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Giving, charity, tithing
Topic: Giving, charity, tithing (Read 4123 times)
Giving, charity, tithing
January 17, 2010, 07:55:07 AM »
By NICHOLAS D. KRISTOF
Published: January 16, 2010
Want to be happier in 2010? Then try this simple experiment, inspired by recent scholarship in psychology and neurology. Which person would you rather be:
Richard is an ambitious 36-year-old white commodities trader in Florida. He’s healthy and drop-dead handsome, lives alone in a house with a pool, and has worked his way through a series of gorgeous women. Richard’s job is stressful, but he spent Christmas in Tahiti. Unencumbered, he also has time to indulge such passions as reading (right now he’s finishing a book called “Half the Sky”), marathon running and writing poetry. In the last few days, he has been composing an elegy about the Haiti earthquake.
Lorna is a 64-year-old black woman in Boston. She’s overweight and unattractive, even after a recent nose job. Lorna is on regular dialysis, but that doesn’t impede her active social life or babysitting her grandchildren. A retired school assistant, she is close to her 67-year-old husband and is much respected in her church for directing the music committee and the semiannual blood drive. Lorna believes in tithing (giving 10 percent of her income to charity or the church) and in the last few days has organized a church drive to raise $10,000 for earthquake relief in Haiti.
I adapted those examples from ones that Jonathan Haidt, a psychology professor at the University of Virginia, develops in his fascinating book, “The Happiness Hypothesis.” His point is that while most of us might prefer to trade places with Richard, Lorna is probably happier.
Men are no happier than women, and people in sunny areas no happier than people in chillier climates. The evidence on health is complex, but even chronic health problems (like those requiring dialysis) may have surprisingly little long-term effect on happiness, because we adjust to them. Beautiful people aren’t happier than ugly people, although cosmetic surgery does seem to leave patients feeling brighter. Whites are happier than blacks, but only very slightly. And young people are actually a bit less happy than older folks, at least up to age 65.
Lorna has a few advantages over Richard. She has less stress and is respected by her peers — factors that make us feel good. Happiness is tied to volunteering and to giving blood, and people with religious faith tend to be happier than those without. A solid marriage is linked to happiness, as is participation in social networks. And one study found that people who focus on achieving wealth and career advancement are less happy than those who focus on good works, religion or spirituality, or friends and family.
“Human beings are in some ways like bees,” Professor Haidt said. “We evolved to live in intensely social groups, and we don’t do as well when freed from hives.”
Happiness is, of course, a complex concept and difficult to measure, and John Stuart Mill had a point when he suggested: “It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied.”
But in any case, nobility can lead to happiness. Professor Haidt notes that one thing that can make a lasting difference to your contentment is to work with others on a cause larger than yourself.
I see that all the time. I interview people who were busy but reluctantly undertook some good cause because (sigh!) it was the right thing to do. Then they found that this “sacrifice” became a huge source of fulfillment and satisfaction.
Brain scans by neuroscientists confirm that altruism carries its own rewards. A team including Dr. Jorge Moll of the National Institutes of Health found that when a research subject was encouraged to think of giving money to a charity, parts of the brain lit up that are normally associated with selfish pleasures like eating or sex.
The implication is that we are hard-wired to be altruistic. To put it another way, it’s difficult for humans to be truly selfless, for generosity feels so good.
“The most selfish thing you can do is to help other people,” says Brian Mullaney, co-founder of Smile Train, which helps tens of thousands of children each year who are born with cleft lips and cleft palates. Mr. Mullaney was a successful advertising executive, driving a Porsche and taking dates to the Four Seasons, when he felt something was missing and began volunteering for good causes. He ended up leaving the business world to help kids smile again — and all that makes him smile, too.
So at a time of vast needs, from Haiti to our own cities, here’s a nice opportunity for symbiosis: so many afflicted people, and so much benefit to us if we try to help them. Let’s remember that while charity has a mixed record helping others, it has an almost perfect record of helping ourselves. Helping others may be as primal a human pleasure as food or sex.
Last Edit: August 24, 2011, 09:02:44 PM by Crafty_Dog
The DOs and DON'Ts of Disaster Donations
Reply #1 on:
January 17, 2010, 10:00:07 AM »
Most people would rather be Richard really ? All things being equal I would rather be attractive than not and healthy than sick but Lorna's life sounds a million times better.
The previous article reminds of something my mother says those you seek to be happy will not be those who seek to serve will be happy.
Great Thread!!! You had a similar one but I like this title better.
The DOs and DON'Ts of Disaster Donations
Do look at a variety of agencies before giving
There are hundreds of agencies that respond to a disaster, take the time to evaluate a few before giving, just because they have name recognition does not mean they're best able to respond to the disaster. Look for organizations operating in the country before the disaster. They will be better able to respond quicker and know the local culture, politics, and needs better. Giving to local organizations is great, unfortunately they can be difficult to find and may not have a website or if they do it may not be in English. Places to find lists of agencies involved in the recovery efforts include:
InterAction for some US agencies
Reliefweb.int for agencies from many different countries
Do look for organizations with prior experience and expertise
There is a great deal of money after well publicized disasters. The ease of raising money makes it tempting to respond even if the organization does not have prior experience in that area. After the tsunami many organizations with no prior experience built boats or houses. I attended one handover ceremony where the boats actually sank during the ceremony because they weren't properly sealed. There is a steep learning curve when agencies move out of their normal work, this may lead to mistakes and wasted money. Make sure the organization has prior experience in their proposed projects.
Don't donate to a project just because it's "sexy"
Recovery projects that are inherently attractive to donors - such as orphanages or boats - are easier to fund but may not be what is most needed. After the tsunami orphanages were built in excess of what was really needed, I had an orphanage approach me looking for orphans to house. Because so much money was given to orphanages in Indonesia some families resorted to abandoning their children at orphanages because they could not feed and clothe them. It would have been far better for the donations to support the family so they could care for their children themselves. Boats were also heavily funded leading to far more boats built than were actually lost and a real concern for over fishing.
Don't earmark funds
The organization is on the ground and has a far better idea of what is needed the most. Earmarking funds may force the organization to spend money where it's not needed and keep it from spending money where it's need the most. After the tsunami in Thailand an organization had money earmarked for two semi's of rice, by the time they arrived in the area 4 months after the tsunami shipments of rice were no longer needed. Because the money had been earmarked the organization had to contact a number of donors to get permission to use the money in different ways. If you trust the organization allow them to make professional decisions on how to best use your donation, if you don't trust them then find another organization to donate to.
Don't evaluate an organization based on the amount spent on administration cost
The amount an organization spends on administration is no indication of its quality. The pressure to keep administration costs low may lead to organizations understaffing their projects so the aid workers don't have the time they need to work closely with aid recipients and government offices, hiring unqualified staff that may not have the skills to do their job, not equipping their staff with the tools and resources to do their job well, or focusing on inherently cheaper programs even if they are not what is most needed. In addition what is recorded as project costs and administration costs are fungible. It's better to look at last year's financial audits and previous project evaluations.
Do ensure that the agency is legitimate before giving
After the tsunami there were several fake charities created, in Thailand someone came around to one of the permanent housing area and took photos and then posted them as their own. Donors should verify that the nonprofit is real before giving. Google the exact name - be careful that they haven't used a name that is almost identical to a well known charity - if the organization has been in operation for a while there should be other links to conferences their staff have attended, newspaper articles written about them, etc...
