‘How do I know I’m doing the right thing?’

It’s something philanthropists ask, but few have time to research the answer. As someone who advises philanthropists on their charitable giving, I know it’s a question that needs careful consideration. Otherwise there is a real risk doing more harm than good.

What if I told you that some philanthropists’ well-meaning donations, rather than solving a problem, are creating one? That their money, siphoned off by criminals, helps to fuel a system that damages children?

Welcome to the orphanage industry.

Orphanages were once seen as the best way to care for vulnerable children. Now a century of evidence has shown children only thrive in a family setting. Whether that’s through a parent, a relative, a foster parent or adoptive parent, the results are the same. Children thrive on love.

This isn’t just a platitude; as a former neuroscientist, I can tell you it’s a scientific fact. A child creates at least one million new neural connections per second. Positive interactions with a caregiver subconsciously guides these connections, promoting healthy brain development and teaching children the basics of speech, emotions and social interaction. When the attention of a family is replaced by that of employees, this healthy brain development goes awry.

No orphanage, no matter how good the facilities, staff or support given, fundamentally meets the needs of a child or results in healthy neurodevelopment. Despite this, philanthropists and volunteers actively fund them, inadvertently depriving children of the love they need to develop and fulfil their potential. Their generosity, whilst well-intentioned, deprives families and communities of the capital they need to flourish and keeps child protection systems trapped in the dark ages.

Worse still, it’s creating a financial incentive that drives families apart. Some child traffickers have recognised that children are valuable commodities to generate money. Calling themselves orphanage directors, they run an orphanage as a business, attracting international volunteers, visitors and donors, exchanging children’s health and happiness for profit.

Vulnerable families in developing countries are targeted. Parents are offered a safe home, food, a warm bed and an education for their child. Parents, feeling like they have little choice, give their child up in hope of a better life for them.

Yet that better life often never appears. Children in these orphanages are often kept in poor or malnourished conditions, to save money and encourage donors to give more. Orphanage owners can then recruit more vulnerable children – creating a vicious cycle of trafficking, exploitation and abuse.

So how can we do the right thing and support a system that works for children?

The solution lies at the heart of the problem. The vast majority of children living in orphanages – more than 80% of them – have parents who could care for them given the right support. Those who don’t could be supported through their wider family, or through foster or adoptive parents.

Children growing up in families have far better health, educational and emotional outcomes – and it’s a far more cost-effective use of philanthropic capital too. For the same cost as caring for one child in an orphanage, we could support far more children by investing in families instead.

Is a philanthropist supporting an orphanage doing the right thing? I can say with certainty that they’re not. But their desire to support vulnerable children should be celebrated. Let’s channel valuable philanthropic passion and capital into solutions that do help. Supporting children through families, not orphanages, results in happier, healthier children.

Philanthropists don’t need to give more, they simply need to give more effectively.

Allan McKinnon is the Founder and CEO of the Good Works Company, a philanthropy advisory service and donor advised fund.