Exactly What Are “Remittances” Asks empty tomb, inc. With The Definition Anything But Clear And Uniform

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Although various published sources refer to “remittances” as money sent by foreign-born residents to their families in their home countries, the commonly cited World Bank “remittances” figure includes more than monetary transfers, and as a result, empty tomb, inc. will no longer use remittances data in its future analysis of the great potential of church members to impact global needs in Jesus’ name.

Yet, using the term to describe the amount foreign-born people send to their families in their home countries is not consistent with the World Bank’s own definition of 'remittances.'

Overview. Remittances are often understood to be limited to the amount of money foreign-born people send to their families in their home countries. Statements by various organizations and even the dictionary support this understanding.

Using this definition, empty tomb, inc., has, in The State of Church Giving series, compared remittances with church member giving for international missions.

However, as reported in the new edition, The State of Church Giving through 2017 (October 2019), a 2019 review by empty tomb of remittances literature found that the definition is anything but clear or uniform. For example, the commonly cited World Bank remittances figure includes more than money transferred by foreign-born residents to their home countries. The World Bank figure also includes in-kind transfers, income, and other categories.

As a result of its 2019 review of remittances literature, empty tomb will no longer use a comparison of remittances with church people’s international missions giving in its church giving analysis.

empty tomb continues, however, to point to the potential of church members to show increased concern for global needs by giving more through their church channels. This potential exists independently of the definition of the remittances figure.

Common Understanding of “Remittances.” Statements such as the following demonstrate how the term “remittances” has been understood and used.

A 2010 report by the Hudson Institute, The Index of Global Philanthropy and Remittances 2010, describes the importance of remittances: “They are important both because they provide a lifeline for many poor families by facilitating the purchase of food, education, housing and medical care, and because they exceed Official Development Assistance (ODA) and private philanthropy to the developing world.” The report goes on to describe the impact of remittances in several studies of “remittance-receiving households” in Ethiopia, Burkina Faso, Ghana, and Mexico. The report uses World Bank data to estimate the amount of remittances leaving the U.S. in 2008 at $96.8 billion. [1]

A December 18, 2015, World Bank press release announced, “In a demonstration of their economic footprint, international migrants will send $601 billion to their families in their home countries this year, with developing countries receiving $441 billion …. The United States was the largest remittance source country …” [2]

Webster’s Third New International Dictionary (1993) definition of a “remittance” is: “1 a: a sum of money sent to another person or place … 2 : transmittal of money (as to a distant place).” [3]

The Organisation for Economic Co-operation and Development (OECD) is an international intergovernmental economic organization. In 2018, the OECD cited the Hudson Institute’s The Index of Global Philanthropy and Remittances series as a source for information on global philanthropy and remittances, which the OECD refers to as “(donations by individuals outside of philanthropic structures)” as distinct from “non-monetary contributions (e.g. in-kind donations and volunteering).” [4]

The Hudson Institute’s 2013 report described remittances as being from “individuals, families, and hometown associations in the United States to developing countries.” [5]

A contact at the Hudson Institute referred empty tomb, inc., to the World Bank Bilateral Matrix for the source of the remittance numbers in the Hudson Institute reports. [6]

For the 2015-2018 editions of The State of Church Giving series, empty tomb, inc. used the Bilateral Matrix numbers as the source to calculate foreign-born remittances from the U.S. sent to developing countries. The calculation was based on the understanding that remittances are monetary transfers sent by foreign-born individuals in the U.S. to their families in their home countries.

But “Remittances” Literature Definition Cloudy. A 2019 review of remittances literature by empty tomb, inc., has led the organization to conclude that the often-cited World Bank Bilateral Matrix numbers include more than money sent by foreign-born people to their families in their home countries. The World Bank Web site includes the definition: “Personal remittances is the sum of personal transfers and compensation of employees.” The personal transfers component is a “broader definition of worker remittances …” and includes both cash (the common understanding of remittances) and in-kind transfers. [7]

Further research found that a 2010 paper by the U.S. Census Bureau concluded:
“… there is no single, standard definition of remittances, and authors and organizations have used the term to discuss a variety of resources: from cash exchanges only; to cash and ‘in-kind’ transfers (e.g., goods and services); to cash and in-kind transfers plus compensation to employees (e.g., wages, salaries); to cash and in-kind transfers, compensation to employees, and capital transfers of financial assets; to even more complex measures that include social benefits and transfers to non-profits …” [8]

The paper describes its 2008 Census Bureau survey that limited the definition of remittances to “monetary transfers.” The resulting dollar figure of $10.5 billion [8] contrasts with the Hudson Institute’s estimate of $96.8 billion in 2008 remittances, based on World Bank data (see source [1]).

The U.S. Government Accountability Office also wrote a February 2016 “Report to Congressional Requesters” titled, “International Remittances: Actions Needed to Address Unreliable Official U.S. Estimate.” The report concluded that the U.S. Bureau of Economic Analysis’ process to estimate remittances “… is not consistent with government-wide policies and guidance on statistical practices or with BEA’s own best practices …” and thus produces “… unreliable estimates.” [9]

A 2019 inquiry from empty tomb to the World Bank, asking how much of the 2016 Bilateral Matrix figure of $138.165 billion from the U.S. was from Personal Transfers and how much from Compensation of Employees, went unanswered.

The conclusion is that the term “remittances” is not being uniformly used. Entities cited above use World Bank data while describing “remittances” as cash transfers from foreign-born people to their families in their home countries.

