Do we need more ‘Charity’ (unorganized, personal giving) and less of ‘philanthropy’ (organized, scientific philanthropy)? While scholarship in the last 25 years of so indicates that there is a growing trend towards philanthropy, we are witnessing new arguments that what we need is really more ‘charity’. Bureaucratized and ‘scientific’ ways of giving don’t really work. Don’t believe me? Look at Give Directly, one of the leading proponents of charity. They do claim, however, to be doing ‘scientific’ philanthropy, but in reality, it is direct one-to-one giving, and per one definition, would count as ‘charity.’
Their argument is simple: give the poor money directly, unconditionally and they will figure out how to use it. To the best of their knowledge. There is some wisdom in that. This is not traditional charity or caritas, which focused on ‘character development.’ The assumption in this model of thinking of the individual was that the poor were poor because they were lazy, drunks or just stupid. This is the traditional Christian view of caritas, practiced in the settler colonies in the founding days of America or any traditional society. But there are other ways to imagine how the poor live and work. Poverty is a complex topic, and I will not attempt to analyze it here. But let’s just say that the poor have a bad reputation. Most poor people I know – and have dealt with – are decent, hardworking people. Many of them have not had opportunities to advance, in some cases, they have been dealt with heavy financial blows that keep them poor and in some cases, they are victims of structural issues. So, how does on help the poor, overcome their poverty? There are several possibilities – one is to fund ‘strucutral’ changes in the system and the other is to fund the individual directly.
When it comes to immediate impact and results that can manifest themselves, there is nothing faster than individual giving. While there are limitations (and many assumptions) on how this works, it is a model that seems to have attracted a lot of attention, especially given the criticism of large international NGOs that spend a lot of money, on overheads. As Paul Niehaus, President of GiveDirectly argues in this paper, the donors usually are concerned with ‘warm glow’ or don’t really care about learning what happened after the donations were made. The cost of such learning is high, he argues. “The well-intentioned benefactor has a limited desire to learn. He always prefers to avoid ex-post feedback as this constrains his beliefs.” This means that the intermediaries – i.e., NGOs create a ‘need’ for the service and attract donations. This is not a case of misleading donors, but one of asymmetric information and also a different theory of change. GiveDirectly offers one model of giving that is direct, (seemingly) impactful and something worth a try. My mom did this for many decades and it seems to have worked – at least in the case of many of my cousins, who have better jobs, education, thanks to my mother’s ‘giving’ directly.