Don't expect the funds to be spent immediately
The initial relief phase encompasses search and rescue, initial medical care, food, water and shelter. After that the much longer recovery and reconstruction phase begins. Organizations that feel pressure from donors to complete their work quickly may try to speed their work by cutting corners, leave aid recipients out of the decision making process, avoiding coordinating with other organizations, or end projects before they're able to survive on their own. In Thailand there were numerous instances of houses being built before the land title was clear causing them to go into litigation with some families being at risk of loosing their houses a few years later. Allow the organizations adequate time to ensure they are providing help in the best way possible.
Do consider holding off some of your donations until later in the rebuilding process
Immediately after a disaster is prime fundraising time for nonprofits, appeals are issued before there’s any clear idea of what is needed or how much they can actually help. If an organization receives more money than it can use for the type of assistance it provides it has one of four options. It can divert the excess funds to other programs in other countries, it can provide assistance in excess of what is needed, it can move out of its area of expertise and do other projects it's not as skilled it, it can subcontract other agencies to work in other areas. Rebuilding after a disaster takes years, waiting a few weeks or months before donating everything you plan to give will allow you to make additional funding decisions once the situation on the ground is clearer.
Don't take up a collection of goods to send over
After the tsunami tons of used clothing were donated, much of it inappropriate to the climate and culture. There were winder hats, coats and gloves donated to southern Thailand and mountains of donated clothing dumped beside the road in India. Donated goods can also clog ports preventing more immediate relief items from getting through. Ports can only hold and process so many goods and often the port authorities have difficulty sorting through everything arriving to get it processed and out the doors. Please do not take up collections of medicine, clothing, baby formula, or food for shipment, or show up on your own to hand out money or goods. Although well intentioned, this can actually make the situation worse as it adds to the confusion, diverts resources, and may lead to aid dependency.
Don't go over individually to volunteer
Many people want to be able to volunteer to help in the recovery efforts, however unless you have a specific skill, and speak the language there is often very little the individual can contribute that local people could not do, and perhaps get paid to do.
Even if you have a specialized trade such as a doctor or an architect your credentials may not be recognized in that country. In addition you will likely not find an international charity able to take you on for liability reasons and the fact that you don't have prior disaster experience and training. Small local organizations may be willing to risk using volunteers, but their need is for website developers, grant writers, and other office jobs. Your chances of working in the villages are small unless you speak the language and understand the culture.
--- Haiti specific information ---
from @Kiwanja - Help is needed @ushahidi to process and log incoming SMS reports. Can be done from anywhere online.
From Alanna Shaikh in her guest post on AidWatch - "If you are a nurse or physician, especially with experience in trauma, and you want to volunteer, email Partners in Health –
– and offer your services. Or submit your details to International Medical Corps.
Do consider donating an equal amount of money to disaster preparedness programs.
Programs that help communities prepare for and respond to disasters save more lives and are more cost effective than large rescue operations after the disaster. This becomes even more important with the increasing rate of natural disasters. After each disaster the first people to respond are always neighbors, friends, family, and local disaster response teams. Consider donating to organizations in other countries - or even your own home town - that help communities prepare for and respond to future disasters.
Don't assume there is a body overseeing and regulating the ai
Most people assume that some entity, probably the UN, oversees international aid to ensure that it’s well done and getting where it is most needed. In reality the UN has no direct control over nonprofits, making it difficult to coordinate the relief efforts and ensure all the aid provided is appropriate an well done. Two attempts to create a regulatory body, once under the UN and once under the League of Nations that proceeded the UN, have failed. Without this it is up to the government to monitor and control the flood of assistance into their country. This can be impossible for many local governments after a disaster. The best way to stop ineffectual or bad aid is to only donate to organizations that you are certain are competent and skilled at their work.
Do take the time to make informed decisions
Take the time to understand the situation and make educated donor decisions. There are many resources here to help you do that. Your decision as to which nonprofits receive your donations has an impact on the relief, recovery, and reconstruction.
Re: Giving, charity
Reply #2 on:
January 26, 2010, 05:22:53 AM »
A couple of years ago my wife and I have been blessed to have formed a non-profit organization dedicated to providing food/nutrition to starving or needy children. I"m not requesting that you guys research any of this, just that if you happen to have any contacts please pass this along. Nutrisave is a non-profit but is NOT seeking donations at this time.
Currently we have allocated yet still undistributed modest funding (under US$250K at this time with possibly a duplicate allocation in February or March) specifically (narrowly) tagged to be used as follows:
1. Nutrisave will underwrite costs relating to emergent air transportation for Haitian orphans under various expidited visas directly to approved sponsoring U.S. organization and or adoptive parents who are U.S. citizens. (Approved funds to be distributed directly to airlines. Organizations and/or indiviiduals 'receiving' children must meet security and solvency requirements.)
2. Nutrisave will procure food and/or medical supplies which are formulated/manufactured specifically for the use of children birth-5 years of age for Haitian groups that can detail their ability to realize delivery of these items securely from Port AP airport to specific internal destinations (such as orphanages or schools for example).
Funding iis limited and subject to prior distribution.
Re: Giving, charity
Reply #3 on:
June 16, 2010, 11:25:11 AM »
To me it depends on what they are giving to. Gates is a globalist. What we really need is more jobs and in the US people willing to work. Is better tasting malaria pills such a great thing?"
***June 16, 2010, 7:00 am
The $600 billion challenge
Bill Gates, Melinda Gates, and Warren Buffett are asking the nation's billionaires to pledge to give at least half their net worth to charity, in their lifetimes or at death. If their campaign succeeds, it could change the face of philanthropy.
Flying cross-country in March, Bill Gates stopped in Omaha to lunch near the airport with Warren Buffett at a Hollywood Diner, giving it a small place in history as one venue where the two made plans for their drive to boost giving. Buffett paid for lunch. Click on the photo for more pictures.
By Carol J. Loomis, senior editor-at-large
FORTUNE -- Just over a year ago, in May 2009, word leaked to the press that the two richest men in America, Bill Gates and Warren Buffett, had organized and presided over a confidential dinner meeting of billionaires in New York City. David Rockefeller was said to have been a host, Mayor Michael Bloomberg and Oprah Winfrey to have been among those attending, and philanthropy to have been the main subject.
Pushed by the press to explain, Buffett and Gates declined. But that certainly didn't dim the media's interest in reaching for descriptions of the meeting: The Chronicle of Philanthropy called it "unprecedented"; both ABC News and the Houston Chronicle went for "clandestine"; a New York magazine parody gleefully imagined George Soros to have been starstruck in the presence of Oprah. One radio broadcaster painted a dark picture: "Ladies and gentlemen, there's mischief afoot and it does not bode well for the rest of us." No, no, rebutted the former CEO of the Bill & Melinda Gates Foundation, Patty Stonesifer, who had been at the meeting and had reluctantly emerged to combat the rumors. The event, she told the Seattle Times, was simply a group of friends and colleagues "discussing ideas" about philanthropy.
And so it was. But that discussion -- to be fully described for the first time in this article -- has the potential to dramatically change the philanthropic behavior of Americans, inducing them to step up the amounts they give. With that dinner meeting, Gates and Buffett started what can be called the biggest fundraising drive in history. They'd welcome donors of any kind. But their direct target is billionaires, whom the two men wish to see greatly raise the amounts they give to charities, of any and all kinds. That wish was not mathematically framed at the time of the New York meeting. But as two other U.S. dinners were held (though not leaked), Buffett and Gates and his wife, Melinda, set the goal: They are driving to get the super-rich, starting with the Forbes list of the 400 wealthiest Americans, to pledge -- literally pledge -- at least 50% of their net worth to charity during their lifetimes or at death.
