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The Economics of Volunteer Travel

Why we still volunteer abroad

In the first section of our series on voluntourism, we looked at the ethics of voluntourism. In this section, we'll shift our attention to another aspect of the industry: money. Specifically, what is the economic impact of voluntourism? Where is the money going? And how could we make it more impactful and efficient?

The global volunteer travel market is worth over $2 billion USD annually. There's an estimated 10 million people taking part in service-based travel each year. Further, this number is continuing to grow. This growth isn't necessarily good.

The Money Could Be Better Spent

By looking at the economics of voluntourism, it's possible to spot flaws in the logic used to support it.

Scenario 1: volunteer trip

Expense Amount

Volunteers' personal expenses x 12

$12,000*
Some of this is refiltered into local businesses.

Administration costs

$2,000

Total for project

$10,000

Take a typical volunteer service trip. Let’s say you have 12 people who pay $1,000 USD each (before flights) to go to South America to build a new dormitory at an orphanage. The $1,000 per person is on top of an equal or even greater amount raised independently from personal fees. So the group, in total, spends approximately $24,000.

This sum covers the costs of the group's expenses while in Peru. It pays for their meals, lodging, transportation, excursions, and activities. In addition, it contributes to all the costs of the building project itself.

Scenario 2: donation instead of travel

Expense Amount

Volunteers' personal expenses x 12

$0

Administration costs

$2,000

Total for project

$22,000

Let's now say that you, as a theoretical participant, admit that your groups $24,000 would go further if spent solely on the project.

It would help hire local workers and buy locally made materials rather than lower cost mass market ones. If you acknowledge this, then you must admit that what you are doing is ultimately about you, not about helping. This isn’t to say that you're not helping in an immediate and surface sense by volunteering. Rather, it means your presence is unnecessary to the success of the project.

One caveat I will mention though: the presence of volunteers does generate income among local businesses (where volunteers are spending money on snacks, water, and other personal items) and with homestay families, who usually receive a small stipend in exchange for housing volunteers. So yes, a straight donation will go further towards supporting a development project, but often the presence of volunteers brings income into other, indirectly related, businesses within the community as well.

Volunteer construction project

This example especially applies to people traveling abroad to do work for which there are likely local craftsman, far more talented than you or I, in need of work. If you aren’t a doctor, engineer, or bringing some other specialized skill into the community, it’s likely that your presence is taking a job away from someone within the community. You are, in your actions, messing with the economics of the place you want to help.

Another way to think of it: Your $24,000 could not only build a dormitory, but inject the community with much-needed capital, kick-starting the economy in way that is far more sustainable than any handout ever will be. Yet, you’re choosing to give only a fraction of that. The vast majority or your money is sucked away to cover the costs of you being there.

This Growing Market Isn't Regulated

The service-based travel market is almost completely unregulated. With significant concern over the effects that primarily unskilled and mostly short-term travelers have on the communities they visit, you’d think that there would be some form of unified oversight. There isn’t. Small organizations like Tourism Concern, an ethical tourism non-profit in the UK, are trying. Yet, even they struggle to map the market and enforce industry expectations.

As the market continues to balloon, pleas for some sort of regulation are growing increasingly louder. Prospective travelers, tour operators and coordinators, and communities inundated by well-meaning, but often poorly prepared volunteers, are all asking for regulations. Without them, it's far too easy for illegitimate companies to take advantage of volunteers and communities.

The experts know this exploitation is happening already. Gabriel Popham, writing for the Thomson Reuters Foundation, draws a direct relationship between “growth in the multi-billion dollar volunteer tourism industry,” and “concerns of overexposing vulnerable communities to unskilled foreign labor and dodgy operators exploiting foreigners for profit.” It's a concern long held by critics of the industry, but is just starting to permeate mainstream journalism.

Yes, there are satirical viral videos and memes that reach the masses. Yet, a genuine discussion on the issue could help volunteers make better choices about how they help communities abroad. As a result, less money would be spent covering travel expenses and exorbitant fees. More money would go to the communities who truly need it.

Market Opportunity Lures Travel Giants, not Development Experts

In early summer 2015, Carnival Cruises announced the launch of Fathom. This new cruise line would pair Caribbean vacations with volunteer activities.

