Category Archives: Charity

You’re Welcome: Charitable Gifts Prompt Statist Ire

14 Friday Dec 2018

Posted by in Central Planning, Charity, Uncategorized

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Charitable acts are sometimes motivated by a desire to cultivate a favorable reputation, or even to project intelligence. Perhaps certain charitable acts are motivated by guilt of one kind or another. Tax deduction are nice, too. But sometimes a charitable gift is prompted by no more than a desire to help others less fortunate. It’s likely a combination of motives in many cases, but to gainsay the purity of anyone’s charitable motives is rather unseemly. Yet Gaby Del Valle does just that in Vox, casting a skeptical eye at Jeff Bezos’ efforts to help the homeless through his Day 1 Fund.

“Last week, Amazon founder and CEO Jeff Bezos announced that he and his wife, MacKenzie Bezos, were donating $97.5 million to 24 organizations that provide homeless services across the country. The donation is part of Bezos’s $2 billion ‘Day 1 Fund, a philanthropic endeavor … that, according to Bezos, focuses on establishing ‘a network of new, non-profit, tier-one preschools in low-income communities’ and funding existing nonprofits that provide homeless services.”

Del Valle says Bezos deserves little credit for his big gift for several reasons. First, Amazon very publicly opposed a recent initiative for a $275 per employee tax on large employers in Seattle. The proceeds would have been used to fund public programs for the homeless. This allegation suggests that Bezos feels guilty, or that the gift is a cynical attempt to buy-off critics. That might have an element of truth, but the tax was well worthy of opposition on economic grounds — almost as if it was designed to stunt employment and economic growth in the city.

Second, because Amazon has been an engine of growth for Seattle, Del Valle intimates that the company and other large employers are responsible for the city’s high cost of housing and therefore homelessness. Of course, growth in a region’s economy is likely to lead to higher housing prices if the supply of housing does not keep pace, but forsaking economic growth is not a solution. Furthermore, every large city in the country suffers from some degree of homelessness. And not all of those homeless individuals have been “displaced”, as Del Valle would have it. Some have relocated voluntarily without any guarantee or even desire for employment. As for the housing stock, government environmental regulations, zoning policies and rent control (in some markets) restrains expansion, leading to higher costs.

Finally, Del Valle implies that private efforts to help the homeless are somehow inferior to “leadership by elected officials”. Further, she seems to regard these charitable acts as threatening to “public” objectives and government control. At least she doesn’t disguise her authoritarian impulses. Del Valle also quotes a vague allegation that one of the charities beholden to Amazon is less than a paragon of charitable virtue. Well, I have heard similar allegations that government isn’t celebrated for rectitude in fulfilling its duties. Like all statists, Del Valle imagines that government technocrats possess the best vision of how to design aid programs. That attitude is an extension of the scientism and delusions of efficacy typical of central planners. Anyone with the slightest awareness of the government’s poor track record in low-income housing would approach such a question with trepidation. In contrast, private efforts often serve as laboratories in which to test innovative programs that can later be adopted on a broader scale.

While selfishness might motivate private acts of charity in some cases, only voluntary, private charity can ever qualify as real charity. Government benefits for the homeless are funded by taxes, which are compulsory. Such public programs might be justifiable as an extension of social insurance, but it is not charity in any pure sense; neither are it advocates engaged in promoting real charity, despite their conveniently moralistic positioning. And unlike private charity, government redistribution programs can be restrained only through a political process in which substantial payers are a distinct minority of the voting population.

Public aid and private charity have worked alongside each other for many years in the U.S. According to Russ Roberts, private giving to the poor began to be “crowded-out” during the Great Depression by a dramatic increase in public assistance programs. (Also see Doug Bandow’s “War On Charity“.) It’s certainly more difficult to make a case for gifts to the poor when donors are taxed by the government in order to redistribute income.

The statist war on private charity can take other forms. The regulatory apparatus can crowd-out private efforts to extend a helping hand. Chloe Anagnos of the American Institute for Economic Research (AIER) writes of a charity in Kansas City that wanted to provide home-cooked soup to the homeless, but health officials intervened, pouring bleach into the soup. I am aware of similar but less drastic actions in St. Louis, where organizations attempting to hand-out sandwiches to the poor were recently prohibited by health authorities.

Private charity has drawn criticism because its source has driven economic growth, its source has opposed policies that stunt comic growth, and because it might interfere with the remote possibility that government would do it better. But private charity plays a critical role in meeting the needs of the disadvantaged, whether as a substitute for public aid where it falls short, or as a supplement. It can also play a productive role in identifying the most effective designs for aid programs. Of course, there are corrupt organizations and individuals purporting to do charitable work, which argues for a degree of public supervision over private charities. But unfortunately, common sense is too often lost to overzealous enforcement. In general, the public sector should not stand in the way of private charities and charitable acts, but real generosity has little value to those who press for domination by the state.