Without a doubt, that plan could create a colossal jump in the dollars going to philanthropy, though of what size is a puzzle we'll get to. To begin with, a word about this article you are reading. It is the first public disclosure of what Buffett and Melinda and Bill Gates are trying to do. Over the past couple of months Fortune has interviewed the three principals as the project has unfolded, as well as a group of billionaires who have signed up to add their names to the Gates/Buffett campaign.
In a sense this article is also an echo of two other Fortune stories, both featuring Buffett on the cover. The first, published in 1986, was "Should you leave it all to the children?" To that query, Buffett emphatically said no. The second article, "Warren Buffett gives it away," which appeared in 2006, disclosed Buffett's intention to gradually give away his Berkshire Hathaway (BRK.A) fortune to five foundations, chief among them the world's largest, the Bill & Melinda Gates Foundation. (For Buffett's thinking on the disposition of his wealth, see "My philanthropic pledge.")
Since then, in four years of contributions, Buffett has given the foundation $6.4 billion, not counting the 2010 gift, to be made this summer. The foundation in turn has in that same period combined Buffett's money and its immense gifts from the Gateses to raise its level of giving to about $3 billion a year, much of it for world health. One small example: the Medicines for Malaria Venture, heavily funded by the Gates Foundation, has worked with pharmaceutical company Novartis (NVS) to develop good-tasting malaria pills and distribute them to millions of children -- the principal victims of the disease -- in 24 countries.
Another fact about the 2006 Buffett article is that it was written by yours truly, Carol Loomis, a senior editor-at-large of Fortune. Besides that, I am a longtime friend of Buffett's and editor of his annual letter to Berkshire's shareholders. Through him, my husband, John Loomis, and I have also come to know Melinda and Bill Gates socially. The Loomis team has even occasionally played bridge against Warren and Bill.
LOOK WHO CAME TO DINNER: The crowd at the inaugural event added up to a list that would make any charity – or any conspiracy theorist – swoon. Left to right: Bill Gates, Oprah Winfrey, Warren Buffett, Eli and Edythe Broad, Ted Turner, David Rockefeller, Chuck Feeney, Michael Bloomberg, George Soros, Julian Robertson, John and Tashia Morgridge, Pete Peterson
All that said, the question of what philanthropy might gain from the Gates/Buffett drive rests, at its outset, on a mystery: what the wealthiest Americans are giving now. Most of them aren't telling, and outsiders can't pierce the veil. For that matter, the Forbes 400 list, while a valiant try, is a best-guess estimate both as to the cast of characters and as to their net worth. (Buffett says he knows of two Berkshire shareholders who should be on the list but have been missed.) As Bill Gates sums it up, "The list is imprecise."
Those qualifiers noted, the magazine stated the 2009 net worth of the Forbes 400 to be around $1.2 trillion. So if those 400 were to give 50% of that net worth away during their lifetimes or at death, that would be $600 billion. You can think of that colossal amount as what the Buffett and Gates team is stalking -- at a minimum.
Leaving aside the Forbes 400 and looking simply at Internal Revenue Service data for both annual giving and estate taxes, we can piece together a picture of how far the very rich might be from a figure like that $600 billion. Start with an admirable fact about Americans as a whole: The U.S. outdoes all other countries in philanthropic generosity, annually giving in the neighborhood of $300 billion.
Some of that gets reported as charitable deductions on the tax filings made by individuals. But taxpayers at low income levels don't tend to itemize, taking the standard deduction instead. At higher income levels, charitable gift data begin to mean something. To take one example for 2007 (the latest data available), the 18,394 individual taxpayers having adjusted gross income of $10 million or more reported charitable gifts equal to about $32.8 billion, or 5.84% of their $562 billion in income.
And billionaires? Here, the best picture -- though it's flawed -- emerges from statistics that the IRS has for almost two decades been releasing on each year's 400 largest individual taxpayers, a changing universe obviously. The decision of the government to track this particular number of citizens may or may not have been spurred by the annual publication of the Forbes list. In any case, the two 400 batches, though surely overlapping, cannot be identical -- for one reason because the IRS data deal with income, not net worth.
The IRS facts for 2007 show that the 400 biggest taxpayers had a total adjusted income of $138 billion, and just over $11 billion was taken as a charitable deduction, a proportion of about 8%. The amount deducted, we need quickly to add, must be adjusted upward because it would have been limited for certain gifts, among them very large ones such as Buffett's $1.8 billion donation that year to the Gates Foundation. Even so, it is hard to imagine the $11 billion rising, by any means, to more than $15 billion. If we accept $15 billion as a reasonable estimate, that would mean that the 400 biggest taxpayers gave 11% of their income to charity -- just a bit more than tithing.
Is it possible that annual giving misses the bigger picture? One could imagine that the very rich build their net worth during their lifetimes and then put large charitable bequests into their wills. Estate tax data, unfortunately, make hash of that scenario, as 2008 statistics show. The number of taxpayers making estate tax filings that year was 38,000, and these filers had gross estates totaling $229 billion. Four-fifths of those taxpayers made no charitable bequests at death. The 7,214 who did make bequests gave $28 billion. And that's only 12% of the $229 billion gross estate value posted by the entire 38,000.
All told, the data suggest that there is a huge gap between what the very rich are giving now and what the Gateses and Buffett would like to suggest is appropriate -- that 50%, or better, of net worth. The question is how many people of wealth will buy their argument.
Buffett, Gates, and Gates -- who have a combined net worth of around $100 billion -- have already committed most of their money to charity.
The seminal event in this campaign was that billionaires' gathering in May 2009 -- the First Supper, if you will. The Gateses credit Buffett with the basic idea: that a small group of dedicated philanthropists be somehow assembled to discuss strategies for spreading the gospel to others. The Gateses proceeded to arrange the event. Bill Gates says, with a grin, "If you had to depend on Warren to organize this dinner, it might never have happened." In his office, meanwhile, Buffett scrawled out a name for a new file, "Great Givers."
The first item filed was a copy of a March 4 letter that Buffett and Gates sent to the patriarch of philanthropy, David Rockefeller, to ask that he host the meeting. Rockefeller, now 95, told Fortune that the request was "a surprise but a pleasure." As a site for the event, he picked the elegant and very private President's House at Rockefeller University in New York City, whose board he has been on for 70 years. He also tapped his son David Jr., 68, to go with him to the meeting.
The event was scheduled for 3 p.m. on Tuesday, May 5 -- a day urgently desired by Bill Gates, who wanted to fit the meeting into a short U.S. break he'd be taking from a three-month European stay with his family. Because Melinda elected to remain in Europe with their three children, she did not attend the first dinner, but lined herself up for any that followed. (The Gateses have considered this campaign to be a personal matter for them, not in any way a project of the Gates Foundation.)
Melinda also insisted from the start that both husbands and wives be invited to the dinners, sure that both would be important to any discussion. Her reasoning: "Even if he's the one that made the money, she's going to be a real gatekeeper. And she's got to go along with any philanthropic plan, because it affects her and it affects their kids."***
WSJ: Tea Partiers and the spirit of giving
Reply #4 on:
December 24, 2010, 01:04:31 PM »
By ARTHUR C. BROOKS
By now everyone knows that the dramatic November election was not an endorsement of Republicanism, but rather a rebellion against expansionist government and an attempt to re-establish America's culture of free enterprise.
The tea party activists behind the wave—and more importantly, the nearly one-third of Americans who classify themselves as "supporters" of the movement, according to Gallup—endure endless abuse from the politicians they have dethroned and the pundits they have challenged. One particular line of attack focuses on their supposed selfishness.
It is common to hear that the popular uprising against the growth of the welfare state, with rising taxes and deficits, is based on a lack of caring toward those who are suffering the most in the current crisis. As soon-to-be ex-House Speaker Nancy Pelosi puts it, the tea party is working "for the rich instead of for the great middle class." Others have asserted that the backlash against the growth of government is nothing more than an attack on the poor.
