Feeding the Needy or Bolstering the Bureaucracy

One reason why many private charities are both more efficient and more effective than government welfare programs is because charities in the private sector are accountable to the people who contribute to them. There’s a significant amount of variance in administrative and fund-raising overhead among different charitable organizations. For example, the American Red Cross spends 6 cents out of every dollar contributed for overhead, while the American Cancer Society spends 31 cents out of every dollar for overhead.* Private charitable organizations are required to make this information available to the public. As a private contributor, you can choose the charities to which you contribute, and make sure you get the best return on your investment for whatever causes you support.

The government, on the other hand, does not publish the percentage of money allocated for social welfare programs that goes to bureaucratic overhead. Given the usual proliferation of bureaucracy in government, I’d be willing to bet that the overhead is pretty high. But you have no way to find out. Nor do you have any choice in the matter, even if you knew.

Nevertheless, there are people who, even while acknowledging that government welfare programs are less efficient and less effective than private charities, still believe the government should appropriate their (and everybody else’s) money to pay for them. Why? They believe that the very fact that it’s involuntary is a good thing. There are two reasons people think involuntarism is good.

  1. They have very little faith in human nature. They believe that they themselves are good, but most other people are not. Consequently, they believe, if the government didn’t force people to support humanitarian causes against their will, they wouldn’t support them at all. What they don’t realize is that empathy is a fundamental aspect of human nature. Empathy is not only the root of conscience, but also of altruism. When we see someone in need, we have an instinctual impulse to help them. However, by delegating that role to the government, we absolve ourselves of the need to take personal responsibility for the welfare of our fellow man. From the perspective of social evolution, that’s not necessarily a good thing.
     
  2. They want to feel like humanitarians but, if it were left up to their own discretion, they’re not sure they would be as generous as the government is with their money. It isn’t that they have such great faith in the government, but that they’d rather hand over the responsibility to someone else than to accept that responsibility themselves. Then they can feel good about supporting social welfare without having to make the hard decisions themselves.

Unfortunately, the ultimate result of leaving it up to the government is that less of the money spent to aid those in need actually benefits the people who need it, and more of it gets absorbed into the ever-expanding bureaucracy. Private charities have to compete in the free market, where benefactors vote with their dollars.

* Charity Navigator provides comparative data on charitable organizations, incuding how much they spend on actual program services vs. overhead.


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Published in: on January 21, 2008 at 10:44 pm  Comments (22)  
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  1. “One reason why many private charities are both more efficient and more effective than government welfare programs is because charities in the private sector are accountable to the people who contribute to them.”

    And the public sector isn’t accountable to the people that vote?

    “Given the usual proliferation of bureaucracy in government, I’d be willing to bet that the overhead is pretty high.”

    Read that…”Since I don’t like govt….I’ll just assume the worst.”

    I would argue strongly that it is “conservatives” in this country that have little faith in human nature and assume the worst about people. This is a key reason, IMO, why they fear govt….if one person can’t be trusted, then surely more than one person working together (through say a democratically elected govt.) can’t possibly be trusted.

    No one holds a gun to my head when I contribute the American Cancer Society or the Salvation Army BTW. Together we can do more than we can individually. The idea that the free market is the solution to everything is silly.

  2. No, the public sector is not accountable for the success of its social welfare programs, because the people who pay the bill have no choice but to continue paying for it.

    Of course no one holds a gun to your head when you contribute to the American Cancer Society or the Salvation Army. You contribute of your own free will, and you choose which charities to which to contribute, based on your own criteria. You just made my point for me. Thank you.

  3. “No, the public sector is not accountable for the success of it’s social welfare programs, because the people who pay the bill have no choice but to continue paying for it.”

    Get together a bunch of your like-minded friends and vote out the people that are running those “unsuccessful” programs or ordering that those “unsuccessful” programs be run. It’s called democracy, and it works.

    My point was don’t be so sure that those of us that champion social welfare programs don’t give on our own too. Your biases are obvious here.

  4. Mr. Guy, I don’t assume that you don’t contribute to private charities as well. However, if you had the option of using the portion of your taxes that get allocated to social services to directly support charities that meet your criteria (assuming you do your homework), your money would be spent more efficiently than running it through the bowels of the government bureaucracy.

    The more layers of bureaucracy you have, the more money gets absorbed by it along the way to its final destination. Nowhere are there more layers of buraucracy than in the federal government.

  5. What’s the whole point of this then if not to assume that liberals don’t like giving to charity?

    “They want to feel like humanitarians but, if it were left up to their own discretion, they’re not sure they would be as generous as the government is with their money. It isn’t that they have such great faith in the government, but that they’d rather hand over the responsibility to someone else than to accept that responsibility themselves. Then they can feel good about supporting social welfare without having to make the hard decisions themselves.”

  6. I proposed two reasons why some people might prefer involuntary “charity” to voluntary. You don’t seem to agree with either of them. So why do you think it needs to be involuntary to be effective?

  7. You’re “involuntary” jargon is a biased misnomer. What you’re talking about is tax money and how it’s used. You don’t like how a portion of your tax money is used, and you have a right to that line of thinking. That doesn’t make it wrong, period, though.

    We really can do better acting all together, via the public *or* private sector, then we can alone. No one is advocating getting rid of private charity…just that it’s obviously not up to the task of dealing with poverty alone.

  8. I knew someone once who was involved in a group that protested the taxation system as it is, because they wanted to be able to choose where their taxes went. Some went to the extreme of not paying their taxes in protest. I thought that was interesting. Now, the government ‘services’ and ‘welfare’ that this group didn’t care to contribute to were things like the the military, the DOD, the FBI, the CIA, and corporate welfare.