Applauding their new product as innovative, they're really just jumping into the already expansive voluntourism economy. They're tacking unskilled work onto an exotic location and calling it volunteer service. Passengers will have a variety of volunteer activities to choose from including “teaching English in schools, helping to cultivate cacao plants, and build water filtration systems.”

Cruise ship

The first mega-corporation to dip its toes in the water, Carnival’s entry into voluntourism is a signal of the estimated market opportunity. I had the chance to talk with Tara Russell, the President of Fathom, shortly after they announced their first destination would be a place I know quite well. They'll be going to the city of Puerto Plata in the Dominican Republic.

For months I’d heard about the new cruise ship port being built. I’d heard that there would be some sort of community engagement aspect coming in. I was both excited and nervous to hear what was going on from the point of origin, the President of Fathom herself.

What I found was a business opportunity masked as social good and presenting itself as innovation. It was not unlike the majority of existing for-profit tourism outfitters. Their optimism, voiced through language of transformation (“our desire is to not only transform the place but also to transform the life of the traveler...”) was predictable. Their answers to questions of effectiveness were canned.

I then asked why they would have cruise ship tourists doing jobs, like planting trees and building water filtration systems, that are more than within the skill-level of the locals. It was argued that the workforce simply didn’t exist. This is something that just about anyone driving through the DR would have a hard time believing. Again, the needs of local communities were secondary to the market opportunity at hand.

Where Russell, and Fathom as a whole, do seem to have their head on straight, is with the concept of long-term engagement. Russell argues that while they could write a check, or donate a part of their profits to local organizations, their physical presence will create an “ongoing revenue stream of work” for local businesses. This is a concept that's integral to economic development.

The root of Russell’s presentation of Fathom was one of profit, profit generated through the selling of purpose, but profit none-the-less. Yet, it's easy to see how travelers get roped into the sales pitch of Fathom and other voluntourism experiences like it. We want to help. Voluntourists' intent is rooted in a good place.

Fathom may have jumped the gun, though. They recently slashed their prices just four months before their first ship will set sail, a sign that the concept isn’t selling as well as expected. Further, the key selling points, service and cultural immersion, are now less prominent. The opportunities for “sightseeing and fun” are given a higher billing.

Let's Stop Putting Profit Before Progress

Simon Hare, development director of British charity Globalteer, was quoted by the Thomson Reuters Foundation as saying,

“There are small local outfits as well as big corporations who see volunteering as a way of driving profits rather than an integral part of a long-term strategy for communities with real needs. At best this can make volunteering a waste of time and at worst it can actually be harmful.”

Make local friends

Selling social good, it seems, is just as key to the economics of voluntourism as the trips themselves are. It is through the marketing and sale of the ability to change the world that this $2 billion+ market has been developed, after all. That's not to say social good is a bad thing -- volunteer travel definitely has its heart in the right place. But because of flawed economics and a lack of regulations, voluntourism often doesn't result in its intended effect.

So, instead of trying to buy our way into social change, redirect your energy. Embrace other ways of benefitting a community that are both sustainable and involve you traveling there. Be culturally immersive. Support local businesses. Make friends. Learn. Be an active supporter of the communities you visit without buying a branded t-shirt or picking up a hammer.

It's Time to Increase Regulations

The voluntourism market is big. At $2 billion annually and growing, it's time that we treat it as what it is. It's an industry that needs regulations and to be held to standards of efficacy and sustainability.

Without oversight, voluntourism companies and those who go on their trips are putting the communities that they are intent on helping in danger. They're opening them up to unsustainable and unethical development practices. They turn whole towns into guinea pigs, test subjects for unskilled westerners' development daydreams. The 'save the world' mentality that voluntourism embodies is commendable, and we need fresh ideas and youthful idealism when tackling world issues.

But, we also need systematic thinking, pragmatic strategies, and thoughtful resource allocation. We need to empower local communities to manifest the change they want to see, not just the change a company half a world away decides they need.

Photo Credit: Cruise Ship.
Pippa Biddle

Pippa Biddle is a writer whose work focuses mostly on issues of voluntourism, sustainable development, and travel. She has been featured in The New York Times, The Independent, and Forbes, and is featured in the 2015 documentary "Volunteers Unleashed" (available on Amazon and iTunes). Pippa is on the Board of Onwards, a 501(c)3 organization that fights poverty through transformative adventure experiences.