Imagine tycoon A gives 600 million dollars to fight TB infections in the developing world, and tycoon B gives a similar amount to art museums. Is one donation morally better than the other? Does one answer a more compelling need?
I’ve been thinking about these questions lately as I’m trying to convert an old essay on “the cost of conscience” into a proposal to change the tax law of charitable giving to better incentivize donations that meet urgent human needs. (I’m presenting it at the normative political theory section of the American Political Science Association conference in Philadelphia this August. I highly recommend the conference–it’s so huge, there’s something for everyone.)
I really should be doing the tax research now…but I’m still stuck for a bit responding to people like James Otteson, Leif Wenar, and Peter Berkowitz, who tend to characterize charitable giving to people in LDC’s as a supererogatory (i.e., non-mandatory) duty. They target hard-core utilitarians like Peter Singer, who once claimed that all we make over $30,000 per year should go to the global poor.
Such an extreme claim makes a fat target. But what about a more modest claim? For example, a claim that, barring compelling circumstances to the contrary, someone in a developed country making over $65,000 per year should donate 1% of after-tax income to projects like the ones sponsored by Global Giving or Kiva? I think it makes sense to make contribution to a social minimum part of our own personal “moral minimum.” We have to start somewhere.
Posted by Frank3 on May 11, 2006 at 02:46 PM
Comments
Thanks again for all these great comments. I can’t do them all justice, but here are a few responses:
I’m not trying to so radically change the law that “urgent” donations overwhelm all others. I’m just trying to draw a bit more money to them. Ideally, people would maintain current levels of charitable giving all-around, and would just be motivated to give more to food and medical care by this change in the law.
But even if people start substituting urgent for other charitable purposes, I do not think it at all likely that such donations would dominate the charitable giving pool. People give for many reasons other than the tax deduction.
Fiona’s post from Kiva raises another interesting point–how socially responsible investment plays a role here. It would be interesting to think about such investment as a “donation” to the extent its return were lower than the investor’s best alternative.
Posted by: Frank | May 14, 2006 8:02:01 AM
savitri, I think you raise a good point. As far as the problems in devising an adequate metric, I think you could either do it the simple way: direct impact–how many people attend the opera, have TB, attend the institution–or indirect impact–in which case you’d count the people who love opera, the relatives of the TB afflicted, and of educated. I think the second is far more difficult to assess and to game. So, if I had my druthers, I’d limit it to direct impact. In this vein, this is exactly how Bill and Melinda Gates figured out what to do with their foundation. They calculated the dollar to benefit ratio of intervention in x, y, and z causes. They have become so prominent in the field of malaria–I think they are the largest private donors in history for malaria research and prevention and rival countries’ contributions–because they figured out that it only cost a few dollars per person to save lives in that field.
Here’s the Gates’ article, originally in the New Yorker, which I think is worth reading:
http://www.michaelspecter.com/ny/2005/2005_10_24_gates.html
Gates: “We do not measure ourselves at all by the amount given,” he continued. “We have taken on the top twenty killers, and for everything we do we look at the cost per life saved and real outcomes in terms of how things get improved. It’s fun, and it is also an enormous responsibility. But having my job at Microsoft is also fun and a huge responsibility. That is true for being a parent. Many of the most important things in life are like that. Why else would you want to get up in the morning?”
Posted by: Bart Motes | May 12, 2006 9:45:11 PM
Where would giving to educational institutions fall? Under “merely culture” or “urgent human needs?
If you index it to “how many people it helps”, as Bart Motes suggests, would you count only students who graduate, or the more indirect recipients of their education?
If the school is slanted toward science/research, would you give it more leeway (less if liberal arts)? Or would all be treated equally?
Would one distinguish among countries? Higher vs. secondary? Public vs. private?
Where does “rooted cosmopolitanism” fit?
Posted by: savitri | May 12, 2006 6:43:43 PM
This is a great question. Creating a weighted system of donor causes is no doubt opening Pandora’s Box, although perhaps this is a box that needs to be opened when looking at the levels of extreme poverty and suffering which exist. My opinion is that the only real defendable method would be to rank causes by the result of not addressing it. Preventing loss of human life would receive the heaviest weighting, causes which improve living conditions receiving the lightest weighting. When simply looking at the benefits the issue becomes overwhelming, when looking at the results of non-action, it becomes a little clearer.
