Michelle Hutchinson

Using aid to finance the refugee crisis: a worrying trend  

In 2014 the number of displaced people exceeded 50 million 

for the first time since the Second World War

. This poses a particularly large problem for Europe, since refugee applications to the EU doubled between 2014 and 2015.

Thankfully, many European governments have stepped up to help. 

 registered around a million asylum seekers in 2015 - achieving this by speeding up processing time for people both from safe countries of origin and those from particularly unsafe countries of origin (especially Syria).

Unfortunately, this help has too often come directly out of Official Development Assistance (ODA) budgets (i.e. from national aid budgets). An Organisation for Economic Co-operation and Development (OECD) directive allows funding a refugee’s basic needs in a host country to count under ODA for their first year in a country, and a number of countries are taking advantage of that. (See page 2 of 

) The graph below shows how this directive has combined with the refugee crisis to lead to countries drastically reducing funds they are actually spending on overseas aid.

This trend is deeply troubling because it is comparatively expensive to settle refugees in countries like the UK. The costs to settle a refugee vary widely depending on the host country, but they’re on the order of $10,000 per year. (See page 3 of 

). When you consider that this is setting up a person with a new life, it isn’t that expensive. Yet when we compare how much we could otherwise be helping people with that money, the grave injustice becomes apparent. As one example, iodising salt to prevent iodine deficiency is estimated to cost 

 Providing this for children is estimated to produce an additional 50 years of schooling per $100, since iodine deficiency hinders cognitive development. And iodine deficiency is still very prevalent in countries that host most of the refugees such as 

Using the ODA budget to settle just one person for a year, then, prevents us from helping literally hundreds of children in equally bad situations to get a better education. It is still an extremely good use of money - but we should be finding that money elsewhere (perhaps through a 

Although there has been piecemeal news coverage of ODA budgets being used to settle refugees, there has been scarcely any coverage of this as a wider trend, and of the scale of the problem - highlighted by the graph above. Indeed, hosting or processing refugees now uses 9% of ODA - 

double the percentage it did the year before.

Some people argue that immigration is actually good for the host country, such that it seems as if 

spending money on settling immigrants is not actually ‘assistance’ at all.

 But even assuming that to be false, the striking unfairness of rich countries being unwilling to settle refugees from their own budgets rather than what is set aside for assisting poorer countries is brought home by the comparatively low burden of refugee intake borne by Western European countries and the USA compared to countries like Lebanon and Jordan:

How can we improve the situation? If we can raise awareness of this trend, we may be able to put pressure on governments to avoid it - to find alternative sources of funding for processing and settling refugees. The ONE campaign has 

 aiming to do just this. Writing publicly about this trend and why it’s problematic (whether on your own blog, or for your local newspaper), could also be helpful. More broadly, showing your support for international aid, such as by supporting 

 could help prevent aid money from being reallocated.

In the longer-term, the increasing evidence base about the efficacy of direct cash transfers in humanitarian crises may lead to their increasing adoption as a way of supporting people nearer their place of origin. A promising sign of increased popularity is the President of the World Bank 

speaking out about the importance of increasing their use

. Supporting GiveDirectly might be helpful in continuing this trend.

The number of displaced persons in the world today presents us with a significant humanitarian crisis. But we must avoid compounding the crisis by diverting aid spending. Hopefully, by 

 that we care about the issue, we can reverse this worrying trend.

Giving What We Can is a community of effective givers – an international society that helps people commit to giving more, and giving more effectively. Our members donate at least 10% of their career incomes to the charities they believe will help others the most. Now we need your help to keep our momentum into 2016.

Giving What We Can needs your support this Christmas

Giving What We Can is a community of effective givers – an international society that helps people commit to giving more, and giving more effectively. Our members donate at least 10% of their career incomes to the charities they believe will help others the most.

Over the last year, our community has doubled in size. Our members have now collectively 

donated more than $10 million, and pledged over half a billion dollars

! We have been testing out a range of ways to attract and retain new members, and seem to have found some to be really successful. Amongst these are 

We would like to capitalise on a successful 2015 by scaling up some of the most promising avenues for attracting and retaining new members. To do so, we need to increase our team size. We've been lucky enough to have had really excellent applicants in our recent recruitment round. In order to carry out our plans — detailed in 

 — we need to reach our fundraising goal.

We think that the most relevant considerations for choosing whether to donate to us are our strong track record, and our plans for growth. But we also regularly calculate our effectiveness, to ensure that we are providing a substantial leverage ratio for our top charities. Our 

 for this indicates that for every $1 spent by Giving We Can, around $103 (counterfactually adjusted and time-discounted) will be moved to top charities.

, of which we already have £193,000 pledged. We therefore need to raise a further £282,000. You can find a full breakdown of our budget, along with details on our plans and our cost-effectiveness estimates on our 

 — you’ll also find a link with instructions for how you can donate.

If you decide to support us, I’d like to extend a huge thanks on behalf of the 

 — your generosity means that we can continue to help make the world a better place as effectively as possible.

Michelle is a former Executive Director of Giving What We Can. She has a PhD in Applied Ethics from Oxford University on prioritisation in global health.

Michelle Hutchinson

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Using aid to finance the refugee crisis: a worrying trend

Giving What We Can needs your support this Christmas