    The point I’m making is, the percentage of tax money that goes to poverty relief or giving a leg up to those without resources is miniscule compared to all of those other government ‘services’ and programs. Take the term “small business” for example -according to the government, which dispenses assistance through the SBA, a “small business” includes those with up to 200 employees. I don’t know about you, but that is not a ‘small business’ in my book, it does not fit what I would call fledgling enterpreneur. I could go on and on here just on the topic of government ‘incentives’ and padded no-bid contracts to no-accout mega corporations and all, but I won’t.

    Take a look at that ‘Death and Taxes’ map I referred to (linked) in my last blog post. It shows proportions of our taxes alloted to what.

    So I brought the rationale of this particular anti-tax group up to someone else years ago, and they explained why it’s not such a hot idea to let citizens choose individually, where their tax money goes. Enough to make me think twice about that idea, anyway. I forgot what the reasoning was, I only remember it vaguely, to have seemed somewhat logical. . . . but I think it was along the lines of all hell would break lose if people could choose where their tax money went.

  9. Exactly…just look at how things usually go in communities where they get to vote on school or city budgets. Nobody likes to have their taxes raised.

  10. I don’t favor the government giving welfare to businesses either. Neither “small businesses” nor megacorporations. I don’t favor subsidies or protectionism. That’s not what the government is for. The government is there to protect us, and to protect our fundamental rights and liberties. Its purpose is not to support anybody or to manipulate the free market.

    Justifying the government’s ill use of taxpayers’ money in one area because they spend even more in another is not a valid argument. There are legitimate functions of governement, and those, and those alone, should be funded by the taxpayers.

  11. So, the DOD can spend as much as they want to?

  12. Not as much as they want to, but as much as they need to. Unfortunately, like any other government funded endeavor it’s difficult to control where the money goes. Just like anywhere else, if strict accounting practices, audits, and oversight aren’t maintained, we end up with ridiculous overspending, deals being cut with contractors through lobbying efforts, embezzlement, etc. That needs to stopped. Penalties need to be prohibitive. Enforcement needs to be absolute.

    However, if we’re talking about actual expenses of supporting and maintaining our military strength, that is one of the fundamental legitimate functions of the federal government, and one of the few truly legitimate purposes for levying federal taxes on the citizens.

  13. “that is one of the fundamental legitimate functions of the federal government, and one of the few truly legitimate purposes for levying federal taxes on the citizens.”

    Not to beat this issue to death, but what are the others?

  14. “Just like anywhere else, if strict accounting practices, audits, and oversight aren’t maintained, we end up with ridiculous overspending, deals being cut with contractors through lobbying efforts, embezzlement, etc. That needs to stopped. Penalties need to be prohibitive. Enforcement needs to be absolute.”

    Well, we’re definitely not getting any of that on the ‘classified’ 45 Billion going to the Defense Department.

  15. (hi, Not)

    “Justifying the government’s ill use of taxpayers’ money in one area because they spend even more in another is not a valid argument.”

    It’s not justifying anything, it’s simply putting it in perspective.

    I haven’t gotten to the part where I might share a different point of view of what the purpose of government is, I don’t think.

  16. […] presents Feeding the Needy or Bolstering the Bureaucracy posted at Government is not your […]

  17. Have you sent this article to the “Economics and Social Policy” carnival? They aren’t listed on any of the carnival categories–you have to type their name in the search bar, but they DO exist and are craving articles like this one!

    BTW–you’re in for the Libertarians carnival. I’m hosting the next one.

  18. Thanks for the heads up, Wenchypoo. I’ll check out the Economics and Social Policy carnival. I’m looking forward to the next issue of the carnival of Libertarians.

  19. Love your site!

    “Get together a bunch of your like-minded friends and vote out the people that are running those unsuccessful programs or ordering that those unsuccessful programs be run. It’s called democracy, and it works.”

    Here’s the problem with your statement… Liberals (most democrats and many republicans) are handing out more and more social welfare to those that they are in turn exempting from the income tax rolls. You need to understand that this is one of the ways (along with the tax code) that our current politicians buy votes. As the number of social welfare recipients become larger than the number of income tax payers, it becomes increasingly difficult for the tax payers to have a say in our democracy (republic). Why shouldn’t the welfare recipients keep voting for people that give them something for nothing? The welfare recipients have not vested interest in keeping the social welfare programs cost efficient.

  20. “As the number of social welfare recipients become larger than the number of income tax payers”

    When is *that* going to happen?? I suspect that we’re no where near it happening right now. Since when do the poor vote in large numbers anyway??

  21. “When is *that* going to happen?? I suspect that we’re no where near it happening right now.”

    Currently, 50% of Americans pay 96% of the Federal Income Taxes. I would guess that these tax payers receive less in government benefits than others.

    Compare the above numbers with 53% of Americans receive some sort of government paid social welfare. This figure includes benefits like welfare, Medicaid, WIC, Financial Aid, housing subsidies, Medicare, Social Security, etc. I would guess that many of these individuals are not in the 50% of Americans paying Federal Income Taxes.

    The poor haven’t voted in as large of numbers as other voting blocks in past elections, but certain political parties keep hope alive by promising them a redistribution of wealth. Finally, if you believe the statistics above, you can see that you don’t have to be poor in this country to pay no federal income taxes or receive government benefits.

  22. The government doesn’t say how much goes to overhead? The CBPP somehow got data:

    http://jaredbernsteinblog.com/everyone%E2%80%99s-got-a-right-to-their-own-opinions%E2%80%A6/


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