Private charity fails to replace social programs

As I've noted before, charitable giving is "pro-cyclical," meaning it decreases during a bad economy when it's needed most.  

Hiltzik also points out that very little of charitable giving is aimed at the needs of the poor; and the rich are more miserly givers than the rest of us:

The smallest allocation of philanthropic giving to basic needs of the poor was made by the wealthiest donors, those with income of $1 million of more, who directed 3.8% of their giving directly to the poor. For the $100,000-$200,000 income group, that allocation was 12.4%.

"The existing evidence doesn't support the idea that wealthy donors will step in" to replace government transfer programs, says Rob Reich, an expert in philanthropy at Stanford. As he wrote last year, "Philanthropy appears to be more about the pursuit of one's own projects, a mechanism for the expression of one's values or preferences rather than a mechanism for redistribution or relief for the poor."

The largest single recipient of philanthropy is religion — 32% of the total, according to Giving USA. But only a small portion of that goes to outreach to the needy; more than three-quarters of donations to religious organizations is spent on "congregational operations," including facilities upkeep.

So here's the upshot:

What all this shows is that there's an unspoken subtext when people like [Representative Paul] Ryan complain, as he did during the 2012 presidential campaign, about "cold social programs from the federal Department of Health and Human Services" built by a government that "took away much of our greatness."

Ryan is evoking a golden-hued fairy tale of a past that never existed. In the real world today, those "cold social programs" from HHS and other federal agencies keep people fed and housed, and alive, and give their children opportunity.

Private charity can't replace government social programs

By Michael Hiltzik

March 30, 2014 | Los Angeles Times

URL: http://www.latimes.com/business/la-fi-hiltzik-20140330,0,1556558.column#ixzz2xRw4lXl7

Studies: Wealth makes us less generous

According to professor Dacher Keltner, "In just about every way you can study it, our lower-class individuals volunteer more, they give more of their resources — they're more generous."

Whaddya know?  Yet more evidence that wealth changes people for the worst.

As We Become Richer, Do We Become Stingier?

By Shankar Vedantam

September 3, 2013 | NPR

URL: http://n.pr/19fNorK

The unglorious truth about rapid economic development

About a month ago, I forwarded to several friends in the development biz this op-ed written by Zack Exley in reply to a controversial op-ed by scion Peter Buffett against charitable "conscience laundering," i.e. the $316 billion annual "business" of philanthropy.

I asked for their reactions.  I got none.

Now I think I know why.  Because it makes development professionals seem inconsequential. For that matter, it makes the World Bank, NGOs, and a lot of economic literature seem inconsequential.

Here's Exley's "secret" to how poor developing countries in the 20th century became rich and developed [emphasis mine]:

How did they pull billions out of poverty so quickly? Unfortunately, the answer is totally unfashionable and will never, ever be discussed at hipster social venture forums. They all had one thing in common: the people in charge -- whether they were social democrats, conservative nationalists, communists or military dictators -- carried out programs of rapid economic development designed to give most people access to means of making a living.

But how did that do that? They built factories, railroads, universities and everything else required to make the things and do the things that go into a decent living (or were valuable enough to trade for them). Communists and dictatorships used various forms of force -- often brutal. Democrats and republicans (small d and small r) used the market and public-private partnerships. By hook or by crook, wherever eliminating poverty was one of the top few national priorities, it was eliminated.

You know, I can't think of a single counter example.  I can't think of a single country that sincerely tried to invest in rapid economic expansion and failed to achieve it. The agent isn't important, it's the action. The action always works.    

In international development, we're always chipping away at the edges, dealing with obstinate or corrupt bureaucrats and elected officials who won't take our advice, donor agencies engaged in external turf battles and internal pissing matches, and apathetic communities who don't believe in us, or believe that their leaders will listen to us.  And yet to effect massive, dramatic economic development, donors don't matter.  It's the "locals" (to use the condescending development vernacular) that must be onboard, from the small towns up to the president or prime minister. And when that happens, so do economic miracles. 

Ideology and political economy seem irrelevant, I hate to say it.  

Go ahead, somebody prove me wrong!  

The Unglamorous Truth About Ending Poverty

By Zack Exley

July 29, 2013 | Huffington Post

URL: http://huff.to/1c6FnK7