World Vision’s Addiction to SWEDOW
Posted on February 7, 2012 at 12:02 pm
World Vision (WV) is standing by their prolific use of SWEDOW (Stuff We Don’t Want) in their development programs. According to their recent blog post in response to my previous post, they will continue to send clothing emblazoned with losing team logos from both the NFL and Major League Baseball to developing countries.
Their reasons for doing this do not stand up to scrutiny and can therefore be chucked up to an addiction to Gifts-in-Kind (GIK). The benefits of these programs to WV are so great that they are willfully choosing not to critically evaluate their work.
So let’s look at WV’s arguments.
Argument #1 – World Vision field staff request GIK.
This argument is undercut by behind the scenes rumblings from staff. They often complain that they face tremendous pressure from their headquarters to request and accept GIK. They are pressured to use GIK to keep their individual project or country overhead ratios low. They are pressured to accept GIK because World Vision benefits from their partnerships with businesses and the businesses want the positive publicity of their products being used after disasters or for development. Neither of these pressures are related to the actual impact of GIK programs and the impact of their GIK cannot be proven.
Argument #2 – World Vision is committed to continuous improvement.
During last year’s controversy, Aid Watch requested documentation proving the need for and impact of their GIK program. World Vision admitted that they had not conducted a single evaluation of the GIK program because they state that these are donations, not a program. Yet GIK makes up one quarter of their annual revenue. It would seem both prudent and professional to evaluate such a large part of their work – however you want to classify it. At $251 million per year, the amount World Vision claims in GIK is greater than the total annual revenue of most non-profits in the United States.
The documentation World Vision did provide to Aid Watch did more to refute the use of GIK than to substantiate it. Laura Freschi goes into detail on what they actually found in the documentation World Vision provided.
While World Vision did not evaluate their GIK program before last year, you would think that they would have made an effort to evaluate their massive GIK program since then, after all many professionals in the field spoke out against their GIK program. Instead World Vision’s recent blog post states:
“Some individuals knowledgeable about the effectiveness of community programs in the developing world have contended that product donations, especially shirts and other clothing, is ‘bad aid,’ and should play no role in the work of non-governmental organizations. Based on our more than 60 years of experience, World Vision respectfully disagrees.”
So in 60 years they’ve never evaluated the need, impact, or effectiveness of their GIK and they’re certainly not going to start doing that now. Where is the “continuous improvement?”
Argument #3 – They assign fair value to their donations
While the amount of value they assign to their donated goods may be legal, many would argue that it is ethically questionable and deceptive to donors.
World Vision valued last year’s Super Bowl items at the US rate of $11.65 per item even though they are not allowed to distribute them in the US. And World Vision themselves estimated that purchasing the shirt locally may cost as little as $2. In valuing them at $11.65 they are marking the items up by 482%. This makes their overhead ratio appear far lower than it actually is. And it’s not just t-shirts that World Vision is using to manipulate their overhead ratio, it’s also drug donations.
In a recent article in Forbes Magazine titled Donated Pills Make Some Charities Look Too Good On Paper, the author examined the over-valuation of deworming pills by nonprofits.
The pills can be bought on world markets in Europe, China and India for 2 cents each. But they have been valued on some nonprofits’ financial statements as noncash gift-in-kind (GIK) donations worth as much as $16.25 per pill—81,000% above that world market price.
The Article mentions World Vision as one of the organizations using these exorbitant markups.
For many years World Vision, a large faith-based charity in Federal Way, Wash., was one of the most aggressive in valuing deworming pills. In 2009 it used $10.64—the same 53,000% markup used by Crista Ministries. After studying the issue and paying for outside data, it dropped the valuation for 2010 to $2 a pill—a mere 9,900% markup.
Forbes goes on to say that:
… loose accounting rules for donated GIK goods, a questionable drug-pricing list and the drug price disparity between U.S. and foreign markets have provided charities some cover for their use of even the most egregious GIK valuations. Indeed, the biggest scandal here might just be what’s legal.
