The money making business of development aid?

Next time you organize a fundraiser think twice about how you send the collected funds to those who really need it.


In an effort to at least a little help those affected by the disastrous flooding which has swept across some parts of the Balkans two weeks ago, Oxford students came together and organized a benefit concert and a fundraiser. The event was a success in every respect. But it was a sobering experience to deliver the money to those who needed it the most. It was a real Odyssey.


 The benefit concert was quickly put together at one of the Oxford graduate colleges – St Antony’s. There was no time for serious organization but people volunteered to play life music, to lend us their equipment, to open the bar and staff it on a very short notice, and we made t-shirts in a joint effort. The College administration tried to protest presenting a list of security hazards, but we convinced them.


It was a worthwhile effort. We managed to get people’s attention about what was happening and we collected nearly £1,300 within three hours. It was touching to see all the students and Oxford residents from the former Yugoslavia to work together in perfect unison for a common cause. The same stories about people’s cooperation and solidarity we read about in the news coming from Croatia, Bosnia and Serbia, were replicated here. Suffering does bring people together – no matter where you are.


One of the main organizers of the benefit concert, who also came up with the idea, is a Serbian student. The president of the student group who sponsored the event is a Bosnian. The fundraising desk was manned by a Montenegrin and a Croat, and the most vigorous, persuasive and utterly unrejectable fundraiser was a Macedonian. It was heart-warming to watch them and it was even more heart-warming to realize that over 150 people in Oxford – the cradle of the English elite – cared enough to come and donate quite a respectable amount. The message was clear “Oxford is with you!”


The original plan was to send all of the profit to the British Red Cross Balkan Floods Appeal. But on a second thought, reading news about the protracted arrival of humanitarian aid and customs complications on the borders, another way seemed more logical. Part of the money should be sent to the most affected places as a direct donation. But how and to whom?


We transferred over £800 to the British Red Cross as agreed and as advertised during the fundraiser – after all, that is for what people have donated their money. But after some discussion we decided to send the rest of the funds to Doboj, which made headlines due to the catastrophic extent of the flooding there. Through various personal channels, we managed to get contacts for local organizations, which were helping people to get places to stay and to save them from the worst. They needed medicine, anti-tetanus shots, disinfection, tools, gloves, Wellington boots, and many other things that were coming in too slowly.


It all seemed easy – we finally got a contact for one person. All we wanted was to transfer several hundreds pounds as soon as possible. But the process took a week.


Internet in Doboj was not working. Banks were also not fully functioning. That was expected, but someone could travel to a different city and get the money from another bank branch. But the transfer would take 12 working days and would cost around €40. That was not an option. PayPal could have worked too – but no one there had a PayPal account and even if they would have set it up, it would have taken days for the accounts to be verified and the money to be sent through. Moreover, PayPal does not seem to be working well in Bosnia terms of money collection. It was not a trusted way how to urgently send money. So we contacted friends across Bosnia and Serbia, trying to find someone who could bring the money in person and who had an international account. Same problems, same fees, same delays. We could not find anyone this quickly.


Western Union remained as the only option. For a fee of £37 (!) the remaining collected funds were transferred to Doboj. The exchange rate of marks to British pounds was 2.2834 (it was 2.404 for 31 May 2014 on Bloomberg). So the total real cost of the transfer was over £55. We had to suck it up and pay. There was no other option.


Waiting in the queue at Western Union in Oxford was an eye-opening experience. We were the only whites there. I peaked to see how much the customers in the  before me were sending. It was £900. I did not catch where but only the fee they paid was over £60. I bet that is what they earned in three or more days.


We had to send the money quickly so there was no other option. They probably had no other option either, even if they had time. Given the legal obstructions accompanying transferring money online to the majority of what we call developing countries, and the monopolies on financial sectors many governments have, Western Union is part of a giant remittances business. They know we have no other option how to deliver money quickly to places with limited banking infrastructures (especially countries with cash-only economies) or where international bank transfers are not allowed. They know we will pay the price. And so they make money. Unethical money.


Next time we talk about alleviating poverty in developing countries and sending humanitarian aid to disaster-stricken areas, we could also discuss who actually makes the most profit in this story. Western Union and similar institutions are certainly on top of the list. 


Having said that, we don’t give up. If you would like to help us raise money, which I will take to Bosnia and Serbia in cash this time, contribute here: