
The Charitable-Industrial Complex - tedsuo
http://www.nytimes.com/2013/07/27/opinion/the-charitable-industrial-complex.html
======
andrewljohnson
The conclusion of the article presents a false choice, and is flabbergastingly
short-sighted:

"Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old
girl on the planet gets sold for sex."

First, wifi on every corner is progress. Second, you might need wifi on every
corner to prevent the sex slavery. Third, even if you don't need the wifi, you
can have both the arguable utility of wifi for the poor, and stop the sex
slavery.

I don't understand how anyone can fail to see the spread of the internet as a
big step in the spread of knowledge, fail to marvel at our modern day printing
press and all the good it has done. "Internet everywhere" seems like a pretty
good philanthropic strategy to me.

~~~
capex
From the business point of view, 'wifi everywhere' is a lot more desirable
than say, clean water everywhere.

~~~
nine_k
Clean water is often harder to provide. People that lack clean water usually
don't have any use for wifi; if they had enough money for a wifi-enabled
gadget, they'd probably spend it on clean water provisioning or other life-
support needs. So they are a bad market for wifi deployments.

From business point of view, "well-off people everywhere" is very desirable,
since poor people are poor customers. Unfortunately, this problem is not
readily solved by pouring in some modest money.

Imagine donating to North Korea; probably the money will mostly end up in
military programs, even if some of the money will actually feed the
undernourished. But political influence is usually a big no-no.

~~~
hamsternipples
the first thing I thought about is paying my taxes in the US:

most of my money will end up in military programs [0], but I do have the
option to opt a percentage of my money out of those military programs by
donating to charity -- a tax break.

I agree, clean water should be a top priority, whether it's cleaning oil
spills, rain water, pollution, or drinking water, whatever...

another controversial point of philanthropy: is it better to fund a program to
solve an existing problem using money, or to instead invest that money instead
into education? I just don't know...

[0] looking up military spending, I found multiple results. some sites
claiming as low as 19% of income tax goes to military spending, and others
claiming much higher numbers.. ~45%
([https://www.warresisters.org/content/how-pie-chart-
figures-w...](https://www.warresisters.org/content/how-pie-chart-figures-were-
determined)) -- without a doubt though, and according to wikipedia, the USA
definitely tops the charts by a long shot. it also appears (acc to wikipedia)
that south korea spends more than it's northern counterpart
([http://en.wikipedia.org/wiki/List_of_countries_by_military_e...](http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures))
on military programs

~~~
thejteam
The difference in the quoted percentages is usually due to whether or not
social security and medicare taxes and spending are included. If you include
them, it is about 19 percent. If not, 45 percent sounds about right.

Either way, it is a lot of money.

------
bane
blocked by paywall

One thing I've learned from many so-called "philanthropists" is that hosting
charity events can be a great status and money making/saving opportunity for
those in the business of it. If you've ever watched a "real housewive of ..."
episode, those wacky ladies are _constantly_ hosting charity events and
provide a pretty good example of how this works:

1) Get a really good tax accountant and lawyer.

2) Establish a charity (in the U.S. they're called 501(c)(3) organizations and
have various laws about how they operate. Dedicate it to "Cancer Research" or
"Helping Orphans" or whatever.

3) Set yourself up as the head of the charity, give yourself a respectable,
but not over the top salary. This is the "organizational overhead" you often
hear about.

4) Recruit a bunch of free volunteers concerned about your cause and host a
charity event. Well done theme parties can bring in the most money. Include a
donation envelope in case people can't come but still want to "support your
cause".

5) Collect money. Make sure you remind everybody that their charitable
donations are tax deductions! This will keep them coming. Guilt your friends
into coming as well. If you get popular in the charity circuit you can even
start charging a "cover charge for the even expenses, recommended donation
is...$xxx" or "$xxx per plate" if it's a dinner.

6) Subtract misc expenses for room rental, supplies, cheap gifts for
volunteers etc.

7) Take the donated money, subtract a percentage for "organizational overhead"

8) Donate the remainder to your cause or if you have time, spend the money on
"donation events" where you get press for doing some kind of community service
(advertising).

9) Get your charity to spend money on office equipment, cars, travel expenses
etc. Deduct as business expenses.