Few would disagree that free enterprise is grounded in one's self-interest. But self-interest is not the same thing as selfishness in the sense of unbounded consumption or disregard for the less fortunate. In fact, the millions of Americans who advocate for private entrepreneurship and limited government—whether they are rich or poor—may be stingy when it comes to giving away other people's money through state redistribution, but they are surprisingly generous when it comes to giving away their own money privately.
Americans in general are very charitable, by international standards. Study after study shows that we privately give multiples of what our Social Democratic friends in Europe donate, per capita. But not all Americans are equally generous. One characteristic of givers is especially important in the current debate: the opinion that the government should not redistribute income to achieve greater economic equality.
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.Consider the answer to the question, "Do you believe the government has a responsibility to reduce income differences between rich and poor?" Many surveys have asked this over the years. In 2006, the International Social Survey Programme (ISSP) found that Americans were almost equally divided on this question (52% in favor, 48% against). This is in stark contrast to the Europeans. For example, 94% of the Portuguese in the 2006 ISSP survey were in favor of redistribution; only 6% were against.
When it comes to voluntarily spreading their own wealth around, a distinct "charity gap" opens up between Americans who are for and against government income leveling. Your intuition might tell you that people who favor government redistribution care most about the less fortunate and would give more to charity. Initially, this was my own assumption. But the data tell a different story.
The most recent year that a large, nonpartisan survey asked people about both redistributive beliefs and charitable giving was 1996. That year, the General Social Survey (GSS) found that those who were against higher levels of government redistribution privately gave four times as much money, on average, as people who were in favor of redistribution. This is not all church-related giving; they also gave about 3.5 times as much to nonreligious causes. Anti-redistributionists gave more even after correcting for differences in income, age, religion and education.
Of course, there are other ways to give than with money. Here again the results may be different from what you might expect. The GSS in 2002 showed that those who said the government was "spending too much money on welfare" were more likely to donate blood than those who said the government was "spending too little money on welfare." The anti-redistributionists were also more likely to give someone directions on the street, return change mistakenly handed them by a cashier, and give food (or money) to a homeless person.
So what does all this tell us? Contrary to the liberal stereotype of the hard-hearted right-winger, opposition to income-leveling is not evidence that one does not care about others. Quite the contrary. The millions of Americans who believe in limited government give disproportionately to others. This is in addition to—not instead of—their defense of our free-enterprise system, which gives the most people the most opportunities to earn their own success.
Obviously, not all charity has ideological connotations—nor should it. But for many, especially at this time of year, giving is a cheerful, productive protest vote against the growing state. It is America's quiet tea party.
Mr. Brooks is president of the American Enterprise Institute.
Re: Giving, charity
Reply #5 on:
December 24, 2010, 09:07:43 PM »
Its always illuminating to examine the tax returns of political candidates.
P. on G.H.W. Bush
Reply #6 on:
February 19, 2011, 08:41:05 AM »
Green Beret Foundation
Reply #7 on:
August 24, 2011, 09:04:05 PM »
The person who brought this to my attention is unknown to me, but this seems most worthy:
Reply #8 on:
September 14, 2011, 08:07:16 AM »
Hat tip to GM
November 28, 2006
Who Gives More: Democrats or Republicans?
Tuesday, November 28, 2006, at 12 noon, U.S. Eastern time
In his new book, Who Really Cares: The Surprising Truth About Compassionate Conservatism, Arthur C. Brooks presents research showing that religious conservatives are more charitable than secular liberals. He says people who support the idea that government should redistribute income are among the least likely to dig into their own wallets to help others. Included in his book is an analysis of 15 sets of data that he says all came to the same conclusion.
What are the implications of his findings? Does it matter to charities whether they get more money from Democrats or Republicans? What can be done to counter these trends? What research data was used to reach these conclusions?
•Charity's Political Divide (11/23/2006)
Arthur C. Brooks is professor of public administration at Syracuse University and a frequent contributor to The Wall Street Journal. His new book, Who Really Cares, was just published by Basic Books.
A transcript of the chat follows.
Stacy Palmer (Moderator):
Good afternoon. I'm Stacy Palmer, editor of The Chronicle of Philanthropy and am pleased to welcome you to our discussion about a new book on charitable giving that is provoking much debate around the country. We'll be taking your questions throughout the hour, so please send them in -- just click on the link on this page that says "ask a question." Mr. Brooks, thank you for joining us and could you tell us what prompted you to write this book?
Arthur C. Brooks:
Ten years ago in graduate school, I began studying the economics of nonprofits and charitable giving. Like most everybody else in the field, I looked at tax rates, deductions, exemptions, incentives. I also looked at the amount of money people gave away, and how much it could pay for in important services.
But it always seemed to me that something was missing from the scholarly discussions of charity in America. Charitable behavior is certainly affected by economic incentives, and it is an important source of money for nonprofits. But giving is, more importantly, a question of our values.
Giving is a uniquely common phenomenon in America: We give more time and money than the citizens of any other developed country. And I think this expresses some of our core values. To reduce the phenomenon of giving to money flows and tax incentives, it seemed to me, was to miss the main point of giving for so many people. When people talk about their giving, they talk about causes that really move them -- helping the poor, participating fully in their churches, or supporting a social cause their care deeply about. They talk about being their best selves, and they talk about the benefits they enjoy themselves.
Giving is a fundamental form of expression for most people, and one that transcends both consumer transactions and the ballot box. Yet I saw that as scholars and experts, we often treat it in a rather materialistic way, as just another instrument of funding or tool of public policy.
So a couple of years ago I set out to take a serious look at giving from a values perspective. Who Really Cares is the result. It lays out the best evidence -- as I see it -- about how currents in American culture today are pushing some people to give, other people not to give, and why it all matters.
That said, the book is not intended as the last word on giving values in America -- far from it. My hope is to start a conversation on the topic (like we're having here today), and with a little luck, to stimulate more research. I'd love it if, in 5 years we have a bigger knowledge about why people give and why they don't, and I can see which of the results in this book stand up to further scrutiny by scholars and practitioners.
My thanks to all of you who are making time to read the book, and to participate in this discussion.
Question from Jim Girvan, College Health Sciences Dean:
I am intrigued by your findings and will definitely buy the book. My question is two-fold: first, as a member of family who gives a high percentage of our income to church and a rather large percentage to charity as well, my wife and I acknowledge much of our church offerings go to running the "business of the church." Do your statistics adjust for the "average 150-700 member congregation" where 70-75% of the offering monies are needed for church functions/personnel/maintenance?
Second -- My wife and I also view our taxes as one way we assist the community. By pooling monies, each of us enjoys services that few of us could afford by ourselves, and many of those services are available to those who can't pay. Is there a way your calculations could be adjusted to reflect the social welfare impact of tax monies on the populace as a whole? (remembering that I view them as donations even though I admit they are not voluntary)
Arthur C. Brooks:
Thanks for your questions, Jim. I agree it's important to look at giving aside from sacramental contributions to get a fair picture of things. So one of the things I do in the book is to compare secular and religious folks only in terms of explicitly nonreligious giving and volunteering. There's still a huge difference:
Religiously-observant people are generally about 10 percentage points more likely than people with "no religion" (or who never practice) to give to nonreligious causes, and about 25 points less likely to volunteer.
Regarding taxes, I think it's true that some see them as a voluntary part of the social contract to help others. The problem with trying to make a measure that combines donations with taxes is that so many people don't pay their taxes with this intent, and voluntary charity is so different in terms of deciding where and how money is spent. Still, I discuss the fact that this point has conceptual validity in some places, especially Europe where social spending really is high.
