Economy · June 20, 2022

How to Donate Effectively • The Berkeley Blog

co-authored with Andrii Parkhomenko (University of Southern California)

The Russian invasion of Ukraine galvanized the free world. Governments around the world have imposed sanctions on Russia and provided billions of dollars in aid to Ukrainians. Private companies and individuals have come together to support Ukraine’s humanitarian needs. According to some estimates, Ukraine has received nearly $ 900 million in private donations.

But the humanitarian catastrophe in Ukraine is only getting worse as the conflict continues. As we enter the fourth month of the war, it is important to take stock and plan for a long-term, resilient and effective approach to sustained aid. Together with other leading Ukrainian economists, we have collected tips on how to maximize the impact of individual donations and make sure you donate wisely.

Plan for the long haul

There remains an acute need for donations to improve the well-being of those who suffer and help those who defend them. The initial flow of aid has gradually diminished as people around the world feel the weariness of war. But it’s important to remember that Russia’s attacks don’t stop when we turn off the news. Ukrainian cities are continuously bombed, while war crimes are committed daily by the Russians.

There are many ways to ensure that the donations we make have a long-term impact. Spread the word to friends and colleagues. Set up recurring contributions to causes you support so organizations can plan ahead. Use less natural gas and petroleum products to help reduce Russia’s world demand for energy. Check the records of your elected officials, and if they seem more interested in their electoral success than helping the Ukrainians, call or write to share your views. Do something to take an active anti-aggression stance every day, however small: this is a marathon, not a sprint.

To maximize impact, donate intelligently

To make every dollar count, we need to allocate donations as efficiently as possible. It is tempting to donate to large organizations such as the International Committee of the Red Cross: this is a mistake. First, large organizations are less efficient. They have bureaucratic procurement procedures and may not understand urgent needs on the ground, unlike smaller local agencies which are more agile. Second, contrary to popular belief that large international organizations are more “trustworthy”, they are not immune from controversy. In Ukraine, the International Committee of the Red Cross is perceived with deep skepticism due to its questionable promise to open an office in the Russian city of Rostov, where Russia is taking the deported Ukrainians.

Does this mean that we should be discouraged? Absolutely no. Ukraine has many reputable organizations that are more efficient than international NGOs. For example, Ukrainian non-profit organizations such as Come Back Alive and the fund initiated by the Kyiv School of Economics have well-established logistics to send aid where it is most needed within Ukraine. Like Back Alive it offers transparent accounting down to the level of the individual items on its website and has even managed to provide help to the blocked Mariupol, something that most other organizations have not been able to achieve.

Treat the cause, not the effect

Finally, we need to think carefully about where we want to direct our aid: to end the war or to heal its consequences. Most of the people who support Ukraine are deeply opposed to the war. It can be tempting to translate that sentiment into a preference for offering purely humanitarian aid. But this logic is wrong. While humanitarian aid is key, donations to military causes help address the root cause of civilian suffering. Every Russian missile shot down by an anti-missile weapon means dozens fewer civilians who are in need of humanitarian care or, worse, are out of reach for any assistance.

Of course, private citizens have limited crowdfunding capacity for the Ukrainian military. The purchase of lethal weapons is the responsibility of governments. However, when Russia invaded, the Ukrainian National Bank opened a direct account for donations to the Ukrainian army. And for those hoping to take advantage of the tax deductible status of nonprofits, there are ample opportunities to help provide more protective gear. A large part of the Ukrainian army is made up of the Territorial Defense Forces, which are all volunteers and often lack adequate equipment and protection. With the help of donors, Come Back Alive and the Kyiv School of Economics procure not only humanitarian aid, but also items needed by both the regular army and territorial defense forces: helmets, body armor, drones and optics. This kind of help can make a significant difference now, before there are millions more injured and displaced who will need our donations for years to come.

Anastasia Fedyk is assistant professor of finance at the University of California – Berkeley Haas School of Business. Andrii Parkhomenko is an assistant professor in the Department of Finance and Business Administration at the University of Southern California’s Marshall School of Business. Andrii is Ukrainian and Anastasia is Ukrainian-American. Both are members of Economists for Ukraine, a group that works to end the Russian invasion and rebuild Ukraine.

Grade: the authors are not affiliated with any of the organizations mentioned in the article and do not derive any personal interest from their activities.