10) Any left over money is a bonus to you for a job well done (can't show a
profit!)

11) rinse and repeat

There actually _are_ good charities out there that do good work, but
separating them from this kind of self-service is hard to do.

~~~
lisper
> blocked by paywall

It's a very interesting paywall, too. It continues to block me even if I clear
all my local state (cookies and localstorage), turn on private browsing, and
disable Javascript. But it does NOT block me if I use a different browser. I
can't figure out how it works. Anyone here have a clue?

~~~
gamblor956
The block lasts until you restart the browser. This same problem pops up in
IE9/10.

~~~
lisper
Hm, I tried restarting the browser and still get blocked. I'm using Safari
5.1.9 on Snow Leopard

------
jmillikin

      > It’s time for a new operating system. Not a 2.0 or a
      > 3.0, but something built from the ground up. New code.
    

The author's metaphor here assumes a world where a massively complex system,
which is basically working but has some problems, can be "fixed" via
replacement by a new system designed from scratch.

In all of human history, how many times has this ever actually worked?

Continuing the comparison to operating systems, the three most popular OSes of
today (Windows, Mac OS, Linux[1]) are built on foundations dating back to the
dawn of microcomputers. The intervening forty-odd years have seen hundreds of
competitors invented and abandoned, while the last scion of CP/M holds its
ground and the descendants of UNIX consume the world.

Or going back to the world of international politics, what is the half-life of
a newly established form of government? All of our philosophy, reason, war,
and technological advancement have brought us nothing but small improvements
to systems of democracy founded thousands of years ago in Greece and Rome.

The NSA scandal and ongoing derailment of the Arab Spring show that we still
don't know how to even _control_ our own governments, much less design
sweeping improvements to them.

[1] I'm counting Android as Linux despite not being GNU/Linux, because it runs
the Linux kernel.

\---

On the topic of charity:

One might think of charity as a medication, given to a sick society. It is
effective in some cases, ineffective in others, and sometimes outright
harmful[2]. Objecting to charity in general is equivalent to advocating
against antibiotics.

Charity can't solve massive structural problems in a society, but when
properly focused it can do things that malfunctioning governments aren't
capable of. Just giving twenty dollars to everyone in Pakistan will make their
own lives temporarily better, but spending twenty dollars per capita on Polio
eradication will improve the lives of their children, and grandchildren, and
so on until the end of time.

[2] See: the near-annihilation of Africa's textile industry due to donations
of second-hand clothing.

~~~
eli_gottlieb
It's not that all our advancements have brought us only small improvements
over ancient Greek democracy. It's that most advancements over ancient Greek
democracy haven't even been tried at the national level due to constitutional
conservatism.

~~~
njr123
How can you say that? So many different systems of government have been tried
in the last 2000 years, and the only ones that have lasted long term (> 200
years) seem to be democracy and feudal systems.

~~~
eli_gottlieb
I meant that the space of possible democracies is very large compared to the
very, very small space of democratic systems anyone has actually attempted to
use.

------
leot
Were the wealthy truly interested in promoting greater social good, they would
put their efforts into reforming tax systems and global finance in order to
help make the world more fair and just.

Replacing income taxation with wealth taxation (plus a value-added tax), e.g.,
could simplify and make far more equitable the system we operate within, while
greatly improving incentives and aligning them with our society's openly
professed values. For some reason, there are surprisingly few think tanks and
lobbying groups advocating for such a change.

[Edit: I'm kind of amazed to see this getting down-voted. I would love to hear
from those who think this comment isn't helpful.]

~~~
dnautics
the a priori assumption here is that the government is 'better' than private
interests in deciding how charitable funds should be spent. Why do you think
that these newfound revenues coming into the treasuries of the state will be
subjected to good stewardship? The government is liable to be using those
funds to fight unjust wars, subject innocent people to draconic and unjust
policies with escalating costs (like the drugs wars), and so on and so forth.

And there are plenty plenty plenty of corrupt businessmen, but it's way worse
in government. right now there is a controversy going on in the central basin
municipal water district in california, where overbilling contractors (and
kickbacks) happened, the son of an LA councilman was 'hired' as the director,
paid six figures to do nothing, and had benefits such as a retirement plan and
paid tuition for an expensive private undergraduate degree. How do you get
away with that? Almost every director of a nonprofit charity knows that there
are rules upon rules prohibiting conflicts of interest that you have to bend
over backwards making sure you don't violate in case the IRS comes after you.

