Donations can sometimes make matter worse rather than solve the cause. All forms of donations that involve giving a good or a service in essence create a dependency cycle… The receiver becomes dependent on that aid and over time the local industries collapse since it inhibits the self-sufficiency that they are capable of and so the economy suffers. Let me explain.
Something even more detrimental occurs when a large number of containers of goods are shipped to underdeveloped countries.. These include donated goods such as clothes from the developed world. Now here’s the problem. These destroy the local industries.. The hundreds of thousands of tonnes of clothes shipped to Africa regularly have crippled the local textile industry, the very industry that has propped up the growth of nations such as Zambia, Kenya, etc before the rise in the inflow of textile donations. This is not just limited to textile but other industries as well, including the electronics industry. It is just not possible for the local industry to compete with these basically free or extremely cheap goods thereby leading to entire industries becoming almost non-existent. Hundreds of thousands of jobs have been decimated as a result.
It is often presented that this inflow… Technological goods, for instance, will help the underdeveloped world to develop even more, however, it must be noted that these countries are quite better equipped than you think and also these are a source of income for millions.. Thus the inflow of even develop oriented goods can lead to the downfall of the local industry.
Small businesses are the backbone of a economy. Also, often this supply of goods is more than the demand and this in turn drives down the prices and the local business dealing in these goods suffer. Often charitable work undermines a recipient’s efforts in generating profits.
Another example of industry would be that of food. The inflow of millions of tonnes of food donations crushes the local food market and steals away its chance to develop. Local vendors and restaurants may be forced to go out of business.
A billion dollars worth of water pumps has been set up in the Sahara region over these past 2 decades to install over 60 000 water pumps. However, almost half of them are not functioning properly, with broken equipment and improper installation. They are left in that state due to the lack of resources and expertise in the local community.
This is mostly a result of cheaply manufactured low-quality goods. This allows them to stretch their funds even further which is in turn effective for the organization.
You can apply this logic to any donation-oriented activity. It can very well end up crippling the existing industry.
Besides, countries become dependent on foreign aid which not only hinders growth and development but they can also make a community too dependent, and once the aid dries up or is redirected elsewhere, the community suffers.
Perhaps it would be better to focus resources and funds on helping the local businesses thrive and pouring investments into the economy rather than supplying a mountain load of goods and services.