Monday, October 20, 2014

Charity doesn't cut it, we need a new and stronger New Deal

(As opposed to pure cash relief, or breadlines, or dependence upon charity, many New Deal policymakers preferred the creation of large work & construction programs that unemployed, able-bodied Americans could apply to. So, they created programs like the Civilian Conservation Corps and the Works Progress Administration. In the audio above, listen to President Roosevelt's rationale for the creation of such programs.)

Republican Joni Ernst, the Iowa candidate for U.S. Senate who has been featured in some of the most bizarre television campaign ads in political history, wants struggling Americans to stop utilizing democratically-formed government programs (like SNAP and Medicaid) and start becoming more dependent on churches and charity ("Joni Ernst: Poor People Aren't Entitled to Food, Clothing, or Health Care").

(See the Joni Ernst campaign ad where she gleefully tells viewers that "I grew up castrating hogs on an Iowa farm" (link), as well as the campaign ad showing Ernst riding a motorcycle, promoting her conservative "farm girl" background, informing us that she "carries more than just lipstick in her purse," and showing her firing a gun--in a leather jacket--while the narrator talks about the Affordable Care Act (link).)

Ernst's disgust for a government that helps all its citizens--instead of a government that limits itself to pampering the super-wealthy--is a disgust shared by many right-wing politicians. They feel that non-wealthy Americans who face hard times (layoffs, low wages, medical emergencies, etc.) should be directed towards church or charity, and that it is not the proper role of government to assist citizens-in-need (even though the U.S. Constitution was established, in part, to "promote the general welfare" and even though Article I, Section 8 of the U.S. Constitution gives Congress the power to tax and "provide" for the "general welfare").

(The description for this photo, taken in Albany, New York, reads "Crippled Children - Red Cross and WPA workers aiding sufferers of infantile paralysis at the Therapeutic Project." Some people find this type of government assistance highly offensive, even when private health care services for people-in-need are inaccessible because of high cost and/or lack of health insurance. It's difficult to understand why they feel this way. Photo courtesy of the National Archives and the New Deal Network.)

Charity--while certainly helpful--isn't going to cut it for our nation's most pressing problems, and here's a few reasons why:

1. Some give more than others. Super-wealthy Americans are vacuuming up more and more wealth--while the middle-class shrinks--but the rich give a lower percentage of their wealth to charity than other groups do. So, think carefully about what that means: Those who typically give more to charity are now less able to, while those who give less to charity are gobbling up more and more of our nation's assets. That doesn't bode well for charitable endeavors, and it also doesn't bode well for those Americans that right-wing politicians want to become more dependent upon charity.

2. The money doesn't always go where it's most needed. As struggling Americans are looking inside their empty refrigerators, the rich primarily give to things like universities and the arts. It's great that rich Americans give money to museums, art galleries, community theaters, etc., but if your primary concern is more about paying the electric bill, or having enough food, or having a roof over your head, this is not good news at all. And sure enough, as the middle-class is shrinking, donations are down for food banks across the nation--the very same food banks that Ernst and her fellow right-wing politicians want struggling Americans to rely upon (see, e.g., here, here, here, here, here, and here, for just a few examples. Also see "U.S. food banks struggle to meet new demand caused by food stamp cuts").       

3. Many charitable foundations are reluctant givers. Professor Ray Madoff, from Boston College Law School, recently wrote, "Charities have begged and pleaded for increased distributions from these warehouses of wealth, to no avail" ("A Better Way to Encourage Charity," New York Times). Madoff suggests tax code changes to motivate foundations to give more but, having worked in the charitable giving field, I can tell you that there are numerous reasons why foundations are reluctant to give--reasons that would not be affected by changes to the tax code (e.g., internal politics, ideological disagreements with the applicant's mission, a non-social welfare focus, a desire to derive interest income from invested funds, and so on). This is not to suggest that tax changes would not be beneficial, but only that the benefits might be very limited. 

4. Some charitable funds are locked up in banks--for years. Some wealthy individuals choose to put their charitable dollars in "donor-advised funds." But there's a problem with this type of fund, as journalist Leon Neyfakh highlights: "Though legally public charities, they are more like holding tanks that let would-be philanthropists deposit money, collect the tax benefits up front, and then decide later which causes they actually want to give to. Legally, there’s no limit to how long the money can sit there" ("Donor-advised funds: Where charity goes to wait; $45 billion of American philanthropic money has been given—but not received," Boston Globe). Can you see the double-whammy here? Both federal revenue (because of the tax deduction) and current need (because the donated money can sit in an account for years) are stymied.  

5. Compared to government programs, charity is inconsistent. Social Security has been one of the greatest and most consistent poverty mitigation programs in human history--perhaps the greatest--whereas charitable foundations, for example, don't even come close. Indeed, many foundations actively avoid getting involved in situations where they may end up as an organization's perpetual source of funds. Hence, organizations that provided basic services to people-in-need often (perhaps usually) face yearly struggles to get the necessary funding.

(WPA poster, image courtesy of the Library of Congress Prints and Photographs Division.)

The purpose of this blog post is not to disparage charitable giving. We should all be grateful when people give back to the community. Instead, the purpose of this blog post is to point out that there are multiple reasons why we should not rely on charitable giving. We should, instead, create and strengthen governmental programs. There is nothing wrong with We the People helping We the People. That is why the Constitution includes a promotion of, and a provision for, the general welfare.

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