The entities include the World Bank itself, as noted in the December 18, 2015, press release cited above that declared, “… international migrants will send $601 billion to their families in their home countries this year …” (see source [2]).

Yet, using the term to describe the amount foreign-born people send to their families in their home countries is not consistent with the World Bank’s own definition of “remittances.” To produce the Total Remittances figures used by these and other entities, the World Bank’s Bilateral Matrix uses the broad definition that includes personal transfers (monetary and in-kind, per source [7]), adjusted compensation of employees, capital transfers, and the category of “social benefits.” [10]

Therefore, in its reports, empty tomb, inc., no longer plans to use remittances data in comparison with potential increased church member giving to other countries for global needs.

The use of remittance data in empty tomb reports did, however, focus the question of how much church members in the U.S. could increase giving to address, in Jesus’ name, global needs. The potential increase in the giving figure calculated for 2016 was that 6% of church members’ incomes would yield an additional $368 billion for addressing global needs through church structures. The $368 billion would have been an increase from the estimate of about $14.6 billion in 2016 spent through church channels for global missions. At 6% of U.S. per capita Disposable (after-tax) Personal Income, the 2017 figure would have been $428 billion in addition to the estimated $15.2 billion spent in 2017 on religious international giving.

This calculation of potential giving by church members remains based on the fact that church members are living in an unprecedented era of affluence. Church members could, if they chose, give an increased percent of their U.S. per capita incomes for international missions. The calculation, and that potential, is independent of how remittances are defined. The lack of comparison with another group of people’s spending patterns only means that church members will need to step out in this age of affluence in a fresh way at this point in history, setting a new standard for generosity heretofore not seen.

The State of Church Giving through 2017, the 29th edition (October 2019), is available for pre-order from Wipf and Stock Customer Service by phone at 541-344-1528 or orders@wipfandstock.com. For more information, contact empty tomb at (217) 356-9519.

Sources:
[1]    Dr. Carol Adelman, et al..; The Index of Global Philanthropy and Remittances 2010; Hudson Institute, Washington, DC; 2010; https://scholarworks.iupui.edu/handle/1805/15813; pp. 59, 63, 12, 71 of 6/6/2010 download.
[2]    World Bank; “International Migration at All-Time High”; 12/18/2015; https://www.worldbank.org/en/news/press-release/2015/12/18/international-migrants-and-remittances-continue-to-grow-as-people-search-for-better-opportunities-new-report-finds; p. 1 of 6/12/2019 11:09 AM printout.
[3]    Philip Babcock Gove, editor, et al., Webster’s Third New International Dictionary, Unabridged (Merriam-Webster, 1993), p. 1920.
[4]    OECD; Private Philanthropy for Development; Revised version, May 2018; https://www.oecd-ilibrary.org/sites/9789264085190-5-en/index.html?itemId=/content/component/9789264085190-5-en; p. 3 of 6/28/2019 11:54 AM printout.
[5]    Yulya Spantachak, et al.; The Index of Global Philanthropy and Remittances 2013, With a Special Report in Emerging Economies; Hudson Institute, Washington, D.C.; 2013; http://www.hudson.org/content/researchattachments/attachment/1229/2013_indexof_global_philanthropyand_remittances.pdf; p. 10 of 1/31/2014 printout.
[6]    For example: World Bank Bilateral Remittance Matrix: “Bilateral Remittance Estimates for 2016 using Migrant Stocks, Host Country Incomes, and Origin Country Incomes (millions of US$) (November 2017 Version)”; World Bank Group; November 2017; downloaded 8/16/2018; Supriyo De, World Bank, email, attachment ‘bilateralremittancematrix 2016_Nov2017.xlsx’ 8/16/2018 3:10 PM CDT, since URL server IP address could not be found:
https://www.worldbank.org/en/topic/migrationremittancesdiasporaissues/brief/migration-remittances-data; pp. 1-16 of 8/19/2018 printout.
[7]    "How do you define remittances?"; The World Bank; Help Desk: Data; https://datahelpdesk.worldbank.org/knowledgebase/articles/114950-how-do-you-define-remittances; p. 1 of 6/7/2019 5:45 PM printout.
[8]    Elizabeth M. Grieco, Patricia de la Cruz, Rachel Cortes, and Luke Larsen; Immigration Statistics Staff; “Working Paper No. 87; Who in the United States Sends and Receives Remittances? An Initial Analysis of the Monetary Transfer Data from the August 2008 CPS Migration Supplement”; Population Division, U.S. Census Bureau; created 10/26/2010 and modified 11/6/2013; https://www.census.gov/content/dam/Census/library/working-papers/2010/demo/POP-twps0087.pdf; pp. 2, 21-22 of 6/7/2009 printout.
[9]    “International Remittances, Actions Needed to Address Unreliable Official U.S. Estimate”; U.S. Government Accountability Office Report to Congressional Requesters, GAO-16-60; February 2016; http://www.gao.gov/assets/680/675248.pdf; p. 21 of 6/7/2019 printout.
[10]    Dilap Ratha, Sonia Plaza, and Ervin Servisevic; “Data Notes,” Migration and Remittances Factbook 2016, Third Edition; World Bank Group; created 4/28/2016 and modified 4/29/2016; https://openknowledge.worldbank.org/bitstream/handle/10986/23743/9781464803192.pdf?sequence=3&isAllowed=y; p. xvii of 7/8/2019 download.

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