A Cycle of Dependency: How Donations Worsen Income Inequality

Regardless of the good intentions behind donations, the short-term gain experienced by poor communities often leads to the persistence of income inequality and an endless cycle of dependency. 

Secondhand clothing in Haiti. Vanberto. CC BY-NC-SA 2.0 

Donations are often associated with a positive image of helping destitute populations get the resources they lack. Yet, this short-term aid often results in far-reaching consequences detrimental to a country’s economy, which leads to the persistence of income inequality.

The donation of money that goes toward buying resources for impoverished communities often creates an endless cycle of dependency, especially if such service is repeatedly conducted through organizations or companies. First, the repeated nature of such service creates a false assumption among receivers that there will always be a supply of that resource without work, making them reliant on such aid. Moreover, the organizations themselves are indirectly relying on marginalized areas to promote their businesses’ charitable work. For instance, back in 2006, when TOMS started its “one for one” program, it would donate a pair of shoes for every pair that was purchased. Although the company’s motive seemed to be pure, it relied on underprivileged populations’ need for shoes to increase its business revenue

84% of unwanted clothing is thrown into landfills

When donations are consistently provided, those living in poverty often learn to become dependent on the donors as they see less reason to get out of their current situation. Local businesses also shut down, as the need to produce items goes away when high-quality donations are provided at a minimal price from external sources. Although that may come as great news for citizens of developing countries, most of the profit in this exchange goes to the exporters. A 2006 report found that, “textile and clothing employment in Ghana declined by 80% from 1975 to 2000; in Zambia it fell from 25,000 workers in the 1980s to below 10,000 in 2002; and in Nigeria the number of workers fell from 200,000 to being insignificant.” Such statistics imply that despite the good nature of external aid, it often comes at the expense of the receiving countries.

Haiti is a common dumping ground for secondhand clothing primarily from the United States, and due to its regular occurrence, locals have given this process the name “Pepe.” The Netflix documentary “The True Cost” elaborates on how Haiti’s textile industry is suffering due to the widespread popularity of Pepe, leading the country’s local clothing industry to disappear. For this reason, some countries have started to refuse the import of secondhand clothing, and more of it ends up in recycling facilities. Yet according to Newsweek, 84% of unwanted clothing is thrown into landfills. 

To combat waste, then, the fast-fashion industry needs to start recycling its own goods, minimize seasonal sales, make more durable products and normalize wearing recycled apparel. Additionally, governments need to start promoting the creation of more jobs for impoverished communities, so that all the necessary resources are available in the market at reasonable prices. Finally, donors should remember that regardless of good intentions, deprived communities may suffer long-term consequences due to misunderstood charity work.


Swati Agarwal

Swati Agarwal is a sophomore at University of California, San Diego, where she is studying Environmental Sciences and Theatre. Although born in India, she was raised in Tokyo, which gave her the opportunity to interact with diverse people from distinct cultures. She is passionate about writing, and hopes to inspire others by spreading awareness about social justice issues and highlighting the uniqueness of the world.

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