Is private philanthropy more efficient than the state at helping the poor?

CNN today features an article talking about the corruption in America’s charity industrial complex. One of the things that has happened most recently is that many charities are funneling most of their donation money to the for-profit fundraising firms they use to solicit people. CNN gives the example of the Kids Wish Network foundation which gives 3 cents out of every dollar to the kids that it raises money for, the rest going to consultants and for-profit fundraisers. One of the basic assertions of the Reagan era of the last three decades has been that private philanthropy is always better than the government at taking care of people in need. I’m pretty sure that even the least efficient government bureaucracy can do better than 3 cents on the dollar. It seems like the profit motive does a plenty good job of creating corruption and waste. Capitalism at its finest!


40 thoughts on “Is private philanthropy more efficient than the state at helping the poor?

  1. Thomas,
    You can take this with however many grains of salt you wish, but I think the labels of Democrat & Republican are meaningless in this conversation because they’re both in on it. It was Bill Clinton who signed the bill (repeal of FDR’s Glass-Steagall act) which swept away the last safeguards preventing the investment houses from irresponsibly gambling with our money.

    The largest contributor to Barack Obama’s campaign war chest in 2008 was Goldman Sachs. And when Obama care passed they popped champagne corks at the closing bell on Wall Street because the big guys who run the for-profit-health-care-industry wrote it.

    You betcha we have socialism. It’s for a tiny fraction of very powerful financial oligarchs.

    • “You betcha we have socialism. It’s for a tiny fraction of very powerful financial oligarchs.” Thanks for that. The only true statement I’ve heard recently connecting America and socialism. Socialism for the 0.1%.

  2. Odd. It was the NY Times that reported that the democrats in the senate voted the nationalization of healthcare through at night. And, at night, it is generally dark, except at particular times in the far north.

    Rebuttal? Really? For the majority of those who voted for the current resident of the white house, it was a simple case of those who pay little or nothing in income tax, etc., voting for a candidate who promised to give them the democrat equivalent of bread and circuses via federal social programs with the cost being paid by the children and grandchildren of other people whose future the democrats have mortgaged to China to provide political currency with which to buy votes. It’s that simple.

    As to silliness, pretending that the democrat nationalization of healthcare in the U.S. is not socialism is an exercise in futility… except for those who do not deal with reality.

  3. As regards transportation, etc., there are community needs that are best addressed by community actions. One routinely sees this in water and sewer projects, flood control, etc. These projects are supported by sufficient demand. That is not the case with public transportation projects such as buses and trains. Except in very large metropolitan areas, there is simply not enough usage to pay for the function and maintenance of such projects. Unless subsidized by taxpayers, such projects fail due to lack of funds.

    In the 1950’s our nation embarked upon developing a extensive public transportation system based upon highways, roads, streets, etc., which individuals accessed through personal vehicles or else by using buses, etc. Today that is the system in place. It well serves the overwhelming vast majority of Americans.

    Some sort of public transportation system would be more efficient. But, the costs of implementation, maintenance as well as the costs of individuals accessing that system would be extreme. The day may come when such a system will be developed. If that is done with the support of those who actually pay for it, fine. Otherwise, as with the recent nationalization of healthcare in the U.S., it will be just another federal social program partisan politicians use to buy votes.

    • I’m plenty cynical about politicians but something rubs me the wrong way about assuming that there aren’t any authentic motives at play in trying to provide health care for uninsured and uninsurable people. You’re overreaching to look at it as purely buying votes. It’s convenient to have this view of government because if someone on the other side notices that a law has been written by an oil industry lobbyist, then you can say well that’s just what politicians are supposed to do: buy votes and the industries that pay for their advertising. You’ve decided that government cannot possibly have a legitimate purpose in helping people and you’re locked into a confirmation bias loop.

      • Cynicism? No. Just realism. Reality is that the current administration and its partisan supporters are seeking to advance a socialist agenda that is hostile to the best interests of the nation. They are acting purely to enhance their partisan grip on power. They are using federal and state social programs as vehicles by which to reward support and encourage dependence upon government. They are not acting to encourage independent personal responsibility. The recent extreme partisan nationalization of healthcare in the U.S. exemplifies this administration agenda. Providing healthcare for anyone was never the intent. The intent was always to extend partisan political power. Nothing more. If they’d actually wanted to “reform healthcare” they could have done so. They just would not have been able to do it to suit their own partisan interests. Trying to blur that reality by bringing extraneous and irrelevant issues doesn’t change this. It is that simple.

    • There’s also a double standard in what you’re saying. It’s okay with you for people to act in their self-interest as consumers but not as voters. If a majority of people want Obamacare and vote for it, they’re clearly idiots, but if a majority of people create a particular demand on the market as consumers with their dollars, then society would be behaving rationally.

