Private Sources in the United States Provided $95-Billion in Aid Overseas Last Year

By Holly Hall

Foundations, individuals, and other private sources in the United States provided more than $95-billion in aid to developing countries in 2005, more than triple the amount given by the federal government, according to a new study by the Hudson Institute, a Washington think tank. The bulk of the money — $61.7-billion — was provided by foreign-born individuals sending money to friends and relatives in their home countries.

The study found that private aid to developing countries — at $95.2-billion — far outstripped the $27.6-billion given in federal dollars. And private support was almost as much as the $106.8-billion given to the developing world by the governments of 22 developed nations.

In the United States, nonprofit organizations provided $26.2-billion, corporations donated $5.1-billion, and foundations gave $2.2-billion to developing countries.

The study found that the United States ranks third to last among the 22 nations in terms of how much government money it distributes as a percentage of gross domestic income (0.22 percent). The five countries that top that list are Norway and Sweden (0.94 percent), Luxembourg and the Netherlands (0.82 percent), and Denmark (0.81 percent).

But in terms of dollar amounts, the United States is No. 1, distributing more than double the next largest contribution by the Japanese government, which gave $13.2-billion to developing countries in 2005.

The study, the second of its kind, also attempted to measure donations by individuals, corporations, and charitable organizations to poor countries in the 21 other developed nations that were examined, but it succeeded in capturing reliable figures only for Britain, where private support totaled $2.4-billion in 2005. The researchers said that they have formed relationships with overseas organizations that will provide that information for future editions of the study.

Conducted by the Center for Global Prosperity at the Hudson Institute, the study also sought to compare the cost of delivering government and private aid.

A technical expert hired by the American and British governments to serve overseas for one year cost about $300,000 including that person's salary and additional costs such as housing, accident insurance, and travel, said Carol C. Adelman, director of the center. That is nearly three times the amount of what it cost a charitable group from those countries to place a comparable expert in a developing country.

The study also documented a rise in private philanthropic support over the last 15 years. Coupled with for-profit investments and other capital, the flow of private money from developed nations to poor countries began surpassing government aid in the early 1990s.

The researchers also said that in more and more cases, governments, corporations, and nonprofit groups were jointly financing overseas projects. "The line is blurring between corporate, philanthropy, and government aid overseas," Ms. Adelman said. "The government needs to learn how to bust out of traditional ways of providing support and put more into projects raising private money."

A free copy of the 2007 "Index of Global Philanthropy" is available online.