Why You Shouldn't Donate Money to Japan

For any self-respecting, compassionate person, the reflexive response to a natural disaster is to send aid to the disaster effort. In the case of Japan, don't.

If you're going to donate money to the Red Cross or another relief organization after a disaster, donate to the organization, not to the disaster.

Earmarking funds to dramatic humanitarian disasters often hobbles relief organizations by "ensuring that they have to leave large piles of money unspent in one place while facing urgent needs in other places," Felix Salmson argues. As a result, they have too little money left over to fight quiet tragedies like malaria and famine in Africa, and too much left over to build after must-see-TV disasters like earthquakes and tsunamis.

I can hear you thinking: Is it really possible to spend too much in a recovery zone after a disaster? Yes, it is. In Sri Lanka, Annie Lowrey writes, aid agencies built "mini-mansions" with the leftover cash, because they had to use certain funds for housing. In Indonesia, humanitarian groups spent so much money on orphanages that some families abandoned their children. A dollar spent on tiles for a mini-mansions is a dollar that didn't go to malaria nets.

In the case of Japan, there's another reason not to earmark money: They might not need it.

Japan is a wealthy country which is responding to the disaster, among other things, by printing hundreds of billions of dollars' worth of new money. Money is not the bottleneck here: if money is needed, Japan can raise it. On top of that, it's still extremely unclear how or where organizations like globalgiving intend on spending the money that they're currently raising for Japan -- so far we're just told that the money "will help survivors and victims get necessary services," which is basically code for "we have no idea what we're going to do with the money, but we'll probably think of something."

Read the full post at Felix Salmon's blog and keep reading Annie Lowrey at Slate.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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