Arnold Kling  

Thoughts on Charity

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Ezra Klein thinks that political organizations are worthwhile charities.

If you donate money to a food bank, it can provide only as much food as your money can buy. If you donate it to a nonprofit that specializes in food policy issues, it can persuade legislators to pass a new program - or reform an existing one - that can do much more than any single food bank.

So he winds up giving his money to support a think tank whose employees are somewhere around the 95th percentile of the income distribution, in the hope that they will help tilt the rent-seeking in Washington in a direction that he likes.

If you need help finding a charity, you can look at something like Givewell. Theirs is not the only model I can think of for sifting through charities. It is possible that a "recommendation engine" along the lines of movie recommendation engines would work just as well or better. It depends on what you think of the wisdom of crowds, I suppose.

An example of a charity to which I contribute is the Seed Foundation, which supports a charter school for at-risk children in the Washington, DC area. It turns out that the school was mentioned favorably in Waiting for Superman, which I have yet to see. I visited the school many years ago, and I was impressed with the level of effort on the part of the students and teachers.

I think it is actually sort of sad for a policy wonk to settle on the idea of making donations to an organization of policy wonks. To me, it suggests a very narrow comfort zone.

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CATEGORIES: Political Economy

COMMENTS (14 to date)
Yancey Ward writes:

Whatever boosts Ezra's self-esteem.

Carl Shulman writes:

Recommendations work for consumer products, because the consumer can directly evaluate her enjoyment of the product. Donors don't automatically get any meaningful feedback about the actual effects of their donation on people.

I think the post would have been better if you had made clear which you think would provide more help to people in expectation, rather than talking about the psychological traits signaled by the donation.

Is it true that paying for political lobbying for more effect public health aid will save more lives in expectation than paying for the same public health programs through GiveWell's recommended organizations? That's the key question.

JP98 writes:

I give money directly to my needy relatives. It's the easiest form of charity to monitor. Unfortunately, it's not tax-deductible.

Geoffrey writes:

I strictly do the opposite.

I only donate to charities that do not lobby the government to take money by force.

I prefer charities that actually help people directly.

dave smith writes:

Give a man a fish, he'll eat for a day. Teach him to take fish from others, ...

David R. Henderson writes:

@dave smith,
LOL. May I use that?

dave smith writes:

Sure, Professor Henderson.

mark writes:

Outstanding post. Thanks for the link to Givewell which I will visit.

Joe Calhoun writes:

Thanks, Dave Smith, for my laugh of the day. Awfully charitable of you....

Hyena writes:

Waiting for Superman slowly becomes painful to watch, its "plot" follows the children until you watch meritocracy clearly break down and fail them utterly.

blighter writes:

Ezra's point is well taken but of course doesn't go nearly far enough. I, for example, only use my charitable donations to arm militant extremists whose goals I find laudable. Donate to some policy wonks and maybe they'll be able to out-argue the vile plutocrats who choke the life out of our society's members -- particularly the most vulnerable -- arm some violent revolutionaries, on the other hand, and they will finally be able to overthrow the entrenched evil of the system and create a socially-just, environmentally-sustainable new world where everyone will be more free and better off in manifold ways.

Also, unlike policy wonk Ezra giving to his fellow wonks, not being a violent revolutionar my donations are free of that whiff of self-interest.

stuhlmann writes:

I think the main difference between donating money or food to a food bank and donating to any agency that seeks to end hunger through policy changes is that the first deals with hunger in the present while the later deals with hunger in the future. A lot of people could starve to death while waiting for even the most effective policies to be put in place.

Benet Davies writes:

High Court case in Australia on this very issue. Decision this week that lobbying activities can be "charitable". Policy wonks now tax deducible?

Jason writes:

Givewell is indeed a nice resource.

There are, however, many complex issues involved in "rating" a nonprofit. For example, the commonly used "percentage of revenue used for administrative expenses" metric exhibits a Laffer curve-like sweet spot. If too much is spent on overhead, the nonprofit is inefficient. If too little is spent, it's likely doing no incremental good at all - it's merely passing money along without making any value-adding decisions, something the donors could do themselves.

I have found that diversification of giving is the solution to the information problem - just like in investing. We will never have perfect information about the efficacy of any company - for profit or non-profit. Therefore, it pays to diversify our investments, and our contributions. By diversifying, we can ensure that the highest percentage of our donations are used for non-market goods. Certainly higher than if we let politicians do the picking for us, as they do in the current model!

Check out for an innovative way to build a nonprofit portfolio. I built it, I use it, and people seem to really love it. One monthly donation split up to as many nonprofits as you support. Would love everyone's feedback on it.

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