Link Banana

Catherine Rampell thinks people spend too much time worrying about high administration costs when giving to charity:

While there is something to be said for charities that know how to keep their administrative costs under control, lower costs are not always better. For example, many nonprofits seem to cut corners on backroom tasks like bookkeeping and record-keeping because these expenses aren’t viewed as critical to the “mission.” But spending less money on such administrative costs can actually make a charity less effective because it invites embezzlement, a crime that perpetually afflicts nonprofit organizations.

Citing Leona Helmsley’s generous-sounding donation to dogs, Ryan Madoff take offense at something most people happily forget:

The charitable deduction enables people to donate as much of their assets as they like for charitable purposes without paying a tax. While some choose to contribute to broad public goals, the law does not require it. In recent years, charitable status has been recognized for organizations with purposes as idiosyncratic as promoting excellence in quilting and educating the public about Huey military aircraft. Indeed, Mrs. Helmsley might have limited her beneficence to the Maltese breed of dogs she favored, and that, too, would have been allowed as a “charitable” purpose.

If this were only a matter of Leona Helmsley wasting her own money, no one would need to care. But she is wasting ours too.

The charitable deduction constitutes a subsidy from the federal government. The government, in effect, makes itself a partner in every charitable bequest. In Mrs. Helmsley’s case, given that her fortune warranted an estate tax rate of 45 percent, her $8 billion donation for dogs is really a gift of $4.4 billion from her and $3.6 billion from you and me.

To put it in perspective, our contribution to Mrs. Helmsley’s cause equals approximately half of what we spend on Head Start, a program that benefits 900,000 children.

These are both a little old, but worth examining.

• The Economist shows that Americans are clearly the most generous private donors to charities.
• While Stephen Dubner asks if they’re actually secretly selfish in how they give.

Sad but true: I willfully ignored this because the reported death toll yesterday was only around 350. Today reports are saying that more than 22,000 are confirmed dead and that the number may climb even higher. It also appears that the Red Cross and other aid agencies have been allowed in by the ruling junta.

These details from Eduardo Porter depress me.

Americans are not less generous than Europeans. When private charities are included, they probably spend more money for social purposes than Europeans do. But philanthropy allows them to target spending on those they personally believe are deserving, instead of allowing the government to choose.

Mr. Glaeser’s and Mr. Alesina’s work suggests that white Europeans support a big welfare state because they believe the money will probably go to other white Europeans. In America, the Harvard economist Erzo F. P. Luttmer found that support for social spending among respondents to General Social Survey polls increased in tandem with the share of welfare recipients in the area who were in their own racial group. A study of charity by Daniel Hungerman, a Notre Dame economist, found that all-white congregations become less charitably active as the share of black residents in the local community grows.

This David Brooks column, like his recent one of Rank-Link Imbalance, seems a tad to generic for it’s own good. But I liked this bit:

But the new do-gooders have absorbed the disappointments of the past decades. They have a much more decentralized worldview. They don’t believe government on its own can be innovative. A thousand different private groups have to try new things. Then we measure to see what works.

It strikes me as a good counterargument to Thomas Friedman’s slightly silly concerns in “Generation Q”, which I took issue with at the time.

David Leonhardt’s piece in last weekend’s New York Times Magazine is a good one, even if he doesn’t really answer that question. Consider this:

In the late 1980s, an economist named James Andreoni argued that the internal motives for giving were indeed more important than many people had acknowledged. He came up with a name for his idea — the “warm glow” theory — and it stuck. In the warm-glow view of philanthropy, people aren’t giving money merely to save the whales; they’re also giving money to feel the glow that comes with being the kind of person who’s helping to save the whales.

The Economist’s obituary for Baba Amte make me sad for his death, even though I’d previously never heard of the man.

HE HADN’T meant to touch it. As he grubbed in the rain-filled gutter to pick up dog shit, human excrement and blackened, rotten vegetables, stowing them in the basket he carried on his head, he brushed what seemed to be a pile of rags, and it moved a little. The pile was flesh; it was a leper, dying. Eyes, nose, fingers and toes had already gone. Maggots writhed on him. And Murlidhar Devidas Amte, shaking with terror and nausea, stumbled to his feet and ran away.

Most people thought he was crazy to be doing that job anyway. Scavenging was a job for harijans, outcastes. But Mr Amte, a handsome man in his 30s, was better known as a big-shot criminal lawyer in Warora, in what is now Maharashtra in central India. He could charge as much as 50 rupees for arguing for 15 minutes. He was a member of the bridge club and the tennis club and vice-president of the Warora municipality, and he kept, outside town, an elegant farmhouse set in lush fields which he had never lifted a finger to cultivate himself. But after living with Mahatma Gandhi in his ashram in the mid-1940s, something had happened to him.

I was rather surprised to hear that the Bill and Melinda Gates Foundation has detractors. After examining their claims, however, The Economist decides that they’re (mostly) meritless.

Therein lies an irony. The WHO, one of whose captains now calls the Gates Foundation monopolistic, used itself to hold a monopoly in the fight against malaria, and it did a lousy job as a result. Indeed, Dr Kochi himself has been refreshingly frank about the WHO’s poor record in fighting the disease. The agency has also been criticised for accepting poor data from member countries which may downplay bad news. As Dr Chan says candidly, that charge “is a reality”. It is not her role, she says, to “name and shame” countries; she prefers to exert private pressure. But she acknowledges that some public pressure is essential, and applauds the role played by the media and charities in “shining the light” on previously obscure places.

A big new non-government organisation, crashing into the jungle like a young elephant, is bound to cause resentment, and perhaps bound to have unintended ripple effects. But without this elephant’s input of new money and ideas, the battle-front against malaria and other deadly diseases might present an even worse picture, especially if the field were left to governments and inter-governmental bodies.

Allison Schrager’s thoughts about how to give are good, but this bit just struck me strongly (because I feel the exact same way):

Regardless of how you feel about why we are in Afghanistan, many of us would hope to improve the daily lives of those who live there. But how can we help the citizens of a country so far away? How do we even know what they might need? I could join the military or find work with an NGO there. But really, I am far too selfish to do either of these things. I have endless admiration for those who are willing to disrupt their lives and put them on the line. I, however, want to be able to offer help from the comfort of my own home.

I heard about this site a while ago (and had the idea before that), but I just noticed that it actually launched.

stickK is a web-based company that helps you achieve your personal goals through “Commitment Contracts.” You create a contract obliging you to achieve a specific goal within a specific time-frame. By doing so, you put your reputation at stake. You may also choose to wager money to give yourself added incentive to succeed. If you do succeed, you get your money back. If you fail, the money is forfeited to charity, or to one of several causes, or to a person of your choosing. stickK’s services are absolutely free.

I think the charity donation aspect could also be used like the mythic SnūzNLūz so that you really feel motivated.