So while World Vision is following the letter of the law, they are not being honest about the value of their goods. It is the prolific use of SWEDOW and GIK to artificially inflate a non-profit’s worth and deflate nonprofit overhead ratio that led me to write a 20 page paper demonstrating how overhead ratios are meaningless and should never be used as a measure of a non-profit’s performance.
World Vision’s arguments are easily refuted and have been refuted many times in the past. Instead of taking this as an opportunity to grow and improve as a professional organization, World Vision is instead clinging on to their 60 year addiction to SWEDOW.
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Guides by Good Intentions are Not Enough
Good Intentions’ Guide to Holiday Charitable Giving
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Related Posts:
World Vision and sports-related product donations - World Vision
NFL / World Vision Part II? - Good Intentions are Not Enough
World Vision Super Bowl Shirts: the Final Chapter - Aid Watch – Critically evaluates documentation sent to them by World Vision
World Vision’s Annual Financial Review
The 200 Largest U.S. Charities – Forbes
Tracking the World Vision / NFL Shirt Donation Controversy – Good Intentions are Not Enough
The financial costs and benefits of sending a shirt overseas - World Vision
Donated Pills Make Some Charities Look Too Good On Paper – Forbes
How much are the NFL shirts worth? World Vision isn’t saying – Good Intentions are Not Enough – with information in the comment section by World Vision
« NFL/World Vision Part II? • Why nonprofit overhead doesn’t mean what you think it means »
No comments? Let’s face it, there really isn’t much more to say.
We can see WV doesn’t, at least with tshirts, base its practice on evidence.
Why does the NFL still think this is a good idea!??
Who would be able to put World Vision under pressure to change this? Is there anyone with significant leverage?
@Rowan – the only people with any leverage on worldvision are the middle-of-the-road (relatively) church supporters of the charity. And given that many are very likely to take WV’s word for it, I doubt we’ll be seeing many calls for change from that constituency.
The most significant leverage would be held by those within World Vision (across the globe, not just US) who don’t agree with the practice. Change on this must come from within. I doubt they care too much about what a few loud voices on the outside think.
Re: the suggestion that people within World Vision is our only potential leverage point… What about the NFL? It’s doing this for the PR value. Turning the opportunity into a liability might see its PR agency finding a different way ‘give’ (and to get rid of useless jerseys).
That likely starts with a pretty simple online advocacy campaign, and goes from there, no?
[...] to send Patriots Super Bowl shirts (and other gifts-in-kind) to the developing world, because they’re addicted to stuff we don’t want. During last year’s controversy, Aid Watch requested documentation proving the need for and [...]
When I hear of SWEDOW donations being made, I generally don’t get irritated. Not everyone can be expected to realize the harm such donations may have on the recipients’ economies (for such donations clearly rob the local markets of business) or to even know if such donations are in demand (for, as stated above, the field staff are under “tremendous pressure” to accept so the recipients’ demands must not be foremost in WV’s planning). However, the fact that World Vision refuses to reevaluate its NFL shirt donations, upsets me. WV is an organization dedicated to “tackling the causes of poverty and injustice”, according to their website. This means World Vision isn’t just a college group or church trying to make a small difference in the world—World Vision is involved in about 100 countries and is a multi-faceted organization supposedly focused on helping alleviate poverty and injustice. Thus, it would seem logical that they listen to those they choose the most beneficial method of aid, not the method that makes them appear the most charitable. At the moment, WV appears to have the “planner” mentality, as they are allowing US surpluses to determine what to supply and supposing they know what things would help those below the poor situations. I would be interested to see if and how their practices changed, were they to adopt a “searcher” mentality. In my opinion, WV should work to support local markets and allow the recipients’ demands to direct their aid. From this post, it seems pretty clear that World Vision has allowed the image-bolstering ideas of its donors to direct their aid. Even more disheartening is the fact that WV cannot produce clear evidence for whether or not their efforts have improved anyone’s condition—how can they stand by a program they don’t seem to have evaluated for benefit at all?
