The Band-Aid Approach: The Inadequacy of Charitable Giving for Tackling Social Problems

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The United States consistently ranks among the most “generous” countries in the world – we citizens routinely rank very high in the categories of helping someone we don’t know, donating money to charity, or volunteering our time to an organization. A Marketwatch article from December 2019 cites results from the World Giving Index, an instrument of the United Kingdom-based nonprofit Charities Aid Foundation: the US “has been the most generous country in the world over the past decade” based on results from Gallup’s World Poll of 1.3 million people worldwide between 2009 and 2018. For reasons not entirely clear, the two next most generous nations were Myanmar and New Zealand.

The Marketwatch article noted that, in a separate survey by Lending Tree, Americans would give more if they could; 56% of those surveyed said that income constraints prevented them from giving more money to charity.

While we Americans are justified in being pleased with our level of charitable giving, and we know how important and effective charities and nonprofit organizations can be in helping millions of people in scores of ways, it is vital that we step back and critically examine this phenomenon. We must do this for the following reasons:

  • Even before COVID-19 hit, plunging millions of individuals, families and businesses into dire circumstances, the financial situation for a large number of Americans was dire. In an early 2019 survey, it was revealed that 40% of Americans would “struggle to come up with even $400 to pay for an unexpected bill.”
  • An alarming number of Americans live paycheck-to-paycheck (and probably have been for most of their adult lives). The figures vary, from half of workers making under $50,000 to 74% of all employees. Further, nearly 30% of adults have no emergency savings at all.
  • Food insecurity has been a problem in the US for a long time, and is not due just to the pandemic. According to an NPR article from September 2020, “Even before the pandemic hit, some 13.7 million households, or 10.5% of all U.S. households, experienced food insecurity at some point during 2019. . . . That works out to more than 35 million Americans who were either unable to acquire enough food to meet their needs, or uncertain of where their next meal might come from, last year.” If we are not appalled by this statistic in our supposedly “richest nation in the world,” we are living with blinders on.
  • Even with the Affordable Care Act in place (which, of course, has been defanged considerably since its passage, thanks to Republican initiatives), in 2018, 27.5 million Americans (8.5 percent) still lacked health insurance, and a 2019 CNBC article noted that approximately 530,000 families file for bankruptcy annually because of medical issues and bills.
  • Significant numbers of people of color in this country live in poverty: 18.8% of African Americans and 15.7% of Hispanics, compared to 7.3% of whites.
  • Even the well-off in this country can be negatively impacted by a dysfunctional society: victims of violent acts, underfunded police and fire departments, infrastructure deficiencies, the poor health of those with whom they interact, etc. If a large swath of a nation’s populace suffers from inequities, illness, and poverty, even the richest members cannot completely escape the results.

In short, despite billions of dollars a year spent on charities that try to help Americans with everything from food to clothing to fuel assistance to medical research to support for artists and musicians, the US falls far short on many measures. As we have noted frequently in previous posts, the US has higher levels of poverty, violence, incarceration, infant mortality, job insecurity, medical expenses, education costs, and income inequality than most of our sister nations around the world. Further, we have shorter life expectancy, we are lower on the World Happiness scale, we have lower retirement benefits, and we have no federally-mandated parental, sick or vacation leave. We will not even address here the tragic and avoidable consequences of the inadequacy of the Trump Administration’s response to the COVID-19 pandemic…

The Limits of Charity

People in general – and perhaps Americans in particular – are naturally drawn to empathy, helping others, and giving. While there is also a competitive streak in human beings – again perhaps heightened in the US – competition can and often does encourage people to better themselves and innovate.

Therefore, the establishment in the US of charities and nonprofits, the laws that have been passed to regulate them, the professional career tracks in philanthropy that have developed over the decades, and the volume of hours that volunteers give to these institutions prove that there is tremendous national buy-in of the charitable mission and endeavor.

A corollary to charitable organizations is the ways in which for-profit companies give back to their communities. Subaru has its “share the love” initiative. There is Amazon Smile; and Comcast announced a $100 million initiative to support social justice efforts as well as a multi-year project to launch 1,000 WiFi “lift zones” to connect low-income families to the internet.

There are obviously enormous benefits for millions of our own people and people around the world from these initiatives and projects. Such benefits are not to be sneezed at – and we are not here advocating dismantling the philanthropic infrastructure.

Americans must begin to admit, however, that this infrastructure is grossly inadequate for what faces us as supposedly the greatest and richest nation on earth. Charitable giving and initiatives by for-profit companies make us feel good – we feel that we are at least doing something in the wake of enormous challenges, hardship and heartache. The problem with charitable giving is that we pick and choose what we want to fund – which means that many individuals, communities, sectors and initiatives fall through the cracks, and our society never truly improves over the long term.

“Choice,” “freedom” and “rights” are key concepts in our American society. With the exception of choice in the realm of women’s control over our own bodies, i.e.., anti-abortion activists do not hold to the “pro-choice” value (!), these are generally held as primary values among conservatives but are often shared by the wider populace. In this way of thinking, we want to choose – we want the freedom, we revere the right to choose – which segments of society we want to support. We want to choose our health care provider. We want the right to choose – the freedom to choose – where we live and with whom we want to associate. We want to choose whether or not to abide by government guidelines issued during a pandemic; our freedom and individual rights, in many Americans’ minds, supersede the government’s ability (even duty) to issue public health regulations to protect all of us. In the words of New Hampshire license plates, “Live free or die:” life is not attractive unless we are free.

