Almost no part of economic, social, work or educational life has remained untouched by the internet, and it turns out charities that might once have been beneficiaries now are being disintermediated.
In some ways, social fundraising sites were a progenitor, allowing people or organizations to raise donations on social fundraising platforms. But one new development involves people making Airbnb reservations in Ukraine--with no intention to stay--as a form of direct aid that otherwise might have been delivered using a charitable donation process.
That sort of giving is another form of disintermediation, the process of removing “middle men” or distributors, steps or layers or retailers from a supply chain.
Airbnb CEO Brian Chesky says 434,000 such transactions had been booked so far on the platform, equivalent to $15 million transferred to hosts within Ukraine. By way of contrast, that is as much as a quarter of the amount donated to the Canadian Red Cross as of March 10, 2022, excluding government-matched amounts.
What remains unknown is the relative effectiveness of direct transfers of this sort. As with other social fundraising, recipient fraud or waste is conceivable: the property owners might not live in Ukraine, for example. And cash transfers of this type assume the banking system is working. It might not be working effectively, if at all.
Such donations might not target the most needy. But such methods are nearly 100 percent efficient--getting all the funds directly to the recipients--instead of subtracting distributor costs.
It will be some time before we see any relatively-impartial studies and assessments of such direct giving mechanisms. But for cleverness it is hard to fault. When such transfers can be cleared nearly immediately, there is probably no faster way to inject donations into an area.
Longer term, there might be issues around whether direct giving is advantageous in some ways for allowing recipients to determine the best use of the funds, rather than aid agencies deciding what is best for them.
But accountability issues might still be of value for some donors. Higher confidence that donations were used for a specified purpose might be valuable enough to dissuade donors from direct giving methods.
Still, using Airbnb to make donations is clearly a case of disintermediation at work.
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