National Endowment for Rich Farts

08 Wednesday Mar 2017

Posted by in Big Government, Charity, Subsidies

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Wailing has begun over the possible defunding and demise of the National Endowment for the Arts (NEA). How could those cretins propose to eliminate an institution so very critical to promoting artistic expression? If that’s your reaction, you haven’t thought much about the main beneficiaries of federal sinkholes like the NEA. Granted, at $146 million annually, it is not a major federal budget item, but I’d rather not stoop to defend a lousy program because it’s small. So what’s my beef with the NEA, you ask? Read on.

First, any implication that the NEA is the lifeblood of the arts is laughable. No, the arts won’t die if federal funding is denied. Jeff Jacoby quotes figures suggesting that grants from the NEA represented less than 1% of all support for the arts and culture in the U.S. in 2015. Great art was created prior to the establishment of the NEA in 1965. Without the NEA, such bungles as “Piss Christ” would have met with less acclaim. As such a minor funding vehicle, eliminating the NEA won’t make much difference to artists, but it will end a subsidy for wealthy patrons, who can and do provide support for worthy projects, but also derive essentially private benefits from the federal arts spigot.

A large share of NEA grant money goes to non-profit organizations that are already subsidized to the extent that they are not taxed. (Let’s face it: the term “non-profit” itself is often a term of art.) Large arts organizations, which receive a significant share of NEA grants, often have highly-paid administrators and sumptuous facilities. Contributions to those organizations are tax-deductible for the donors. And few of those organizations provide art to the public for free or at a discount. Indeed, as noted at the last link, they often charge significant prices for attendance, and their audiences include a disproportionate percentage of high-income patrons.

Lawrence Reed argues persuasively that government need not subsidize the arts in an article in his series on the Cliches of Progressivism. Here are the highlights:

  • “Government funding of the arts… carries with it all the downsides of dependence on politics.
  • Claims that arts spending is magically “multiplied” are specious and usually self-serving, and never look at alternative uses of the same money.
  • Culture arises naturally and spontaneously among people who chose to interact with each other. Art is part of that, but it also competes with all sorts of other things people choose to do with their time and money.
  • If art is truly important, then the last thing we should want to do is politicize it or divert it toward those things that people with power think we should see or hear.”

Reed’s comment regarding “multipliers” might need some explanation in this context. The NEA’s defenders often claim that each dollar of NEA grant money results in multiple additional grants from other sources, but there is absolutely no evidence to support this claim except for a requirement that NEA grants be matched at the state level (not to mention a requirement for a state-level arts agency). Obviously, that represents another cost to taxpayers. It is quite possible, in fact, that the NEA and matching state grants act as substitutes for, and depress, private arts giving. See this piece in Forbes for more background. This NBER research utilized a large panel data set on individual charities and found only mixed support for the proposition that government grants encourage private contributions. In fact, the estimated effect was ambiguous for individual categories of charitable giving (which did not explicitly address the arts as a category). In any case, a positive cross-sectional effect of government grants on private giving for individual charities is consistent with a negative effect on other charities that do not receive public grants.

In a 20-year-old report from the Heritage Foundation, Stuart Butler offered a list of reasons to defund the NEA, which have held up well. Here, I provide eight that seem relevant:

  1. The arts will have more than enough support without the NEA: See above.
  2. Welfare for cultural elitists: See above. NEA grants fund a number of big and very elite organizations, but they would have you believe that it’s a veritable welfare program for the arts. That is a huge distortion. There is no question that the distribution of patrons of these organizations skews to the wealthy.
  3. Discourages charitable gifts to the arts: See above. Is the award of an NEA grant the equivalent of establishing a credit record to an arts organization? This might hold up for a few small organizations with projects the NEA has funded, but again, the support for this proposition is anecdotal and self-serving, and the numbers are small. And is there an implied stain on the legitimacy of any organization unable to win such a grant?
  4. Lowers the quality of American art: Committee decisions and central planning are not conducive to the spirit of creativity. Public institutions are often guided by political agendas, and government-sanctioned art stands in sharp contradiction to the ideal of free expression. Butler quotes Ralph Waldo Emerson: “Beauty will not come at the call of the legislature…. It will come, as always, unannounced, and spring up between the feet of brave and earnest men.”
  5. Funds pornography: this is not my hot button… it’s an issue only to the extent that public funds should not be used for purposes only flimsily in the public interest that many taxpayers find morally repugnant.
  6. Promotes politically correct art: See #4 above. The merits are then judged on the basis of criteria like race, ethnicity, and gender identity, not the quality of the art itself.
  7. Wastes resources: Butler offers a few examples of the waste at the NEA, a shortcoming common to all bureaucracies. The NEA funds organizations that behave as non-profit cronyists, engaging in lobbying efforts for more support. Butler also cites evidence that recipients of government grants in the UK hire more administrative staff than non-recipients, and tend not to reduce ticket prices.
  8. Funding the NEA disturbs the U.S. tradition of limited government: I suppose this goes without saying….

