partially to pad their figures on their equally specious claim that they will succeed in convincing all money transfer organizations to realize only a 5% fee goal in coming years. A goal now overdue by our reckoning under any level of creative accounting. The World Bank continues to blindly pretend that the predatory web does not include the cost of money exchanges to local currency and other pickup fees, which our studies have found move the cost for many closer to 20% than to 10%. Nor is there any explanation in this highly unregulated financial space that might explain why a family in Singapore pays only $2.75 to move $200 while intra-African wires for a Malawi worker sending $200 home pays $47 in banking and wire fees.
Big data can’t solve this problem, though big independent data might embarrass some institutions, “all the way to the bank” as the expression goes. Big backbones and a bigger heart would help and finally caring that hard working families in foreign lands who are moving money back and forth to their home countries finally get a fair shake from predatory financial institutions.