Thus, when it comes to supporting others in our society, especially with our personal “hard-earned money,” a primary American value is that we want choice – we do not want some amorphous “government” to decide where our wages and income go, especially if those earnings are used to support people with whom we might not normally associate or whom we feel are lazy, inferior, dirty, of a different ethnicity or religion, and so on. This is the allure of charity and our instinctive resistance to alternatives.

Heading Toward a Better Way: From Charity to Justice

The problem, however, is that the privileging of choice, freedom and individual rights does not lead to the betterment of our entire society. What, then, can or does lead us in that direction? First, we need collectively to ask the question as to whether we truly want to better our entire society. Many Americans, alas, would not see the discussion this way. The philosophy of “pulling ourselves up by our bootstraps” – that is, the hyperindividualistic assumption that if we cannot make it on our own, we are somehow flawed and either deserve our sorry fate or need others’ pity and charity – still reigns supreme for many (perhaps most of the 74 million American who voted for Donald Trump?).

On the other hand, there is evidence in recent years that a majority of Americans do support progressive initiatives at the federal level such as paid maternity leave, tuition-free public college, government-funded child care, and raising the minimum wage – that is, more government intervention, not less. As we have seen above, the hypercapitalistic model practiced in the US does not bring this about; the wealthy and upper middle class may be doing fine, but even they are negatively impacted by those who are not doing well. If most of us then do want our whole society to be better off, then we can legitimately ask whether there truly is a better way to move from a charity model toward a justice and equality model.

In many of our sister nations, it is progressive and fair taxation, when competently administered, that has been proven over and over again to be widely successful.

One of the best treatments of the pro-tax argument is that of Anu Partanen in her book about the philosophy and programs of the Nordic countries. In her chapter, “Of Us, By Us, and For Us,” she makes several important points.

  • “The very high-quality and reliable services that Nordic citizens get in return for their taxes . . . can easily incur additional tens of thousands, if not hundreds of thousands, of dollars in after-tax expenses for Americans” (The Nordic Theory of Everything, p. 254).
  • “The American tax code perversely favors the wealthy, a trend that makes absolutely no sense whatsoever for any nation trying to remain competitive in the twenty-first century” (Nordic Theory, p. 255).
  • “The Nordic nations are living proof that even with higher taxes on the wealthy and on certain consumables, a country can remain competitive, rich, and happy. The dynamism and wealth of Nordic societies in fact give the lie to the argument . . . that higher taxes, especially on the rich, would discourage entrepreneurial activity, innovation, and the growth of businesses” (Nordic Theory, p. 257).

As we have noted elsewhere, in a democratic republic like the US it is we who are – or should be – that supposedly amorphous “big government” that conservatives want so badly to demonize and dismantle. We give the marching orders to those whom we elect, and those marching orders should – must – benefit our entire society. Decisions should have as their goals the eradication of poverty, gross inequality, racism, climate and environmental degradation, and all other things that harm our fellow Americans. Right now, with our current charity mentality, we are not there, not by a longshot.

We are not here arguing against charities and nonprofits. Many of us have served for years as volunteers, on Boards, as employees, and as benefactors of these organizations, and there is great advantage to society in this generosity of time, talent and treasure. Heads of for-profits often support initiatives by their companies on behalf of their communities and encourage their employees to give back. There is definitely a place in any society for charitable giving.

What we are arguing is that charitable giving goes nowhere far enough to solve our seemingly intractable socio-economic problems. Therefore, our long-entrenched national mentality about charity and generosity needs to be modified. Charities should be supplements to robust, well-run, government-sponsored social safety net programs like those found in our sister nations. Many monies given to charity can and should be diverted to a healthy national tax base that can more equitably solve our problems.

This is not a utopian goal, nor is it socialism. Rather it is a harnessing of capitalism in the context of logic and compassion, a justice model that is highly successful in many advanced democracies around the world. If we in the US are truly as great as we think we are, we can – and must – change our collective thinking on these issues, then act accordingly.

 

Resources

Helliwell, John F., Richard Layard, Jeffrey Sachs, and Jan-Emmanuel De Neve, eds., World Happiness Report 2020. New York: Sustainable Development Solutions Network, 2020.

Hill, Steven. Europe’s Promise: Why the European Way is the Best Hope in an Insecure Age. Berkeley and Los Angeles, CA: University of California Press, 2010.

Lakey, George. Viking Economics: How the Scandinavians Got It Right – and How We Can, Too. Brooklyn and London: Melville House, 2016.

Partanen, Anu. The Nordic Theory of Everything: In Search of a Better Life. New York: HarperCollins Publishers, 2016.

Steves, Rick. Travel as a Political Act: How to Leave Your Baggage Behind. Berkeley, CA: Hachette Book Group, 2018; third printing 2019.

 

 

 

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