The federal government in the U.S. was granted a set of enumerated powers in the Constitution, and promoting the arts was not one of them. It wasn’t as if the subject didn’t come up at the Constitutional Convention. It did, and it was voted down. Today, entrenched interests at organizations like the NEA and National Public Radio distort the character of the constituencies they serve. In reality, those constituencies  are heavily concentrated among the cultural and economic elite. The NEA and NPR also promote the fiction that they are all that stand between access to the arts and culture and a bleak, artless dystopia. Give them credit for creating a fantasy about which the political left readily suspends disbelief.

Charitable Intent

31 Saturday Dec 2016

Posted by in Charity, Redistribution, Socialism

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charity

I’m not accustomed to writing about religious matters, but I must say that I’ve never been persuaded that Jesus himself approved or advocated for socialism and state-enforced redistribution of wealth. Instead, I believe that Jesus would have endorsed the message above: charity inheres to individuals, and it lives in their hearts. It is not a concern that individuals can ever satisfy by promoting public tax and transfer policies, pressing claims on the resources of others.

This week, an essay on this topic caught my eye. It appeared in Lawrence Reed’s “Cliches of Progressivism“, at the Foundation for Economic Education: “#42 – ‘Jesus Was a Progressive Because He Advocated Income Redistribution  to Help the Poor’“. It covers a number of Biblical scriptures sometimes quoted in support of this notion, and Reed’s considered refutation of each. I provide just a few of Reed’s examples below, but read the whole thing, as they say:

“Make my brother share the wealth“:

“In Luke 12: 13-15, Christ is confronted with a redistribution request. A man with a grievance approaches him and demands, ‘Master, speak to my brother and make him divide the inheritance with me.’ The Son of God, the same man who wrought miraculous healings and calmed the waves, replies thusly: ‘Man, who made me a judge or divider over you? Take heed and beware of covetousness, for a man’s wealth does not consist of the material abundance he possesses.’ Wow! He could have equalized the wealth between two men with a wave of His hand but he chose to denounce envy instead.”

“Sell all your goods and share“:

“What about the reference, in the Book of Acts, to the early Christians selling their worldly goods and sharing communally in the proceeds? … In his contributing chapter to the 2014 book, ‘For the Least of These: A Biblical Answer to Poverty,’ Art Lindsley of the Institute for Faith, Work and Economics writes,

‘Again, in this passage from Acts, there is no mention of the state at all. These early believers contributed their goods freely, without coercion, voluntarily. Elsewhere in Scripture we see that Christians are even instructed to give in just this manner, freely, for “God loves a cheerful giver” (2 Corinthians 9:7). There is plenty of indication that private property rights were still in effect….’“

“Render Unto Caesar…“:

“‘Wait a minute,’ you say. ‘Didn’t He answer, “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s’ when the Pharisees tried to trick Him into denouncing a Roman-imposed tax?” … It’s found first in the Gospel of Matthew, chapter 22, verses 15-22 and later in the Gospel of Mark, chapter 12, verses 13-17. But notice that everything depends on just what did truly belong to Caesar and what didn’t, which is actually a rather powerful endorsement of property rights. Christ said nothing like ‘It belongs to Caesar if Caesar simply says it does, no matter how much he wants, how he gets it, or how he chooses to spend it.’

The fact is, one can scour the Scriptures with a fine-tooth comb and find nary a word from Christ that endorses the forcible redistribution of wealth by political authorities. None, period.“

While I generally agree with Reed’s analysis of this last point, I believe he missed the real message regarding any legitimate claims Caesar might have possessed. It is a statement about the value of material goods relative to faith and acts in the name of God. Obviously, as Reed says, it is not an endorsement of a power to tax and transfer.

The teachings of charity in the Bible have to do with the goodness of voluntary, self-motivated generosity. There are no lessons advocating compulsory taxes and transfer payments. If you say that Jesus would have supported such programs as deeds of a caring society, I would question your logic on several grounds. First, there are always political motives at play in crafting such policies, which usually include vote-buying and scapegoating. In that respect, those policies fall short of the standard for “good works”. Second, as already noted, the power to tax is backed by the police power of government, not quite the sort of “giving” about which Jesus preached. And, by extracting resources from those in a position to give unto others, tax and transfer policies reduce the capacity for private generosity. Granted, a charitable tax deduction might establish an incentive strong enough to encourage a level of continued giving. But then, the “noble” social deed becomes the hostage of tax policy, administrative definitions, rulings relative to recipient organizations, and the whims of self-interested politicians. A presumption is that individuals will not perform good works in sufficient amounts. Therefore, the state must step in, along with an army of bureaucrats and lobbyists who can be counted upon to feed off the taxpayers’ largess. The individual acts of charity encouraged in Jesus’s teachings could hardly be subject to greater convolution.