Question from Arnold Hirshon, NELINET (non-profit library consortium):
1. Is there any evidence that conservatives generally have more disposable income, and therefore are better able to give more -- both on a dollar basis and as a percentage of income?
2. Did the study show the extent to which conservatives vs. liberals actually lend their time to help others versus open their wallets?
3. Did the study show the value of a tax benefit for conservatives versus liberals?
Arthur C. Brooks:
Great questions, Arnold. In general, there is little evidence that conservatives are richer than liberals. In the data I used in this book, conservatives earned slightly less than liberals, but donated more in each income class. Regarding volunteerism, the gap is statistically insignificant between liberals and conservatives, although adding in religion makes a gap open up (religious conservatives volunteer a lot more than secular liberals). It's not clear whether conservatives or liberals enjoy a disproportionate tax benefit from giving, although you might plausibly argue that liberals generally get a bigger benefit because they reside in greatest numbers in high-tax ("blue") states, and thus can deduct more. Still, the emerging research on tax shows that deducibility actually affects giving behavior relatively little for most folks.
Question from Kim S., consultant:
I consider myself to be a "compassionate conservative" working in the nonprofit sector (having worked in the corporate sector for many years.) It is my impression that the nonprofit sector skews liberal/Democrat, at least at the general policy and advocacy levels. Do you agree, and if so, how can Republicans and conservatives become more of a presence, or have a stronger voice, in the nonprofit sector?
Arthur C. Brooks:
Kim, I think it's probably true that nonprofit managers fall disproportionately on the liberal side -- like academics, journalists, and others. (One big exception is certainly Evangelical and traditional Catholic clergy.) If conservatives want to change the political makeup of nonprofit management, it probably means taking areas like social entrepreneurship more seriously. An example of such an effort is the Manhattan Institute's Center for Civic Innovation.
Question from Marilyn, small Midwestern college:
Are these two possibilities: Republicans have more money and need the tax write-offs and are more often sought out by charities; some people who describe themselves liberals (like me) share money in ways that are not recognized as charity (such as helping friends put their children through college or helping a physically handicapped co-worker pay for appropriate housing)? My husband and I also served for two years in a Christian volunteer service project, which has, as we knew it would, affected our long-term earnings and hence our retirement income.
Arthur C. Brooks:
Thanks, Marilyn. There's no evidence that conservatives look for (or receive) tax write-offs more than liberals do. But to your other point, it is always possible that folks like you tend to give in different ways from conservatives n ways that are not picked up in the data. The evidence is pretty incomplete on this point, although it suggests that conservatives actually give informally in some ways more than liberals (e.g. giving blood). But it is always possible that, in other ways, they give less. I am open to this possibility and believe it needs more study.
Stacy Palmer (Moderator):
Mr. Brooks will continue to take your questions throughout the hour and we encourage you to join the conversation. To submit your question, click on the link that says "ask a question."
Question from Ben Brumfield, nonprofit software provider:
While corroborating your main points from his own research, James Lindgren has criticised your analysis for glossing over moderates, who apparently donate less than conservatives or liberals. Your own paper "Faith, Secularism, and Charity" suggested that intensity of political feeling mattered more than political orientation. Would you discuss the role of political moderates in Who Really Cares?
For Lindgren's commentary, see his post here:
Arthur C. Brooks:
Thanks, Ben. My comparison between liberals and conservatives in the book was motivated by the common stereotype that conservatives are less compassionate than liberals, so I really wanted to compare these two groups specifically. If I had been trying to argue that politics per se affected giving, I would have spent lots of space in the book looking at "moderates," who often have low civic engagement levels just as often they have weak political views. But the point in the book was to show that charity differences are actually due to attitudes and behaviors (such as religiosity and attitudes about the government) that go deeper than political affiliations. In the book, I actually point out the fact that when we correct for the "deep attitudes," politics don't predict giving very well. In other words, politics are correlated with giving at the group level and contradict the stereotypes about charity -- and that's important to know. But if we want to know exactly why this is, we have to go into much deeper than politics. Perhaps not surprisingly, that second story isn't the "top-line" one that's showing up in the press a lot.
Question from Stephen L. Rozman, Tougaloo College:
Do you make a distinction between giving to religious organizations (including churches) and giving to other types of groups?
Arthur C. Brooks:
Stephen, Yes. But I should note that most of the data ask people to distinguish between religious and secular giving themselves, which injects some real precision into the distinction. My friend Alan Abramson has noted this in a couple of places. One of the reasons I used so many different data sources in the book is because I was worried about imprecision and bias from self-reported giving, and wanted to make sure lots of datasets told me more or less the same thing.
Question from Stacy Palmer:
Professor Brooks, what difference will the Democratic takeover of Congress make in terms of charitable-giving policies?
Arthur C. Brooks:
That's an important question for all of us in this discussion, I'm sure. One take on this question is provided in the last issue of Chronicle by Les Lenkowsky, and I recommend that editorial highly. I think it's fairly likely that we'll begin to see more support for increased regulation on private foundations. Also, the repeal of the estate tax is no longer remotely likely. Of course, the effect this latter policy has on giving is totally unknown, because people disagree whether the estate tax raises or lowers philanthropy.
Question from Harvey Blumberg, Montclair State University:
Is income equality a factor? Also age?
Arthur C. Brooks:
Harvey, Absolutely. Beliefs about income equality and income redistribution lie behind very definite giving differences. Chapter 3 talks a lot about the fact that proponents of income equality by means of government redistribution mechanisms are less likely to give voluntarily to charity than those who oppose redistribution. Lots has been written about age as a factor in giving. In general, folks give more as they get older.
Question from Michael Kearns:
In the Center on Wealth and Philanthropy Charitable Giving Indices: Social Indicators of Philanthropy by State study, the top 10 states for CWP Measure 4 of Giving Relative to Income Ranked by State are: New York, District of Columbia, Utah, California, Connecticut, Maryland , New Jersey, Georgia,Massachusetts and Hawaii. 8 of those states would be classified as "blue states" whereas the bottom 10 states are: Maine, Mississippi, Indiana, Missouri, New Mexico, Iowa, South Dakota, Vermont, West Virginia and North Dakota are almost exclusively red.
So my questions are:
1) Does this study contradict your book?
2) If the premise that conservatives give more than liberals, does it matter which state the conservatives live (i.e. do conservatives living in blue states give more than those in red states). And if so, why?
Arthur C. Brooks:
Thanks, Michael. There are various high-quality indices of giving by state and region, and they do indeed come to different conclusions. The simple one I use (comparing giving as a percentage of income with the electoral map) is supported to a large extent by the work at the Newtithing Group, and also by the giving data contained in the Indiana Center on Philanthropy's PSID data. That said, there are lots of ways to look at geography and giving, and the question is far from settled. But more importantly for this book, the main forces across individuals and states are not primarily political, but cultural. In answer to your second question, I think state matters less than things like religion. If the state counts per se, it will have to do with things like tax policies, which (in my view) are really not all that important.
Question from Walter Minot, U of South Alabama:
Are there figures for conservative charitable giving apart from direct contributions to a person's parish church or local branch, which may be a form of self-serving convenience to keep the institution going?
Arthur C. Brooks:
Walter, my answer above to Jim sums that up pretty well. I'd like to point out, however, that even if giving to churches is something like a "club membership" for some folks, we still need to look at it as voluntarily supporting a civic organization, so it is not entirely dissimilar to other kinds of charitable giving.