~~~
quinnchr
People think government is better at it, because that's what the evidence
overwhelmingly points to.

The U.S. routinely top's the list of the world's most charitable nations
(private charity): [http://www.npr.org/blogs/thetwo-
way/2011/12/20/144035063/sur...](http://www.npr.org/blogs/thetwo-
way/2011/12/20/144035063/survey-u-s-takes-top-spot-as-most-charitable-nation)

While we also top the list of OECD countries for child poverty
[http://www.oecd.org/els/soc/CO2.2%20Child%20poverty%20-%20up...](http://www.oecd.org/els/soc/CO2.2%20Child%20poverty%20-%20update%20270112.pdf)

Now compare those poverty rates with the amount of public and private social
spending:
[http://www.oecd.org/media/oecdorg/directorates/directoratefo...](http://www.oecd.org/media/oecdorg/directorates/directorateforemploymentlabourandsocialaffairs/Chart2_SOCXWeb2012.JPG)

More public social spending has a higher effect on poverty than more private
social spending.

~~~
dnautics
since when does the amount of spending have anything to do with its
effectiveness? And anyways, by what criterion is the OECD judging what
constitutes "social spending"? Finally, the child poverty rates in that graph
is a really fine comparison. The US has a lower child poverty rate than
australia or japan, which would have been surprising to me. I'm not terribly
embarassed by living in a country whose child poverty rate is equivalent to
New Zealand's.

~~~
quinnchr
There is a pretty clear link between amount of social spending and poverty:
[http://www.epi.org/publication/ib339-us-poverty-higher-
safet...](http://www.epi.org/publication/ib339-us-poverty-higher-safety-net-
weaker/)

I'm not sure what graph you are looking at, according to Chart CO2.2.A there
are only five countries with higher child poverty rates: Chile, Turkey,
Romania, Mexico and Israel.

This is their methodology for determining social spending:
[http://www.oecd.org/els/soc/SOCXAnnex-
DescriptionProjections...](http://www.oecd.org/els/soc/SOCXAnnex-
DescriptionProjections.pdf)

------
cotega
I hope this doesn't sound like preaching.

In almost every discussion about charities and non-profits the main discussion
seems to revolve around the money we donate and how efficiently charities use
these donations. One thing that I find people forgetting is how valuable their
time can be to non-profits and how that often is way more valuable than
donations. Each one of you on HN certainly has a skill that would be valuable
to charities (especially small ones) whether that be technical help or in
taking your skills in finding customers for your startup and applying those
skills to fundraising for the non-profits. You would be surprised at how
limited many non-profits are in these areas and how even an hour here and
there each month can make a huge impact.

I realize many of you just don't have the time and I am not suggesting this is
for everyone. However, if you do, try sending a quick email to the director of
a non-profit you find interesting and you might be surprised at how happy they
are to hear from you.

~~~
nostromo
The primary thing most nonprofits need is money. Here, I'll give you an
example:

My mom ran a branch of Habitat for Humanity for a while. People universally
_loovvee_ Habitat. People were constantly volunteering, which is great!
However, most of the time, there just is no work to be done by volunteers.

The primary thing Habitat needs is land and construction materials (which
usually means: money).

People were sometimes upset about being turned away... but unless they could
donate land, money, or construction supplies, there just wasn't much unmet
need for general laborers.

~~~
zanny
I think you point a more systemic issue in the modern world. It isn't just in
non-profits, there is a general lack of land, money, and construction
supplies. First world infrastructure crumbles not due to a lack of unskilled
labor to set to paving streets with vehicles, it is a lack of those vehicles
for people to drive, and a lack of money to push politicians to allow it.

I'm not well versed at all in the problem, but I see it as a major one - there
needs to be some major innovations in materials extraction and distribution to
enable a next generation deployment of machinery to make the next round of
renovation globally possible. And there is just no one picking up supply to
meet that demand, mainly because while people _want_ to fix all the broken
infrastructure and build nations on new roads and proper housing, there is
just no machinery to meet the demand, and no money to pay for it.

