Remittances and the high cost of giving for the poor - consider this Avaaz petition

December 21, 2010 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: Canadian Charity Law

Canadians are ostensibly a generous people.  They give on average about 1 billion per year in donations to registered charities for internationally philanthropy that targets the poor around the world.  On the other hand remittances from Canada to developing countries are approximately 9 billion per year.  Remittances tend to come from new immigrants, migrant workers etc. that often have far less financial resources than the average Canadian.  There are no tax incentives for remittances but very high tax incentives for donations to charity.  Avaaz is concerned that some companies like Western Union are gouging unsuspecting people who make remittances.  Here is the Avaaz petition:

From: Luis Morago - Avaaz.org [mailto:]
Sent: December-30-10 5:32 PM
To: mark
Subject: Predators

Dear friends,

Western Union is taking critical money from the world’s working poor by charging predatory transfer fees. As we move through the giving season, let’s urgently shame them into action! Add your voice to the petition for fair fees:


This holiday season, Josh, a Kenyan student in the Netherlands, scraped together a year’s worth of savings and sent it home to support 10 struggling family members. Shockingly, the giant money transfer company Western Union skimmed off 20% of the cash meant for Josh’s family in fees.

Josh’s story is painfully retold every day, the world over, on a staggering scale—an estimated $44.3 billion worldwide was lost in transfer fees last year! The World Bank recommends that transaction costs not exceed 5% of the total, but Western Union has never faced serious pressure to lower its crippling charges. If we unite in a global outcry now, we can expose its predatory practices when its carefully crafted, family-friendly image is most vulnerable: the giving season.

Josh’s generosity—and that of millions of workers around the world—shouldn’t go to waste! Let’s call on Western Union to lower its fees to 5% for the poorest countries, and when the petition reaches 250,000 we’ll deliver it to the company’s image-sensitive board of directors. Sign now and then forward this to friends and family:

https://secure.avaaz.org/en/make_giving_powerful/?vl

Sacrifices like Josh’s dwarf foreign governmental aid every year and provide a vital lifeline to the world’s poorest economies. Slashing the obscene profits of companies like Western Union would dramatically increase assistance flowing into developing countries. Instead, families around the world received far less than they deserved so that Western Union’s CEO could take home $8.1 million in 2009.

The World Bank recommends that transfer companies limit fees to 5% of the amount being transferred, but some banks and companies have astronomical hidden charges. Perversely, the neediest countries coming out of war or disaster suffer the greatest losses, because of transfer companies’ monopolistic privileges and exclusive deals with local banks.

The yearly savings of men and women laboring in hospitals, construction sites and restaurants end up padding Western Union’s profits. The company funds charity projects to improve its corporate image – but these do nothing to hide the massive inequity that their business model perpetrates. Let’s raise our voices loudly to support true generosity during the holiday season – and help bring immediate benefits to workers and the relatives they sustain. Together we can make sure that needy families – rather than CEOs – benefit from holiday giving:

https://secure.avaaz.org/en/make_giving_powerful/?vl

When citizens around the world stand together to protest injustice, we can force back unchecked greed and inequality – as we’ve done together before. Buoyed by the warmth and empathy of the holiday season, let’s make sure that generous gifts arrive where they’re most needed.

With hope and gratitude,

Luis, Stephanie, Graziela, David, Paula, Ben, and the rest of the Avaaz team

SOURCES:

Western Union CEO’s pay more than triples in 2009, Associated Press:
http://abcnews.go.com/Business/wireStory?id=10241684

Past Time for Remittance Justice, ACORN International:
https://secure.avaaz.org/remittance_justice_report

World Bank Remittance Pricing resource:
http://remittanceprices.worldbank.org/


________________________________________

Avaaz.org is a 6.5-million-person global campaign network that works to ensure that the views and values of the world’s people shape global decision-making. (“Avaaz” means “voice” or “song” in many languages.) Avaaz members live in every nation of the world; our team is spread across 13 countries on 4 continents and operates in 14 languages. Learn about some of Avaaz’s biggest campaigns here, or follow us on Facebook or Twitter.

To contact Avaaz, please do not reply to this email. Instead, write to us at http://www.avaaz.org/en/contact or call us at +1-888-922-8229 (US).

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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