Question from Tom S., educator:
I am a fairly conservative Evangelical who gives significantly to charities, both religious and otherwise. I was recently at a liberal-focused educators' gathering where a speaker presented the Evangelical viewpoint very fairly and accurately, though it was clearly not her viewpoint. She mentioned the fact that Evangelicals are extremely generous. I knew this to be true, but was amazed to see the crowd's amazement at this statement. I was also refreshed to hear the comment made. Do you think there is a trend toward recognizing this reality? What evidence have you seen for (or against) such a trend?
Arthur C. Brooks:
Tom, There still exists the stereotype that conservatives n including conservative Christians n are inherently stingy people. This is strikingly common in much of academia, where it's possible not to even know an Evangelical person personally. I hope the truth becomes better known, because it will help religious and secular people work together with the facts in hand, and ultimately to increase American giving. If this happens, a big part of the reason will be because Evangelicals seek more to work with secularists and others in secular giving environments.
Question from Stacy Palmer:
Based on your research, do you have any advice for how fund raisers can best appeal to potential donors?
Arthur C. Brooks:
Well, my first response is that fundraisers should actually APPEAL to donors more. It's really shocking how many nonprofits don't take fundraising seriously, or do so in a way that doesn't honor the intent or wishes of givers. My research shows me very clearly (and I hope shows my readers as well) that giving is hugely beneficial to givers themselves, and so nonprofits do an immense service to individuals, communities, and our nation as a whole by fundraising per se. I know it's counterintuitive, but fundraisers need to understand that one of a nonprofit's highest functions can be to connect people who have a need for services with people who have a need to give (that is, all of us).
Question from Tom S., Educator:
In the Chronicle of Philanthropy article, you are quoted as saying, "I'm tithing my royalties assiduously." Tithing (giving 10%) is a strong Judeo-Christian concept. Did you find any parallel concept or pattern in the non-religious community?
Arthur C. Brooks:
Tom, First of all, I kind of regretted seeing that quote in the story, because I didn't intend that comment to be a boastful one, but rather a statement of fact. I think there are effective standards of giving in secular communities, particularly in elite philanthropy. Where we can use more attention is in "regular" secular charity. It would be very useful to try and establish more of a social code of an appropriate giving level. The devil is in the details of course, and I'm not sure yet how this could be accomplished without being morally heavy-handed.
Stacy Palmer (Moderator):
I'm afraid that is all we have time for today. Thank you all for posing so many terrific questions and thanks to Professor Brooks for offering us a new perspective on charitable-giving patterns. If you have any additional questions about the Chronicle or suggestions for how we can serve you better, you can always write to us at
Bono's one percent
Reply #9 on:
September 22, 2011, 07:05:08 AM »
Bono's ONE foundation under fire for giving little over 1% of funds to charity
Bono's anti-poverty foundation ONE is under pressure to explain its finances after it was revealed that only a small percentage of money it raises reaches the needy.
The non-profit organisation set up by the U2 frontman received almost £9.6million in donations in 2008 but handed out only £118,000 to good causes (1.2 per cent).
The figures published by the New York Post also show that £5.1million went towards paying salaries
While the organisation's gameplan has never been direct handouts on the ground, many who admire the Irish rock legend may be surprised by the figures.
Bono was playing Brussels last night with U2 as the world's leaders - so many of whom he speaks to directly - were meeting at the UN assembly in New York to assess the progress, or lack of, in reaching the Millennium goals they set.
The Post revealed it had received a number of gifts from ONE in the run-up to the event, such as leather notebooks, bags of coffee and water bottles.
In the UK, the organisation has laid on a series of high-profile, celebrity-supported events since it launched in 2002 to fight poverty in Africa and Aids worldwide.
In 2009, the group campaigned to have enshrined in British law a commitment to development assistance abroad.
ONE spokesman Oliver Buston has now defended the way the organisation is run, insisting the money is used for promoting its campaign and raising awareness rather than being given straight to those who need help.
He said: 'We don't provide programmes on the ground. We're an advocacy and campaigning organisation.'
Another spokesman in New York today dismissed the notion of lavish salaries being paid to its 120 members of staff and said the organisation was highly efficient in its raising of awareness.
ONE said it took no money from the public and that most of its funding came from the Bill & Melinda Gates Foundation.
Scott Grannis comments:
Having worked with a number of large charitable organizations, I can say that the vast majority spend no more than 5% of their assets per year (because by law they need to do that to remain a charitable organization). This story is not surprising to me. Both Bono and Gates spend most of their time lobbying for governments to spend money on the causes that they think are worthy. I would wager that a large percentage of the money that the gates foundation is obligated to spend every year (5%) is money that is given to another charity, and that charity in turn spends only 5% of its money. Charitable organizations are for the most part loathe to actually spend their money on charitable causes, preferring instead to accumulate assets that are invested for handsome returns. Why? Because those who are running the charity make a salary that is proportionate to the size of the assets they are managing.
Reply #10 on:
October 04, 2011, 12:27:44 PM »
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what Mormons know about Welfare
Reply #11 on:
February 19, 2012, 07:30:17 AM »
What the Mormons Know About Welfare
Mitt Romney has raised the issue of the social safety net. Washington could learn from the lesson of his church.
By NAOMI SCHAEFER RILEY
Salt Lake City
Ever since Mitt Romney said he was "not concerned about the very poor" but would fix America's social safety net "if it needs repair," conservatives and liberals have been frantically making suggestions. Gov. Romney says he would consider options like restructuring Medicaid. But if he wants to see a welfare system that lets almost no one fall through the cracks while at the same time ensuring that its beneficiaries don't become lifelong dependents, he could look to his own church.
As I ride in a golf cart through a new 15-acre warehouse on the outskirts of Utah's capital, I can't help but wonder: How many Wal-Marts would fit in here? How many burgers can you make from 4,400 industrial pallets of frozen meat? And how do they keep this place cleaner than my kitchen floor?
Dedicated last month, the Bishops Central Storehouse contains a two-year supply of food to support the Mormon church's welfare system in the U.S. and Canada (primarily for church members in need) and its humanitarian program, which sends food, medical supplies and other necessities to the needy (of all faiths) world-wide.
In addition to goods from canned peaches to emergency generators, the facility also houses the church's own trucking company, complete with 43 tractors and 98 trailers, as well as a one-year supply of fuel, parts and tires for the vehicles. Just in case.
The storehouse is not only a kind of physical marvel—it has been built to withstand an earthquake with a magnitude as high as 7.5—but also a symbol of strength and self-sufficiency.
Launched during the Great Depression, the Mormon welfare system was designed by church leaders as a way to match the armies of the unemployed faithful with some of the nearby farms that needed temporary labor. As storehouse manager Richard Humpherys explains, goods and services were traded so that if a father needed food for his family he could get some in exchange for, say, repairing the fence of a widow down the road.
Mormons and U.S. Marines carry aid to landslide victims in central Philippines in 2006.
In 1936, Heber Grant, one of the church leaders, reported the reasoning behind this effort: "Our primary purpose was to set up insofar as it might be possible, a system under which the curse of idleness would be done away with, the evils of a dole abolished and independence, industry, thrift and self respect be once more established among our people. The aim of the Church is help the people to help themselves. Work is to be re-enthroned as the ruling principle of the lives of our Church membership."
Over the ensuing decades, the church acquired farms and ranches of its own. It built grain silos and dairies and canneries to store and process the food. By the end of World War II, church leaders had enough in the way of reserves that they contacted President Truman to ask if they might assist in feeding and clothing the destitute across Europe. The president readily agreed.
Because it has members on the ground around the world, the church continues to be an important force in bringing food and supplies to the impoverished and victims of natural disasters. Local church leaders contact the central headquarters in Salt Lake City to tell them what is needed—gauze pads, school supplies, wheelchairs—and the church does its best to accommodate.
