A recent (well, maybe not in internet years) episode of Planet Money returned to Haiti, where they’ve been doing a lot of reporting on the economics of the country post-earthquake and investigating how much NGOs are hurting or helping the recovery there.
In a previous podcast, they had visited a rural school that could barely be called a school. The principal, Enselm Simpliste, thought he could turn it around with a few hundred dollars to buy supplies for the kids, but listeners ended up donating $3000. With all of that money, he was sure he could build a brand new school.
Listening to the update, I found myself hoping that Simpliste had been successful. Maybe because I knew that it was incredibly unlikely that he would be. And yes, when the reporter returned, all that was there was a foundation in the ground. He had spent all of the money, and was left with nothing to show for it but shame.
The Planet Money team used the story to return to a question they’d asked before: do you give money directly to people who need it, or do you give it to NGOs who can help them? In Simpliste’s case, an NGO wouldn’t have helped him anyway; his school wasn’t near the epicenter of the quake, where they are focusing their attentions. But he clearly was unprepared to manage a contractor and build a school.
And why wouldn’t he be? He’s a school principal, not a contractor or builder. At the end of the show, they contrasted Simpliste’s story with that of a woman named Yvrose Jean Baptiste who had also explained that she just needed a little money to turn her business — selling goods and food — into something more efficient and profitable. Listeners donated almost $4000 to her, and with that, she actually made huge improvements in her business, paid off her debts, and sent her kids to school. She even put some into savings. Aside, perhaps, from her husband leaving her (she suggests he may have gotten jealous) her story is a success.
But one thing the show didn’t bring up, that seemed obvious to me, was that Baptiste’s experience as a business woman made her situation fundamentally different from Simpliste’s. Sure, an educator knows that school supplies will make a difference in educating a kid, but he’s not going to know anything about building a school. A business owner, on the other hand, is intimately familiar with the things she needs to make her business work, and she’s much more likely to be enterprising and savvy.
I think the question is less one of whether to give money to NGOs vs. poor folks — the question is, which poor folks?