      • It is O.K. for taxpayers to act in their own self-interest. They pay the bills. They should have the say so about how things are done. It is not O.K. for those who pay nothing to suppose that they should have equal say in how other people’s money is to be spent. If they want someone to pay them attention, they need to put their money on the table. It’s that simple.

        A majority of people did not vote for the partisan nationalization of healthcare in the U.S. The vote was conducted in the dark of the night by democrats acting in behalf of the current resident of the white house to serve a patently socialist party agenda hostile to the broad needs of the nation. They supposed that given time opposition would lessen. Now that people are finding out how negatively it will affect them, they are objecting strenuously. Very few if any democrats, especially those in districts where they must face a hostile electorate, are now strutting around boasting their supporting that travesty.

        If a majority of people create a market demand, that is their choice. It is not forced on them by a dark of the night vote by people whose actions are hostile to their best interests. If a person does not want to spend their money for whatever item is offered in that market, they are free to keep their money. For a market to act otherwise would not be rational. It’s that simple.

        • “Dark of the night” vote. What happened in November of 2012 was a rebuttal of what you’re saying. For better or worse, a majority of people in our country rebuked what you’re saying. I voted in the daytime. I’m not sure that anybody voted at night, at least not unless the lines were long like in Florida where Rick Scott was trying to repress the vote. This is getting sillier and sillier. Nothing about Obamacare is socialist. But there’s no point in telling you that. It’s basically about as productive as having a conversation with the guys who send those emails from Nigerian generals with $10 million for you to deposit in the bank for them. You’re just spouting talking points.

  4. People used to do million dollar deals on a handshake. Their word was their bond, and people could trust a man who gave his word.

    There was also a time when the big playahs on Wall Street would have been led away in handcuffs by federal marshals. Back then it wasn’t called free-market enterprise, it was called fraud.

    • Love the phonetic spelling — playah. The idea that corruption in capitalism didn’t exist before the sixties is a mythological romanticization of the past.

  5. “For example, when Obama came to office, there were 27 million people on food stamps in the US. Now, there is 48 million people on food stamps”

    And it had absolutely nothing to do with the deep recession that we’re still recovering from…

  6. If one wants to talk about corruption, attention must turn to the current administration’s use of social programs as a vehicle of political reward to cronies all at the expense of our children and grandchildren whose future they mortgage to fund their bread and circus giveaways. With private organizations the individual has a choice. He can choose to give. He can choose not to give. But, with the federal government, he has no choice. A party supported by people who mostly pay nothing forces him to turn over his money. There is no accountability. There is no regard for the will of the taxpayer. It is readily apparent that in the grip of the current politically driven hyper-partisan immoral administration, the federal government does a pretty good job of creating corruption and wasting taxpayer money. Socialism at it’s best!

    • So you would say that subsidizing the ability of a working class single mom to get milk and basic food items for her family because her minimum wage job only covers rent and insurance but not food amounts to a “political reward for cronies”?

      • Reading is fundamental. Response was made to the issue of private philanthropy as contrasted to government social programs. If you wish to explore the issue of extended socialism via the federal government programs of assistance, that will be fine. But that was not the subject of the initial post nor the response made.

        However, with regard to such federal social programs, suffice it to say that encouraging and enabling a lifestyle of dependence is pure poison to the best interests of the individual and society. Subsidizing destructive choices only perpetuates such behavior both initially and by extension in the lives of children raised is such a lifestyle of dependence. It’ that plain and simple.

        You do not have a right to have a car. You are unwise to buy a car simply because you want it. You are wise to buy a car if you can pay for it, as well as the cost of insurance, gas, repairs. You may share the costs of the road. But no one expects anyone to pay the costs of their vehicle. It is the same with getting married and starting a family. You do not expect someone else to pay the daily cost of rent, food, clothing, etc. either as a husband and wife or as parents with children. If you can’t afford to get married, you wait until you can afford to do so. If you can’t afford to have children, you wait until you can afford to do so. It’s that plain and simple.

        In the example you cited, immediate and short-term support would not be objectionable. It would be in the best interests of the mother and child as well as society. To support generational dependence is not in the best interests of either the woman, her child or society. It’s that plain and simple.

        The current administration has acted with calculation and partisan intent to expand the network of dependence on such social programs. These programs are then used by the administration and its representatives to press a left-wing liberal social agenda via legislation, etc. at the federal and state levels. People who pay nothing in income tax are encouraged to vote for the administration and its partisan supporters based on the promise that these programs will be protected and extended/enhanced. That is nothing other than a political reward. It’s that plain and simple.