There is another issue to note, which is a side comment really. Global Giving and Kiva are quite different in that Global Giving involves donating to a project, whereas Kiva involves loaning. In the majority of cases Kiva lenders get their money back, so this is not a true donation at all. While the difference appears minor, it is very significant when evaluating the effects from a bird’s-eye view. It is clear that donations are not going to solve all of the problems of the world, no matter how the IRS ranks them. We need to find more sustainable methods. Kiva is allowing a new form of social contribution, which is more about detouring your capital, or distribution of capital power, than convincing people to cede ownership of their capital.
Fiona Ramsey Customer Relations and Operations Manager, http://www.kiva.org [email protected]
Posted by: Fiona Ramsey | May 11, 2006 4:42:19 PM
A reading suggestion piggy-backed on a previous reading suggestion: The Economist has covered the question of “HOW people [should] give,” posed above by Ethan. The article “The Business of Giving” applauds modern philanthropists for their heavy involvement in how donations are spent. Those interested may find it here: http://www.economist.com/displaystory.cfm?story_id=5517605
Posted by: Christopher Cassidy | May 11, 2006 4:11:41 PM
It is all well and good to pose the question as wealthy urbanites giving to the art museum vs. giving to Oxfam or something similar, but I suspect churches rake in a lot more than art museums do. (Many churches give to overseas relief, but that’s a small fraction of what they take in.) So there would be a substantial political problem for anyone who tried to encourage people to donate more to relief organizations and less to churches.
Posted by: alkali | May 11, 2006 3:57:55 PM
Thanks, Ethan, both for the kind words and that great reading suggestion. I agree, it’s time for the “rooted cosmpolitans” to acknowledge the lexical priority of the immediately preventable suffering and dying that goes on because people lack very basic resources.
Bart, I like that practical suggestion about a “neutral” way of justifying the differential treatment of the types of charitable giving.
Posted by: Frank Pasquale | May 11, 2006 3:48:54 PM
“I think the question is a good one — but it is hard to imagine how the government could discriminate in the treatment of charitable giving against art museums and in favor of TB research — and find a fair way to administer such discrimination.”
Maybe you could index it to how many people it helps. In which case your metrics would be how many people attend the opera and how many people have TB.
Posted by: Bart Motes | May 11, 2006 3:27:25 PM
There are several questions. First, I think it absolutely makes a huge difference whether a donation is made to a artsy fartsy cause or to fight on the front lines of poverty. I’m sure you can argue that supporting culture is great, but it is also something that the individual gets a lot of direct usage out of. (And you can argue that there is a non-tangible benefit to the guy who donates to the poverty cause, social cred or what have you). I think it is also interesting that it is “right wing” organizations like churches that are often most involved in this kind of stuff. Although, of course, Bill Gates does his fair share too.
So, yes, I think that the tax benefit for donating money to poverty and disease fighting should be greater than funding avante-garde art…and cocktail parties at avante-garde art shows.
Posted by: Bart Motes | May 11, 2006 3:25:51 PM
Since you seem to have read almost everything, Frank, I hesistate to make a research recommendation. But when I was at the ALEA, Cooter (Berkeley) had a paper on the “Donation Registry” idea he’s been trying to sell for a few years. It should make for provocative reading — and a way to envision how the IRS can help incentivize charitable giving. Every time I’ve seen Cooter give a version of this talk (this was the third time — though this time a grad student of his was peddling the idea), someone asks the question you start with: don’t we care HOW people give, not just THAT they give? I’ve never heard a great answer — but I would suspect that by now Cooter has something in writing on the subject. I think the question is a good one — but it is hard to imagine how the government could discriminate in the treatment of charitable giving against art museums and in favor of TB research — and find a fair way to administer such discrimination. Surely there are some easy cases but most aren’t. Some at the ALEA suggested a parallel with tax exempt non-profits in the tax code.
BTW, my own personal view is that one shouldn’t spend too much time worrying about people like Berkowitz. Whatever sort of limits one can put on the Singer/Unger principle, one has to accept it is an aspirational ideal. The effects of Berkowitz’s moral worldview, I think, would be a much worse world — and that may be all one needs to say about it. There are obviously many hard questions about the applications of the Singer/Unger principle but I think it at least forces us to ask ourselves hard questions about how we use our resources, questions that can too easily be avoided if we seek to hack away at Singer/Unger and the hard-core cosmopolitans more generally. I’m working on a review of Appiah’s cosmopolitanism where I try to argue that the “rooted” cosmopolitans ultimately threaten global justice. “Rooted” cosmopolitans, like Berkowitz, let us off too easily. We don’t need any more excuses to go to the opera while others die of starvation.
Posted by: Ethan Leib | May 11, 2006 3:22:47 PM