The use of SWEDOW is essentially a method to “cook the books” of World Vision, as it can have a significant impact on the accounting value of their organization. This point is spurred by the fact that they councourage their field staff to request and accept these gifts, since it lowers the overhead costs. Given that World Vision has previously neglected to research the impact of such gifts to those receiving them, it seems that World Vision is more interested in their own capacity to financially benefit from GIK. Lastly, this is further demonstrated by the over evaluation of GIK, as it, once again, improves World Vision’s financial standing. Overall, World Vision’s use of GIK/SWEDOW is seemingly self interested and verging on unethical. This is not legally unethical, but unethical for an organization focused on improving the lives of people in less developed countries. Their end goal should be to achieve meanigful goals for people in less developed areas, not falsely buoy their own finances with products that could either be useless or even harmful to the people that receive them.
Ah, the vagaries and foibles of human nature. I worked with WV for over a decade and made my exit a few years back. It is true that one of the reasons WV will never change from within is because, as already stated, they are addicted to SWEDOW and GIK. That addiction is deep-seated; the people in the support offices who have risen to the top owe much of their wealth (they are well paid!) and power to the book cooking use of GIK. However, at least as importantly, WV lives and breaths by the philosophy that “any dollar raised is a good dollar.” The idiotic Western conservative Christian perspective that “everyone is nice and sweet and we should all just have a group hug and get along” permeates the organisation from top to bottom. The idea that the motives of a donor could or should be questioned is anathema to them. (Of course, they decided to “boycott Nestle” because their practices blatantly hurt children, but be assured that WV never has and never would have received much money from Nestle. It was cheap righteousness so they were OK with it.) And since they’re all Christians and guided by God to do only righteous things, how could you possibly question their motives and actions?!?! (Don’t get me wrong, I’m a follower of Jesus and I know some WV staff who are genuine believers. But the majority are, unfortunately, lost in the ozone, including the leaders and power brokers.) And then there is that horribly egregious issue of accountability. About 20 years ago or so WV started a huge experiment to give equal voice and vote to recipients as well as donors. Sounds great. Sounds righteous. Sounds Christian. The only problem is that when you give someone the power to decide how resources will be obtained and used, and that person has no risk in doing the fundraising or accounting to the donors, guess what? They tend to be less responsible in how they use the money. They tend to be selfish and self-serving. Of course there are admirable exceptions, but most people follow typical human nature and behaviour. A large number of the decision makers in WV, perhaps the majority, are people who are in it for themselves and their “tribe”. Their concern for the poor is a distant second, or totally absent. So forget about changing WV and get on with changing the laws so at least we can reign them in a bit and stop some of the more flagrant excesses. Also, by all means refrain from sponsoring a child with WV. It’s nice and emotional, and there is a slight chance you will actually help the child, but it’s 90% a fundraising technique and 10% development at best.
[...] in a clinic there). But some things are less intuitive, like donating baby formula to Darfur, or World Vision’s program of sending t-shirts with the losing Super Bowl team to Africa, or – as we will discuss today – TOMS [...]
OliviaG February 21, 2012 at 10:51 pm
When I hear of SWEDOW donations being made, I generally don’t get irritated. Not everyone can be expected to realize the harm such donations may have on the recipients’ economies (for such donations clearly rob the local markets of business)
As well as the implications of that money coming out of our economy, which means less to prosper our own and less to go into paying off the national debt. Really, if the world bank wanted to and planned it out, they could, through policy, get rid of the need for charities, and end the borrowing scheme this would result in unlimited potential money supply only towards the best and most modernized areas possible, it would result in no need for charities, and it would result in other countries economies being uneffected because they no longer feel obliged or feel the need to assist other nations through charities, as the world bank has decided to take over the funding. This transistion could not only help well underdeveloped nations, but as well increasingly developing nations that have accumulated, national debts. It could also cover bail-outs, without placing the expense on the people in the end, through accumulation of the national debt, it could also mean that, school funding and only other personal necessity can be covered by the world bank and mints, and transition many of our necessities to be free however regulated to a fair amount based on wide non-rigged public votes. There needs to be great assurity and evidence that votes are not being rigged as it has been a concern in the past, particularly for elections.
Clarification to last comment: Seed funding into the Most Modernized technologies possible