Choosing to Solve Poverty

Some things are simple but not easy. Solving the problem of poverty is one of those things. But here at The Spherical Model, we have the solution:

Free-enterprise economy combined with charitable giving and service.

We don’t solve poverty by taking from those who have been able to acquire more than they currently need through hard work and good fortune and giving their money to those who have less, for whatever reasons.

How do we know? Prime evidence is the “War on Poverty,” now ongoing for over half a century. I wrote about it two years ago, when it turned 50 ("The Fifty Year War" part I and part II). It is the largest, costliest war ever. Yet poverty rates remain about the same. And government goes on taking money to transfer even though their approach is provably faulty.

Graphic I used in 2014, found here

Maybe there’s something more than numbers involved.

Prosperity requires a free people engaged in a free market—all of which requires a law-abiding, righteous people. Things are interrelated. There’s something that comes up in all three spheres—political, economic, and social—and that is choice.

We need the freedom to choose how we will live, what we will do in life, what we will believe, what we will pursue. So political freedom will set the foundation for greater prosperity than any tyranny can do.

We need a free economy, in which we choose how we work, and more particularly how we spend what we have earned. This encourages the incentive to work harder and innovate, so that we can enjoy the fruits of labor.

But one reason “the poor are always with us” is that some are unable, for reasons that are no fault of their own, to take care of themselves, either temporarily or permanently. Some might lack physical or mental capacity to earn enough to care for themselves. Some might be in the position of taking care of a loved one, which prevents them from earning income.

In a civilized society, we recognize these people in need, we have softened feelings for them, and we want to help. We choose to help.

Those who think there is some other way have always failed, and will always fail. You can’t force good will, or charity, or caring.

But how do we get people to do the necessary giving? Because, what if people just don’t do it? Are we just going to let people die on the streets?

No, no one wants people dying on the streets. But if giving power to government to do charity for us would work, we’d have evidence of that by now. Instead we have proved that coercive “charity” doesn’t work.

Remarkably, though, even though government has tried to usurp this charity role from the people, we have nevertheless been charitable. In the January issue of Imprimis, Karl Zinsmeister writes of “Charitable Giving and the Fabric of America.” He offers some surprising evidence of our choice to give. He says,

Private philanthropy is crucial in making America the unusual country that it is. Let’s start with some numbers. Our nonprofit sector now comprises eleven percent of the total United States workforce. It will contribute around six percent of gross domestic product this year. To put this in perspective, the charitable sector passed the national defense sector is size in 1993, and it continues to grow. And these numbers don’t take volunteering into account: charitable volunteers make up the equivalent—depending on how you count—of between four and ten million full-time employees. So philanthropy is clearly a huge force in our society.

He gives examples of a few of America’s larger philanthropists: Ned McIlhenny, Alfred Loomis, John D. Rockefeller, George Eastman, Milton Hershey. These are all businessmen who then used their considerable wealth to do good in ways they were passionate about.

Then he told the stories of some lesser known, smaller philanthropists, because only 14 percent of charitable giving comes from wealthy people giving to big foundations. And only 5 percent comes from corporate giving. “The rest comes from individuals, and the bulk of it comes from small givers at an average rate of about $2,500 per household per year.”

One such person was Anne Scheiber, a reserved auditor. She retired with $5,000 in the bank in 1944, lived frugally, invested wisely, and amassed $22 million by her death in 1995 at age 101. She left her legacy to Yeshiva University so “bright but needy girls could attend college and medical school.”

Then there was Elinor Sauerwein, who frugally mowed her own lawn, painted her own house, and grew her own garden. She was motivated by a goal to give all she could to the Salvation Army—which was $1.7 million in 2011.

A shoe-shine named Albert Lexie donated his tops to the Free Care Fun of the Children’s Hospital in Pittsburgh. From 1981 to present, he donated over $200,000, which was a third of his income.

There are others. You may know some. People who give to benefit society through education, or hospitals, or on-the-ground charities helping the poor and homeless. There are private societies preserving our history, maintaining libraries, and funding scientific developments.

America is great because America is good. So far. Partly because America is free to choose to be good.

Zinsmeister mentioned a comparison done by historian Daniel Boorstin: “In 1880, the state of Ohio had only three million inhabitants but 37 colleges. That same year, England had 23 million inhabitants but only four colleges. The difference was small-scale philanthropy directed towards education.”

Those who worry that charitable giving can’t possibly do enough look at private philanthropy with variations of three criticisms:

1.       It’s a drop in the bucket.

2.       It’s amateurish, chaotic, and lacks expert coordination.

3.       Private donors act from impure motives.

Zinsmeister then tackles each of these in turn. As for the first, he points out, “The Gates Foundation alone distributes more overseas assistance than the entire Italian government.”  And that single foundation is only “a tiny sliver of American philanthropy directed overseas. Members of American churches and synagogues send four-and-a-half times as much to foreigners in need each year as Gates does,” and far exceeds the foreign aid budget of the US government. Recent annual totals are $31-$39 billion.

About lack of coordination, he offers evidence that local people, observing a problem and acting to meet a need, are more likely to succeed than distant planners. He contrasts a woman named Lizzie Kander, who funded a settlement house for Russian Jewish immigrants around the turn of the last century—she made and sold a cookbook to fund the thing—with his experience working in the White House West Wing.

He asserts, “The healthiest forms of societal improvement result from lots of little experiments. Some will fail, but others will succeed and be copied. This is the method by which private philanthropy proceeds.”

As for the third concern, impure motives, he says, so what? Most donors have altruistic motives beyond a tax break or getting their name on a building. Still, if good things get done, why worry about mixed motives?

What if the government got out of the “charity” business tomorrow? Could we figure things out? I believe we would. I believe good people follow natural impulses to help one another. And the more we are personally connected locally, the more that is true.

My belief is that the natural freedom of the internet makes connecting givers to organizations and individuals working to make a difference easier. There’s also the possibility of fraud there, but I think we’ll get better with time at recognizing and weeding those out.

Some people have money to give. Some have time, talents, or expertise. There are so many ways to give and serve the community.

community service illustration from JustServe.org

My church has organized a website (I think it’s national and international) for connecting givers and servers with organizations in need of the help: JustServe.org. In Houston we’ve had a version of that for a while: VolunteerHouston.org.

For larger disasters and ongoing humanitarian projects, my favorite is LDS Philanthropies and Humanitarian Aid, where 100% goes to aid, because overhead is handled through other, separate donations. 

A couple of my most read posts relate to community service: “Community Service Is Better Than Community Organizing,” and “Peanut Butter News.”

Zinsmeister concludes: “Early on, Americans discovered that voluntary action to lift others up is not only possible, it is superior to the kind of state paternalism that diminishes freedom. Private charitable giving and the spirit of volunteerism have been essential bulwarks of the American character, and they remain indispensable to our national success.”

So, can we eliminate poverty? There will always be poorer people, but in a civilized society they are clothed and fed and sheltered. And paths are made available so that most can find a way out of being at the bottom of earners. That happy outcome happens not from government “being giving,” but by individuals in a free society choosing to give to one another.