The Department of Defense recently visited the new storehouse to find out how the Mormons are able to mobilize so quickly, and there is an almost military sense of efficiency and strategy to the church's efforts. When Hurricane Katrina struck, for instance, the church had positioned its fully loaded trucks in a kind of semicircle from South Carolina to Texas because no one knew how the storm was going to move. The church used reserves of fuel that it has placed around the country, and drivers were able to bring full tanker trucks into New Orleans, powering rescue vehicles and even chain saws to remove tree limbs.
Most of the inventory in the central storehouse, though, goes to supply more than 100 smaller storehouses around the country, plus hundreds of soup kitchens and homeless shelters of other religious communities around North America. Members of the Mormon church who find themselves in difficult circumstances can go to their local bishop and ask for aid.
The bishop then fills out an order allowing them to go and receive food from the local storehouse. Seventy percent of the items on the shelves are produced by the church itself and the remainder are purchased at steep wholesale discounts. According to Rick Foster, who oversees a smaller storehouse in Salt Lake City along with the cannery and dairy at Welfare Square (the original site of all the church's welfare services), people depend on the food at the storehouse for an average of three to six months.
That's because the church's goal is to help them get back on their feet as soon as possible. And the storehouse is only one of the tools at the disposal of local bishops, who may also refer members to other church programs, including employment counseling or family services. The bishop may even use money from a fund at his disposal to help pay for education, housing or utilities.
The labor behind the farming, food production, counseling and even cattle ranching is provided almost entirely by volunteers. Some are retired folks who come in every day. Other times an entire ward, or congregation, will come for the day, each of the members standing on an industrial assembly line packaging bread, processing cheese or sealing jars of apple sauce.
Regular tithing by church members helps pay for the facilities, but the primary source of capital support is the Mormons' monthly fast, as church members are asked to contribute what they would have spent on two meals. Many give much more, says Mr. Foster.
It is safe to assume that Mr. Romney is among them. The tens of millions of dollars he has given the church over the years have raised suspicion in some quarters. What does the church do with all that cash? Wouldn't that money have been better spent paying a higher income-tax rate? But his donations are supporting the kind of safety net that government can never hope to create. Jesus may have said the poor will always be with you, but he didn't say Medicaid would.
Ms. Riley, a former Journal editor, writes frequently about religion.
Re: Giving, charity, tithing
Reply #12 on:
February 26, 2012, 03:39:41 AM »
Marine credits karma for $2.9 million jackpot
LAS VEGAS — Marine Cpl. Alexander Degenhardt is crediting karma for landing a $2.9 million progressive slot jackpot in Las Vegas.
Degenhardt was accepted as a bone marrow donor to an anonymous patient only a couple of days before hitting the jackpot Sunday at the Bellagio, the Las Vegas Sun reported (
"They asked me if I was sure I wanted to go through with it because it's kind of painful, but what's a little pain if it will save someone's life?" Degenhardt said. "I look at this jackpot as kind of good karma for that."
Degenhardt, 26, said he plans to continue his career with the Marines and go through with the bone marrow donation, which is expected to occur in the next six months after extensive testing.
He and several fellow Marines had flown to Las Vegas from Washington, D.C., where he's stationed, for a week of training at Nellis Air Force Base. He said he decided to kill a couple of hours before the return flight by playing the penny slot, which takes bets from 40 cents to $2, at the Bellagio. He landed the jackpot about 10 minutes later.
"I figured I'd just go lose $100 real quick," he said. "I was overwhelmed and in shock. It's something you always want to happen, but when it does happen you don't believe it."
Degenhardt, who will receive about $100,000 a year over 20 years, said he plans to first help his pregnant sister and his mother catch up on bills.
He decided to buy some clothes after the jackpot — at a thrift store, where he buys all of his clothes. He said he won't part with his car that has rolled up some 250,000 miles, either.
"I plan to keep driving it until I can't anymore," he told the Sun. "No sense in wasting money. I'm really pretty thrifty."
The Bally Technologies' Money Vault slot machine at the Bellagio is linked with casinos across Nevada. It was the second largest jackpot ever for Bally, which makes the machines and pays out the jackpots.
Information from: Las Vegas Sun,
WSJ: Why can't we sell charity like we sell perfume?
Reply #13 on:
September 17, 2012, 03:40:53 PM »
Why Can't We Sell Charity Like We Sell Perfume?
What if we let philanthropies operate like businesses? Let them pay for talent, advertise aggressively to build market share—even build a stock market for charity. Maybe then capitalism could finally save the world..
By DAN PALLOTTA
In his 1630 sermon "A Model of Christian Charity," Gov. John Winthrop of the Massachusetts Bay Colony warned his Puritan followers about the perils of pursuing worldly riches. By turning to "pleasure and profit," he wrote, "we shall surely perish." Gov. Winthrop himself would have been well acquainted with those perils: At the same time, he and his business partner were busy calculating how much they might earn by trading in a range of goods, from hemp to iron.
The early Puritan settlers in the New World were pulled in opposite directions by competing value systems. They were extremely aggressive capitalists, but they were also strict Calvinists, taught that self-interest was a sure path to eternal damnation. How could they negotiate this psychological tension? Charity became a big part of the answer—an economic sanctuary in which they could do penance for their profit-making tendencies, at five cents on the dollar.
Want to pay someone a half-million dollars to try to find a cure for pediatric leukemia? You're considered a parasite.
Today, Americans are the world's most generous contributors to philanthropic causes. Each year, we give about 2% of our GDP to nonprofit organizations, nearly twice as much as the U.K., the next closest nation, according to the Chronicle of Philanthropy. Some 65% of all American households with an income of less than $100,000 donate to some type of charity, according to the Center on Philanthropy at Indiana University, as does nearly every household with an income greater than $100,000. These contributions average out to about $732 a year for every man, woman and child in America.
Yet we cling to a puritan approach to how those donations are spent: Self-deprivation is our strategy for social change. The dysfunction at the heart of our approach is neatly captured by our narrow, negative label for the charitable sector: "not-for-profit."
It's time to change how society thinks about charity and social reform. The donating public is obsessed with restrictions—nonprofits shouldn't pay executives too much, or spend a lot on overhead or take risks with donated dollars. It should be asking whether these organizations have what they need to actually solve problems. The conventional wisdom is that low costs serve the higher good. But this view is killing the ability of nonprofits to make progress against our most pressing problems. Long-term solutions require investment in things that don't show results in the short term.
We have two separate rule books: one for charity and one for the rest of the economic world. The result is discrimination against charities in five critical areas.
First, we allow the for-profit sector to pay people competitive wages based on the value they produce. But we have a visceral reaction to the idea of anyone making very much money helping other people. Want to pay someone $5 million to develop a blockbuster videogame filled with violence? Go for it. Want to pay someone a half-million dollars to try to find a cure for pediatric leukemia? You're considered a parasite.
Two years ago, a group of senators raised questions about the compensation of the CEO of the Boys & Girls Clubs of America, which totaled $998,591 for 2008, nearly half of which consisted of catch-up obligations for her retirement. The critics ignored the fact that over the previous eight years, the CEO had tripled the Clubs' network-wide revenue to $1.5 billion. Would the Clubs have been better off hiring a less talented CEO for $100,000 and leaving revenue stagnant, at a loss of $1 billion?