        • Listen to what you just said though. “You do not have a right to have a car.” If you don’t have a car and you’re living in all but maybe 5 major cities in the country with halfway decent public transportation, you don’t have transportation to work which drastically limits your employability. The fact that we don’t have decent public transportation at all in most parts of the country is a huge obstacle to poor people being able to support themselves. It’s all because anything public or collectively owned is taboo according to the hyper-libertarianism of the Reagan era. Public transportation is an example of a collective investment that we could make as a society that would reap long-term benefits in terms of the self-sufficiency of people who use it. When you talk purely in the abstract, things sure are a lot more simple.

  7. Ben,
    Which version of Capitalism did you have in mind? The regulated version starting with the Roosevelt administration, or the unregulated version midwifed during the Reagan years?

    • I imagine he’ll say that Roosevelt was an even bigger communist than Stalin and that the New Deal is the most destructive, immoral government program that has ever been invented.

      • Morgan, as for “Roosevelt was an even bigger communist…” – no he wasn’t a bigger communist than Stalin, but the New Deal was a progressive milestone to be sure. It was the begining of the welfare state, and the means to collapsing capitalism through overwhelming the system until it could collapse and they could implement a collectivist system. Here is a quote from Roosevelt you’ll like:

        “Society has no business to allow degenerates to reproduce their kind… it is really extraordinary that people refuse to apply to human beings such elementary knowledge as every successful farmer is obliged to apply to his own stock breeding. Any group of farmers who permitted their best stock not to breed, & let all the increase come from the worst stock, would be treated as fit inmates for an asylum. Some day we will realize that the prime duty of the good citizens of the right type is to leave his blood behind him in the world & that we have no business to perpetuate citizens of the wrong type.” -Theodore Roosevelt

        “The presence of the negro is the real problem; slavery is merely the worst possible method of solving the problem.” -Theodore Roosevelt

        The first, real progressive president (an evil, racist man to his core) was Woodrow Wilson. He not only instituted the League of Nations (precursor to the UN), but he is also the man who established the Federal Reserve Bank and re-established the Federal income tax. Like Roosevelt and Hitler, Wilson believed in Eurgenics – the reshaping of human evolution by prohibiting less desirable races to breed. Woodrow Wilson, while governor of New Jersey, actually implemented forced sterilization programs in black neighborhoods. Eugenics, and building a master white race was the motivation behind Margret Sanger founding Planned Parenthood.

        Progressives, Fabian Socialists, and Communists have always had generally the same goals, they just had different methods of achieving them. Communists wanted it now, and so their means was revolution. Fabian Socialists thought that you could gradually progress toward the ideal and eventually achieve it over long periods of time… this became progressivism.

        Their goals remain the same today – abolishing the judeo-christian ethic while implementing a collectivist economic system and weeding out the undesirable (aka non-contributing) members of their utopian ideal.

        • I’m not sure whether to let you keep commenting because it takes too much energy to engage all the ways that you torture logic and spread misinformation. Planned Parenthood and Franklin Roosevelt are only grouped together in your mind as some sort of common team of “progressiveness.” There are a multiplicity of motives that people have for their values. To be willing to criticize capitalism is not to be an advocate of communism. It’s not a binary. I’m not sure that I’m going to let you use my blog as a platform for spreading your ideology. You just don’t seem to be here for genuine conversation. I just don’t see you receiving feedback and acknowledging places where other people in the conversation have valid points or something to teach you. It seems like you need to start your own blog rather than parasitically exploiting mine to advance your ideology.

      • BTW – I meant to say that those were quotes from “the other” Roosevelt. (I realize FDR was responsible for the New Deal, but I was making a point about progressivism and it’s roots.)

    • Muff,
      People used to do million dollar deals on a handshake. Their word was their bond, and people could trust a man who gave his word. These days you can’t even trust a contract anymore.

      Capitalism (and any form of self-governance) works best with moral agents who self-regulate based on a firm moral standard. Without a basis for a firm moral standard, it falls apart and increased legal regulation is necessary. However, regulation only breeds more regulation – it can never be a suitable substitute for morality because the bad actors will just try to find loopholes and ways around the legalism.

      The best medicine for capitalism and the best way to boost prosperity is to return the moral foundation to people en masse and then deregulate business. Capitalism’s problem is not the system, but the moral corruption of the agents in the system. Restore the moral foundation and you will restore capitalism’s success. The problem isn’t an economic one, but a spiritual one.

  8. Random Methodist Reader, when he said, “It seems like the profit motive does a plenty good job of creating corruption and waste. Capitalism at its finest!”

    I’m pretty sure Morgan wouldn’t call himself a communist (then again, neither does Obama call himself a communist – yet actual former communists do call Obama a communist, 1) , though he does adhere to many communist ideals without realizing it, and he regularly agrees with the progressive left of the USA, which is soundly communist.


