Philanthropy is a Terrible Way to Fight Poverty

Philanthropy is a Terrible Way to Fight Poverty

by Ted Miller

(originally published January 2020 in Tumbleweird)

The word philanthropy comes from combining the Greek philo, meaning love, and anthropo, meaning mankind or humanity. The dictionary says philanthropy is an “altruistic concern for human welfare and advancement.” But is it really our love for all humanity that motivates philanthropic giving?

Americans are notably generous. In 2018, we gave $427 billion to charity (source: nptrust.org). Charity is so much a part of our core values that we even incentivize charitable giving through federal tax deductions.

And a lot of good is done with that charity. Food banks, medical research, homeless shelters, animal welfare, the arts, religion—the list of charities is long and varied. In fact, there are over one and a half million charitable organizations in the United States.

Everyone has a favorite charity. Just scroll through your Facebook feed to see friends asking you to donate to some worthy organization for their birthday.

Most would say all of that philanthropic good should be celebrated, but I recently read an opinion piece that argued against philanthropy. 

Why would anyone be against charitable giving?

Philanthropy relies on the generosity of the wealthy who have the power to decide who is deserving of their charity, and who is not. As the rich amass wealth, they return a small portion to the less fortunate subject to their whim, not determined by the needs of others. Rich donors are celebrated for their largesse while actually doing very little to end poverty.

In spite of America’s generous giving, philanthropy does not feed the hungry, heal the sick, or house the homeless. Twelve percent of Americans live below the poverty line, and 18.5 million of them are in deep poverty with a household income of less than half the poverty threshold (source census.gov). Thirty million people still lack health insurance. One in eight Americans are food insecure. Half a million are homeless.

Jeff Bezos, founder of Amazon and the wealthiest individual on the planet, recently was praised for donating $98.5 million to his own charity to help combat homelessness. That donation is less than one tenth of one percent of his net worth of $110 billion, a percentage that is insignificant to his wealth. And that donation will have very little impact on the rate of homelessness in America.

A few years ago, I was discussing the importance of the government social safety net with a friend who felt that the government isn’t the best way to provide welfare. 

“Too inefficient,” he said, “and I don’t trust the government deciding who gets my money.”

In my friend’s view, the church should take care of the poor, free from government interference. I asked him which church would be able to administer such a program. Who decides who gets what? In the Christian faith alone, there are hundreds of denominations, each with their own value system and interpretation of scripture. Churches can’t even agree on theology, let alone come together to administer a common program that would take care of the needy regardless of their faith or any other factor. How could any charity possibly be efficient in meeting the needs of the poor if it has to coordinate with a million other organizations, each with its own rules, priorities, and administrative overhead?

Government bureaucracy may get in the way of efficiency, but a government of the people is the best system we have to fairly reach every American. We already have programs in place that work. Social Security and Medicare were enacted specifically to ensure that every senior has a minimum pension and affordable access to medical care. Poverty among the elderly would be devastating without those programs.

Can we really afford to eliminate poverty altogether? 

In his article “How Much Money Would It Take to Eliminate Poverty in America?” Matt Bruenig estimated we could do so with less than $200 billion a year. That’s less than one percent of GDP (source: prospect.org).

The Tax Cuts and Jobs Act of 2017 will cost the federal government over $2 trillion in revenue over the next ten years, with the majority of benefits arguably going to corporations and the wealthy. We could have eliminated poverty in America with that amount.

Eliminating poverty actually would be something that reflected a love for humanity.

I’m not saying you should stop giving to charity. I’ll continue to donate to my favorite charities and try to make a difference in the things I care about. But I know that no matter how much I give, I can’t make a dent in the rate of poverty. To make a difference requires an effort on a national scale.

We produce enough food to feed the world. We have the means to take care of the sick. We have the ability to end poverty. 

If taking care of each other is truly an American value, we can afford to eliminate poverty with a tiny change in our spending priorities.