The Saturday Essay
Geography Strikes Back (9/8/12)
Are Entitlements Corrupting Us? Yes | No (9/1/12)
Conventional Wisdom (8/25/12)
The Panic Over Fukushima (8/18/12)
Can Syria's Christians Survive? (8/11/12)
Decoding the Science of Sleep (8/4/12)
Why Capitalism Has an Image Problem (7/28/12)
We tend to think that policing salaries of charitable groups is an ethical imperative, but for would-be leaders, it results in a mutually exclusive choice between doing well for yourself and doing good for the world—and it causes many of the brightest kids coming out of college to march directly into the corporate world.
A second area of discrimination is advertising and marketing. We tell the for-profit sector to spend on advertising until the last dollar no longer produces a penny of value, but we don't like to see charitable donations spent on ads. We want our money to go directly to the needy—even though money spent on advertising dramatically increases the money available for the needy.
In 2006, the consulting firm Changing Our World estimated that charities providing health care and human services spent about $1.5 billion on marketing, versus $729 billion for marketing in the rest of the economy. That translates into one message for health and human-services causes for every 479 messages for something else. This imbalance is a big part of the reason that charitable giving has remained constant in the U.S. at about 2% of GDP since we began measuring it in the 1970s. In 40 years, the nonprofit sector hasn't been able to take market share away from the for-profit sector. But how can it if it isn't allowed to market?
Nonprofits are expected to send every donation immediately to the needy. Amazon.com went for six years without returning a dime to investors.
.Highest-Paid Chief Executives of Social-Service Nonprofits in 2010
1. Gail McGovern,
American Red Cross $995,718
2. Brian Gallagher,
United Way Worldwide $559,257
3. Vicki Escarra,
Feeding America $467,628
4. Sloan Gibson,
United Service Organizations $461,399
5. Neil J. Nicoll,
Source: The Chronicle of Philanthropy
A third disadvantage for charities is the expectation of a home run on every at-bat. If Paramount Pictures makes a $200 million movie that flops, no one calls the attorney general. But if a nonprofit produces a $5 million community fundraising event that doesn't result in a 70% profit for the cause, its character is called into question. So, naturally, nonprofit leaders tend to avoid daring new fundraising endeavors that might put them at risk.
A fourth problem is the time frame during which nonprofits are supposed to produce results: immediately. Amazon.com went for six years without returning a dime to investors, who stood by the company because they understood its long-term goals. But nonprofits are expected to send every donation immediately to the needy. This demand is policed by tax forms that measure the amount spent on direct services every 12 months.
Finally, the for-profit sector is allowed to pay investors a financial return to attract their capital. The nonprofit sector, by definition, cannot. So the for-profit sector monopolizes the multitrillion-dollar capital markets, and the nonprofit sector is starved for growth and risk capital. Why shouldn't an investor be able to take a risk—and get a return—on an investment that allows a charity to double in size? And why wouldn't we want to encourage it to do so?
If you have any doubt about the effects of the separate rule book for charities, consider one sobering statistic: Since 1970, the number of nonprofits that have crossed the $50 million line in annual revenue is 144, according to George Overholser and Sean Stannard Stockton, writing on the blog Tactical Philanthropy. The number of for-profits that have crossed that line during the same period is 46,132.
In short, we are asking nonprofit groups to deal with social problems whose scale is beyond easy comprehension, while denying those groups the tools they need to build any meaningful scale themselves. Something is wrong when Coca-Cola and Burger King have a potential for growth that we deny, on principle, to the Boys & Girls Clubs and the National Breast Cancer Coalition.
In recent years, some observers have advanced the notion that philanthropy has been tried and failed, and isn't necessary anymore. Business will solve all of the world's problems, they say. They point to the Clinton Global Initiative's harnessing of market forces to use a high-volume, low-price approach to make AIDS drugs more accessible to poor countries. See what Starbucks is doing for poor coffee farmers, we hear.
But business, for all the strides it is making, will always leave some part of the problem unaddressed. An estimated 1.8 million adults and children still die of AIDS every year. And there are some issues for which there are no markets outside of philanthropy. How do you monetize easing the loneliness of a shut-in senior? How do you address the economic needs of those who lack the wherewithal to become coffee farmers, beyond the reach of even the bottom rung of the global economy?
Business can't solve all of the world's problems. Capitalism can—but only if it is permitted in the nonprofit sector. If we free the nonprofit sector to hire the best talent in the world, take fundraising risks, use marketing to build demand and invest capital for new revenue-generating efforts, we could bring private ingenuity to bear on those problems and would not need to look to government to fill the gaps.
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Where would the money come from? From us. If we allowed the nonprofit sector to build the kind of demand for philanthropy that Hollywood builds for movies, we would be on our way to the necessary scale. Today, Americans give about $300 billion to nonprofit organizations annually, according to Giving USA. Only about 16% of that—$48 billion—goes to health and human services. A large part of the remainder goes to religious and educational institutions. If we could increase charitable giving in the U.S. to 2.5% of GDP from 2% of GDP, that would amount to an additional $75 billion in annual giving. If that money went disproportionately to health and human services, it could as much as triple the funding available for those causes. Now that's scale.
Jeffrey Sachs, the Columbia University economist, has estimated that the cost to end extreme poverty in the world is about $175 billion annually. A half-percentage-point bump in annual giving to charity as a percentage of GDP in the U.S. alone could put us close to halfway there.
This idea that investment in growth can create growth is not theory. Fundraising consultant James Greenfield estimates that, for major gifts, every 10 cents spent on fundraising produces, on average, a dollar back. For direct-mail solicitations, the cost is 20 cents per dollar back. For special events, 50 cents. Investment in fundraising and marketing multiplies the money put into it. For example, in just five years, Share Our Strength, a national organization committed to ending childhood hunger, was able to quadruple the money it raised by investing in fundraising. A $30 million organization in 2010, it has grown into a $43 million organization today, just two years later.
For this to work, how would charities need to be set up? Not very differently. It is not illegal for charities to spend money on advertising or to hire great talent. It is not so much the law that needs to change as our thinking. Charities need to know they won't be punished by donors for engaging in unconventional business practices.
There are statutory changes that could be made to allow, for example, a stock market for charity, wherein investors could earn returns on revenue streams that their risk capital makes possible, and even trade on related futures. But changes in our thinking would provide more than enough room for a start at improvement.
How would we assess charities if not by how little they spend on overhead? With three simple questions: What are their goals? What progress are they making toward them? And how do they know?
The data for this kind of evaluation could be distributed via a massive iTunes for charity, covering every nonprofit in America regardless of size, and it could be updated regularly. It could replace the fragmented array of watchdog agencies that evaluate—largely on the basis of overhead ratios—just 7,500 of the 1.5 million nonprofits in America.
It's time to declare independence from the 1630s. A few decades ago, pork producers got together to change the image of their product as a fatty heart-attack-waiting-to-happen. The result was the slogan "Pork, the Other White Meat," and the campaign was wildly successful. If we can change the way that the public thinks about pork, we can change the way it thinks about charity. And if we can do that, charity can change the world.
—Mr. Pallotta created the AIDS Rides and Breast Cancer 3-Day fundraising events and is the author of the new book, "Charity Case: How the Nonprofit Community Can Stand Up for Itself and Really Change the World."
A version of this article appeared September 15, 2012, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Why Can't We Sell Charity Like We Sell Perfume?.
Reply #14 on:
September 20, 2012, 02:44:23 PM »
Last Edit: September 20, 2012, 07:21:25 PM by Crafty_Dog
Shoe-ed shoeless man shoeless again
Reply #15 on:
December 03, 2012, 12:10:09 PM »
Re: Shoe-ed shoeless man shoeless again
Reply #16 on:
December 03, 2012, 04:51:48 PM »
Quote from: Crafty_Dog on December 03, 2012, 12:10:09 PM
A perfect metaphor for Obama's America.
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