Problems With Philanthrophy – Part II

Consider giving to smaller, local and goal-directed charities.

Problems With Philanthrophy – Part II

By: Mitch Levin – July 19, 2020

        This is the second of two posts by guest blogger, Mitch Levin; if you missed the first part, it is on our website:  We resume where we left off last week.

Unintended Consequences: Well-intended charities of the 1960s directly led to poor black women depending on government for income and sustenance, replacing and emasculating the men in their lives. The men sought meaning in the streets. The family unit was decimated and poverty is now enculturated in certain communities.

Adverse Outcomes: An opera company would not renegotiate artist contracts during the Great Recession for fear of tarnishing its reputation for future contracts. Despite a multimillion dollar budget and endowment, the company folded, artists were unpaid, performances cancelled, donors burned, audiences deprived and staff unemployed.

Complication and Bureaucracy: Hospitals are often very poorly run, organized and maintained. Doctors, patients and administrators all are frustrated at the same things at the same times. There is so much regulation, often competing, and so little transparency and data to identify and to measure good goals.

Executive Compensation: There is no compelling reason leaders of taxpayer supported, tax-exempt organizations should be compensated at levels commensurate with commercial enterprise sisters. Donating work is part of the donation – especially for those passionate about the charitable mission. Don’t worry you won’t be able to attract high level performers with lower compensation. Mayo Clinic and Harvard do it all the time for the privilege of wrapping their halos around you. It is a false comparison.

Diversion: You contribute to one “charity” which then contributes to a completely different type charity. Examples are a charitable hospital contributing to a performing arts building and cancer research contributing to abortion clinics.

Frustration: Performing arts giving subsidizes those who don’t, yet without your subsidy the organization may not be able to deliver the art form to the community – and we all would be so much worse off, even if you do not patronize the arts.

Perpetuation: This is especially true in the social services realm where the goals are poorly defined. Many simply continue to grow. Rockefeller and others create additional “charitable” entities (that hire their own employees and consultants). The LDS endowment exceeds $100 billion; Harvard approaches $40 billion – enough to fund every one of their 10,000 students current annual tuition of $75,000, or $750 million, less than 1.9% of the principal, every year and never run out.

Perversion: Foundations based on the premise of capitalism now contribute to opposing entities. Pew Charitable Trusts contributes to NPR and the Ford and Rockefeller Foundations to anti-capitalist, openly socialist Center for American Progress and Alliance for Green Revolution.

Proliferation: March of Dimes, polio effectively eradicated, now advocates for “the health of moms and babies” with only 1,500 employees.

Vagueness: Bezos’ new foundation states that “to address the climate crisis, we must address inequality” and Bloomberg’s spends on “sustainable cities”. In the educational and research worlds, the goals are often not measurable.

      These issues may lead to donor fatigue and be self-fulfilling, without market pressure and “governors” such as pricing and competition. What to do? How to find the right organization to give? Consider smaller and local and goal directed.

Fulfillment of Mission

         This is often counter-intuitive. For many philanthropists, the reason to donate and keep donating is to make a difference. To be certain the intended results actually happen. To that end, meaningful and measurable goals are vital.

        Dallas’ OurCalling exists to reduce homeless populations. The 1970s saw a mass elimination of mental institutionalization, without any reasonable replacement. Since 80% of homelessness is a result of substance abuse or psychiatric diseases, giving a blanket and a sandwich only temporarily and partially salves the symptom, doing little to solve the problem. OurCalling, discovering the reasons for their homelessness, delivers the emotional and material resources to live beyond their challenges and provides information resources to the beneficiaries to help themselves.

      Capitalism funds philanthropy. The more successful charities mimic capitalism, and often they “sunset” after 75 years. They help those who will help themselves. There is a substantial responsibility in charitable giving, including good stewardship. Putting itself out of business is the greatest success.

Next up on July 26th is MLLG’s inimitable take on the 2020 election.
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