The case against charities

A commenter writes,

charitable organizations will be [in] competition for donors and offer only care to make donors feel good about themselves. So charities will raise money for extreme cases like the British Charlie Gard and not say reasonable care rural clinics in Kentucky.

I agree that accountability to donors creates distortions. Only in the for-profit sector is accountability to customers a consistent, important factor.

Accountability in government is even less well developed than it is in charitable organizations.

I think that the role of competition and choice in fostering accountability is something that cannot be stressed enough. Instead, people over-rely on the intention heuristic, meaning that they treat charitable organizations and government programs as if their good intentions were sufficient to achieve good results. But good intentions do not substitute for accountability.

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14 Responses to The case against charities

  1. Andrew' says:

    What about charities that simply give cash to the victims?

    It would be pretty easy to rank charities on how much and what percent of receipts make it to victims.

    There could also be othere for straight cash to researchers and practitioners.

    So, efficiency is easy. Are we in agreement that straight cash is better than what we have now?

  2. asdf says:

    By this metric a crack cocaine dealer is doing more good for society then a charity. After all, they give the customer what they want.

    Its probably more accurate to say that intentions are important but insufficient. Just like “provides customer what they want” is important but insufficient.

  3. steve says:

    A lot of charities now go out of their way to provide accountability for how they spend your money. It is also fairly easy to find charities that channel money to rural health care. I have to think that people writing this stuff are not looking.

    Steve

  4. Flupo says:

    I’ve been reading your work for close to two decades (since your TCS days) and I’ve never disagreed with you more. I’d have to assume that the type of people who run charities is the same as the type of people who run for-profit companies in order to agree. My experience with charities, however, is that a lot of them have religious or other non-profit maximizing worldview that put a premium on helping their clients in a qualitatively different way than for-profit companies.

    I agree that something like the Clinton Foundation doesn’t fit this mold, but I neither see that as a charity nor do I see it as indicative of what charities do.

    • Roger Sweeny says:

      I worked in public schools for many years and we all believed that we were not profit-maximizing and that we were doing what was best for our students. We also had a great ability to lie to ourselves and to look after our own interests.

  5. andrewknorr says:

    One bad thing that donors do is spread their money around. If a donor with a $100 million charity gives to multiple organizations, then what happens? The grant proposals, the meetings, the officers, the audits, etc etc all pile up. To maximize efficiency, donors should give to one charity and see if it works. Individual donors have no need of diversification, unlike society at large. Money manager Robert Wilson is one guy who I think did a very good job of picking charities, you can look him up.

  6. Dan King says:

    I tend to agree with Mr. Kling, though some of the other commenters do raise good points.

    My own post–sort of about charity–is entitled If You Really Care About the Poor.
    trotskyschildren.blogspot.com/2016/12/if-you-really-care-about-poor.html

  7. Thomas Boyle says:

    The HTML parser removed content.

    “Provides customer with what someone else wants” just seems fraught with hazard. “Provides customer with what is in the customer’s best interest or what is in society’s best interest” raises the question of “according to who?”

  8. asdf says:

    You don’t have to answer that question definitively, simply not doing things you know aren’t the answer would be a good start. For instance, most crack cocaine dealers know what they are doing is wrong.

    Libertarians use “provide customer what they want” to turn off common sense about things they shouldn’t. They should stop doing that.

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