    • I suppose you are an American? No-one ever spouts that much nonsense about ‘communism’ than Americans. Anthroplogcally interesting maybe, but otherwise completely useless…

  9. I think people want the government to take care of the poor because it puts the burden on someone else, not themselves. It’s easy to point at rich people and say they need to give more, it’s much harder to look at my own excess and reduce it for the good of someone else.

      • “Just be careful who you give money to, because it’s not going to get to the people who need it.”

        Yes it is. I can research where my money goes more efficiently than the government. is a great website for that.


    To be sure, there are a lot of scammers out there. It is a sad, sorry state of affairs. The cancer of progressivism marches ‘Forward’ toward Carl Marx’s anti-Christian utopian ideal. Capitalism only works when people have a strong moral foundation. As we become less and less influenced by Christianity, and more and more progressive and secular (as was Carl Marx’s vision – see the above linked article) as a society, we lose freedom and liberty as well. When people don’t have the moral strength to abstain from sin, the government must regulate behavior to a higher degree… and we move into hyper legalism. Both government and the church do this.

    In Marx’s writings he wrote about “the Jewish question”. In one word, the problem is “individualism” – or “egoists” as Marx calls them.

    For example, Marx writes: “The Christian state knows only privileges. In this state, the Jew has the privilege of being a Jew. As a Jew, he has rights which the Christians do not have. Why should he want rights which he does not have, but which the Christians enjoy?”

    He later goes on to offer the solution that is the heart and soul of all progressivism – it’s very purpose: “The most rigid form of the opposition between the Jew and the Christian is the religious opposition. How is an opposition resolved? By making it impossible. How is religious opposition made impossible? By abolishing religion. ”

    So while you may criticize the current socialist form of capitalism we currently practice in America, bear in mind that capitalism is the economic system that has lifted more people out of poverty than any other system in the history of the world, but it requires people of integrity. It requires morally superior participants that what we have now to really succeed – yet even in it’s current condition it is better than any alternatives.

      • This (and your question about moral superiority) is more of a trap then a question. If I said, for example, the roaring 20’s was the hayday of capitalism, you would point to racial inequality of that time period. At no time in our history were we morally perfect. But we used to allow prayer and the Bible in school… we didn’t used to have the same problems with drugs and pornography that we have now… we didn’t used to have to lock our doors at night. A much higher percentage of people used to go to church. Christianity is losing it’s influence on the culture.

        • So would you say that it was due to more moral governmental regulations or a more moral populace that things used to be better? Or both? What would you consider the age where the country peaked morally? Are we better in some ways than others now?

    • What do you mean by “poverty” when you say that? Would you say that the Amish are poor because they refuse to leave the 19th century? What capitalism changes is *the way* in which people are poor. It’s a load of garbage to say that it’s lifted people out of poverty. Prior to capitalism coming in, most of the people in the Third World lived a simple, agrarian lifestyle. As their governments have handed over their farmland to multinational corporations and because of getting bombarded by US “aid” (aka corporate welfare for the US agricultural industry who gets paid full price by the government for the corn, wheat, soy, and whatever else gets shipped to Africa), Third World farmers can’t compete so they move to the city where they live in shantytowns and try to support their families in the informal sector economy washing car windows and selling toothpaste and cigarettes on the sidewalk. Maybe they have a cell phone now which they didn’t have before, but the difference between their current poverty and their old poverty is that now we are creating shantytowns full of people who have no value to the global economy whereas before they could at least grow food and live a reasonably meaningful life even if it was shorter. Have you ever been to a Third World country? Go and visit one before you talk about how capitalism lifts people out of poverty.

      • Morgan, I define poverty as someone who can’t afford to have food, clothing, and shelter. Amish are not poor because in their own ecosystem and economy they have an abundance. They choose a simple lifestyle, not an impoverished one.

        There is a saying – “give a man a fish and he’ll eat for a day…. teach a man to fish, and he’ll eat for a lifetime.” I agree with you – one of the biggest problems as it pertains to world poverty is the government welfare industrial complex. For example, when Obama came to office, there were 27 million people on food stamps in the US. Now, there is 48 million people on food stamps. This is by design. It is the progressive agenda to overload the welfare system in order to cause capitalism’s collapse so they can “remold it closer to the hearts desire” (to quote the Fabian socialist mantra). See

        Benjamin Franklin said that if we want to lift people out of poverty, we need to make them uncomfortable in it. The progressive left is enslaving millions by promoting dependence on the state. The only problem is that the people who come to depend most on a communist or socialist state are always the first to be killed when the government decides it is overburdened (ie Mao, Stalin, etc).

        3rd world countries remain so because they have corrupt, greedy governments that stand in the way of their people’s success and prosperity.

        • “Benjamin Franklin said that if we want to lift people out of poverty, we need to make them uncomfortable in it.” Wow, that is abominably ignorant. The only cause of people being poor is their own laziness. We never have things like recessions where people get laid off and lose their jobs. Incredible.

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