The road to bad charity is paved with good intentions

I'm currently going through a mid-life crisis; my husband's. He's bought himself a big black motorcycle and is out every weekend pretending to be Peter Fonda in Easy Rider. And he's always saying I should come with him. I’m happy he’s happy, but there's no way I'm getting on that death trap, although I must admit I do like the idea of the leather jacket. So I smile, and then I give him some pre-planned excuse why I can’t go.

By Phyllis Costanza, CEO UBS Optimus Foundation

Fast forward to my last birthday, when I received a lovingly wrapped box form my husband. He was on the edge of his seat with anticipation. I opened the box and ... it was a motorcycle helmet. "Now we can go riding together," he cooed. I was overcome with emotion, but not in a good way.

Have you ever received a gift like that, one that's really doing more for the giver than the receiver? We've probably all given such a gifts and, while the intention is usually good, it is a trap many of us, consciously or not, have fallen into. And it's not just giving gifts. This way of thinking permeates many other areas of our lives. Take charitable giving for example.

Done well, charity can make a real difference to the lives of the giver and receiver. Done badly it's a waste of time and money that makes us feel better without actually helping. But there's any easy way to make your charity more effective for the people on the receiving end that also allows you to feel good while doing it.

There are two key questions you should ask yourself before you give to charity. The first is; where should I focus my efforts? The second is; how can I ensure I will really benefit the people I want to help?

For the first question there is a golden rule of giving that you can apply. It's involves identifying the problem you want to solve, understanding the obstacles to overcoming the problem, and defining the solution to overcoming the obstacle. It's easy, P.O.S.

So, for the sake of argument let's say you want to help improve the lives of orphan children in Asia. That's the problem you've identified. The obstacle appears to be that children who have lost their parents live in poor conditions in far off countries with no hope for the future. So the solution seems obvious; give money to orphanages to make the children's lives better or, better still, go and volunteer at an orphanage, or both.

So let's assume you do both, and let's apply the P.O.S test and see if you've made a good choice in what cause to support and how you go about it. And here I can speak from personal experience.

My daughter volunteered on a school service trip in an orphanage in Sri Lanka for a week. She was one of twenty eager children from her school ready to save the world.

In Sri Lanka, she hugged, fed, and read to the young orphans. She grew to care deeply about these young children, and they her. She was heartbroken when she left. The children cried and held onto her leg when she tried to board the bus never to return again.

I have learned from personal experience that these might be called service trips, but this service is a disservice. The only children who really benefit are our children, who get to see the world, appreciate how lucky they are, and get some great material for Instagram. And this revolving door of care-givers does serious long-term emotional damage to the children who are used as Snapchat props for a week, and then forgotten.

Worse, this, and other kinds of voluntourism, is creating a monster. Let me give you an example. Cambodia is one of the poorest countries in Asia and is a hotbed of voluntourism. And, as voluntourism increases, so do the number of orphanages. It's basic economics; supply equals demand. And it's become big business.

There are an estimated eight million children in orphanages worldwide, most of whom are not orphans at all according to UNICEF. They are there because their parents cannot afford to feed and educate them, or because of health issues that cannot be addressed locally. In Cambodia, 75% of orphans have at least one living parent. And, over the past five years, as the number of voluntourists has increased, the number of orphanages has doubled.

Organizations like Friends International have uncovered that in some orphanages local families actually rent out their children to the orphanages, just to cater to these voluntourists who come by the bus loads to hug orphans, and of course donate lots of money. There are also many reports that unscrupulous operators deliberately keep children in squalor to play up to tourist expectations and attract far more funding. And it's not just Cambodia. In Nepal, for example, it is no coincidence that most orphanages are located in the five top tourist destinations. The list goes on.

So does voluntourism pass the P.O.S. test? The actual problem is not orphans as such, it's children from extremely poor families living in orphanages. The obstacle to solving this new problem is that families don’t have the economic opportunities, access to health care and educational opportunities to raise their children in a loving family environment, where they have the best chance to thrive. So, the solution is also different. We need to support families, support economies so they are not compelled to send their children off into an orphanage in the first place. The solution is definitely not to send them our children. It might make us and our kids feel good, give them an experience, but it does little if anything to address the causes that are putting these non-orphans into orphanages in the first place. In fact, you could argue we are inadvertently ensuring more kids end up in orphanages, definitely not what we intended. So voluntourism definitely does not follow the golden P.O.S. rule.

I am not picking on voluntourism in particular. There are many other examples. How many of us have given our old clothes to charity? Well, Oxfam estimates that the vast majority end up in Africa. The result is that while a select few have become very wealthy re-selling our cast-offs we are unintentionally destroying local textile manufacturing industries and throwing people out of work. Not what we intend when we drop clothes into the collection bin I am sure. And breast cancer awareness campaigns where we can buy myriad pinked-up products. This has made many companies rich and there is no guarantee that all, or any of the money we give goes to help find a cure. Worse, many of the pinked-up products have been identified as contributing to cancer.

At this stage you may be asking yourself if your faith in charities misplaced, and if you can actually make a real and sustainable difference. Yes you can. There are tangible, effective ways that you and I can help solve the real problems of real people. We should be guided by our hearts, by compassion, and we ought to feel good about giving, but we must remember to engage our brains, our common sense too. It doesn't take much effort, and there is help out there.

We have seen that the P.O.S formula helps us to apply logic and not be swayed by anecdotal evidence and the glitzy but ruthless marketing of some charities. You can use it to select the target for your donation. But then how do you pick the right organization, the one that will actually deliver?

The good news is that there are many reliable and trustworthy organizations that monitor and evaluate the performance and effectiveness of charities, organizations like Charity Watch, Charity Navigator, Give Well to name but a few. These exist everywhere, and in Germany, for example, there organizations like DZI and Phineo that have scrutinized and recommend hundreds of reputable and highly effective charities.

Anyone giving to these charities has the right to feel good. But if you feel you may have made some questionable charity choices don't give up, you can do better. Simply stop thinking of “doing good” just from your own perspective and think about what will really benefit the people you want to help. Use the P.O.S formula and check out the websites I mentioned above.

Yes, it takes a little more time and effort ¬about the same amount it takes to choose a new smartphone ¬ but you’ll find the personal satisfaction of doing good is far deeper, and far more rewarding. Why? Because you'll be making a real and lasting difference to someone and will have earned the right to feel really, really good. So challenge bad charity, don't fall into the feel good factor trap, and make sure your good intentions count.

Watch Phyllis' complete speech at TEDxHamburg.