CARE Turns Down Federal Money for Aid and Turns to Investing

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TEDsters have already heard this story — from speakers Iqbal Quadir, Ngozi Okonjo-Iweala, Ashraf Ghani, Jacqueline Novogratz, and several others at last June’s TEDGLOBAL in Tanzania: developing countries need investments more than aid.

One of the world’s biggest charities has now acted upon this idea. CARE, writes the New York Times, is turning down some $45 million a year in US federal financing, saying American food aid is not only plagued with inefficiencies, but also may hurt some of the very poor people it aims to help.

CARE says it will phase out by 2009 the practice of selling state-subsidized American farm products in African countries that in some cases compete with the crops of struggling local farmers (watch Jacqueline’s speech for a parallel take on how donated clothes compete with local textile production). The move is controversial — other charities are defending the current system — but CARE has already started investing in local companies.

Read the full NYT story.