Does this story show us the right way to do charity? \ stacker news ~culture

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Does this story show us the right way to do charity?

754 sats \ 12 comments \ @Signal312 8 Oct culture

I've been posting occasionally about charity, and the pitfalls, disasters and misaligned incentives that often go along with it

I'm skeptical of "service projects" (Rotary club, cooking fires, and stovepipes) Charity - "More Harm Than Good" (from the book Family Fortune - by Bill Bonner) This is why I distrust most charity

And then I was just talking last week to an elderly relative, who told me the story of her grandmother and grandfather, who lived in central Europe.

Her grandfather had lost an arm in an industrial accident, and couldn't work a normal job. So, it was up to her grandmother to help help earn a living. They were very self sufficient, slaughtering a pig every winter, and growing their own potatoes. But...they didn't have enough land to grow all the potatoes that they needed.

And here's what charity was, back then - my relative's grandmother would do work (whatever labor that was required) for the town where she lived. That town also owned some arable land, which the grandmother was allowed to cultivate with potatoes, in exchange for her labor. And those potatoes (along with pigs, etc.) kept them fed.

She was not an "object of charity". It was a reciprocal arrangement, that involved a lot of (useful) work. And very likely, many people wouldn't even call it charity.

They still had six children. In contrast, the next generation had three, and now, the average is less than one.

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87 sats \ 8 replies \ @freetx 8 Oct

For a few years I did IT consulting to a non-profit. The question of "effective charity" is a very complex one that is fraught with difficulty. Every rich donor will say "earning the money was much easier than giving it way...."

You're right to question it and there are lots of different arrangements (like your relatives) that don't need to be traditional "give money" arrangements. However they are one-offs and don't scale well....

The issue we face as a society is that those that have an overabundance of wealth want to dedicate some of their wealth into giving back. The result winds up "flooding the zone", that is the sheer amount of money pouring into some programs starts to create perverse incentives.....at a certain point Food Bank programs become drug-addict-subsidy organizations.

There is no clean way to solve this problem....its actually an economic problem of sorts. Much like the flood of capital into the stock markets winds up creating malinvestment, so to it happens in non-profit space. Too many funds pouring into a too concentrated bucket.

I think the Catholic Catechism has a helpful approach to it. In summation, it basically says that "charity should be done at the smallest possible level". That is, its better for you to help the needy family down the street rather than the parish church. Its better the parish church help than the city, better the city help than the state, etc....

This honestly goes back to your elderly relatives example. That solution was a "small scale" of charity. But we are back to the original problem....how do you scale it?

32 sats \ 0 replies \ @Signal312 OP 8 Oct

Jimmy Song recently had a podcast that also addressed that same theme, about "earning the money was much easier than giving it way...."

Giving it away would be easier only if you didn't do it carefully.

But with most charities, you scratch the surface just a tiny bit, and instantly find inefficiencies, fraud, misaligned incentives, all kinds of things you don't want to put money into.

Take, for instance, libraries. Andrew Carnegie established a lot of public libraries in the US. And to be honest - I've used libraries a tremendous amount, in my life, and they've been hugely positive.

But now, most libraries are centers of wokedom. Where I use to live, they were shut down during covid for MORE THAN A YEAR (they did have a "hands off" book retrieval service). Actually I think the libraries may have been closed more than 18 months.

And my last experience of the local library, where I lived previously, was being kicked out for not wearing a mask, once they did open again.

25 sats \ 6 replies \ @Bell_curve 8 Oct

Maybe charity should not scale

I like the example of help your neighbors vs donating to your Parrish

Regarding philanthropy, it’s a status game. Why did Carnegie establish libraries and concert halls and universities? Legacy! Do people even remember he was a steel magnate? We are still talking about him today

A few months ago I gave my old car to my handyman. 2005 Infiniti. He is a documented immigrant from Mexico. He can stay. The other 20 million should self deport.

45 sats \ 5 replies \ @freetx 8 Oct

Maybe charity should not scale

Agree. Its likely impossible to make it scale.

BUT the rich will keep dumping their money into "United Way" and other mega-sized charities and the malinvestment will continue. Why will the rich do that?

Its the same problem Warren Buffet has....if you are trying to donate $200M, trying to find enough small charities at $50K each is impossible....so you wind up giving $25M at a time to the mega-charities. Much like Buffet trying to invest $30B of funds, he can only do that with bluechip stocks, there aren't enough quality small companies to absorb it.

21 sats \ 3 replies \ @Signal312 OP 8 Oct

Didn't Buffet actually give most of his money to the Gates Foundation?

The Gates Foundation, BTW, is a rotten setup. I know some people who worked there.

Another similar story (I remember reading about this a while back and just asked AI to summarize it for me)

Joan Kroc, McDonald's heiress, bequeathed an unprecedented $1.5 billion to The Salvation Army in 2003 for building community (Kroc) centers. However, her will's strict conditions—requiring local matching funds and dictating how the money was used—created significant "golden handcuffs" for the organization. This led to slow, complex implementation, financial sustainability challenges, and concerns about mission drift, widely reported as problematic despite the eventual success of many Kroc Centers.

21 sats \ 1 reply \ @Bell_curve 9 Oct

Saint Jude’s hospital City of Hope Mayo Clinic

Donate money to private hospitals that rely on private donors

22 sats \ 0 replies \ @freetx 9 Oct

Saint Jude’s hospital

100%

5 sats \ 0 replies \ @Bell_curve 8 Oct

She used to own the San Diego Padres

The founder starring Michael Keaton is a great movie

18 sats \ 0 replies \ @Bell_curve 8 Oct

Give money charter schools Donate to the military Donate to air traffic controllers

I agree that rich people have a scaling problem.

Buy a professional sports team. Build a new stadium. Donate to cities with high crime and understaffed police departments. Setup an anti Soros fund Etc etc

45 sats \ 1 reply \ @siggy47 8 Oct

I really liked this link post:

#1239020

36 sats \ 0 replies \ @Signal312 OP 8 Oct

Looks very interesting. I'm setting it aside for later reading.

0 sats \ 0 replies \ @Undisciplined 8 Oct

What you're describing is more of an informal transaction than a charitable gift.

However, that doesn't mean it's not more effective than most charity. In general, imposing even minimal costs on receiving charity will have a dramatic effect on the incentives.

I don't think there's a particular right way to do charity, because everyone responds differently to different forms of help.