------
raldi
Could someone rephrase this piece in the form of one or more "Instead of
__________, we should be doing ________" statements?

~~~
tptacek
Instead of conditioning improvement in the developing world on the largesse of
billionaires, we should identify the structural phenomenon that are retarding
quality of life there and invent new solutions that target those phenomenon
directly. Instead of buying condoms and bottled water for Haiti, we should fix
Haiti's government and economy.

~~~
yummyfajitas
_Instead of buying condoms and bottled water for Haiti, we should fix Haiti 's
government and economy._

This sounds dangerously close to colonialism. Or nation building to use the
more modern term, although the modern version of it is rarely ambitious enough
to actually succeed.

(As an example of the distinction, compare the colonial British efforts to end
widow burning, compared to contemporary American efforts to end honor
killings.)

~~~
tptacek
I think the author agrees with that concern, which is why he talks about
needing a whole new "operating system" of approaches to actually accomplish
this. Let's all just stipulate though that places like Haiti do in fact need
fixing.

------
krrrh
There seems to be a lot of concern in this discussion about charities that
have too much overhead, or people who work for charities that pull in salaries
competitive with for-profit. This econtalk with Dan Pallotta presents an
interesting counter-narrative. He says the non-profit sector is held back by
attitudes that discourage competing for top talent, risk-taking, and
innovation. If any group would be sympathetic to these arguments it might be
HN readers, but I suspect that these biases are pretty persistent.

[http://www.econtalk.org/archives/2013/06/pallotta_on_cha.htm...](http://www.econtalk.org/archives/2013/06/pallotta_on_cha.html)

------
tocomment
I came across this a while ago
[http://www.givewell.org/](http://www.givewell.org/)

It looked like a way to find more effective charities. What do you guys think?

~~~
michaelhoffman
I first came across GiveWell when their principals engaged in dishonest
behavior to pump it up on MetaFilter, an incident which is described here:

[http://mefiwiki.com/wiki/Givewell](http://mefiwiki.com/wiki/Givewell)

Since then, seeing GiveWell mentioned anywhere leads to an immediate feeling
of distrust.

~~~
tedsanders
To be fair, they have devoted a top level navigation link to their page of
mistakes. It seems like they try very hard to be transparent these days, even
going so far as to publish notes on conversations with charities.

But that was a shameful and embarrassing episode for them.

------
DanielBMarkham
I'm voting this up because it seems a heartfelt reaction against figuring out
that charitable giving is its own scam -- a scam by well-meaning people all
out to do good in the world, but a scam. By that I mean that there is no
feedback loop in place to assure the donors that they're wrong. Every deal is
one to save the day. Every idea is some great idea from one place transplanted
somewhere else. There's a business in assembling ideas into attractive memes
and then getting rich people to make themselves feel better by paying for
them. A very big business. So hats off to Buffett for pointing it out. I
especially like the term “conscience laundering”

Having said that, I call bullshit here. While he's done a bit of fumbling
around at what his end of the problem looks like, and he's certainly correct
that preventing slavery beats the shit out of having free wi-fi, I'm not
feeling he has any better idea of what the hell he's talking about than the
folks peddling the latest charitable cause. And he admits as much. So as a
plea for the system being broken, count me in. As any indication of way
forward? It's not in the essay.

I also want to point out that everybody seems to understand that you make
money in your life one way, you may find value in a completely different way.
But people giving money, most of which are rich, seem to be completely
detached from this concept. Working in a factory for two bucks a day and not
starving, while watching your family grow up and being involved in some
religious or civic group might be a freaking ton better than not being
"exploited" We cut ourselves slack for finding value in things other than
money, but we do not allow the same privilege to others. Because charities run
on dollars, we tend to subconsciously value their lives in dollars as well.
Bad premise.

Since the solution space is so thin, I'll take a flyer on what he _might_ like
to see. As opposed to the latest in charitable wizardry, my ideas and five
bucks will get you a cup of coffee.

Societies evolve by the flow of information and goods contributing to an open
market. Information flow to people? Education. Unrestricted goods flowing to
an informed buyer? A win for all parties. Innovation and solutions formed by
cross-pollinating folks with radically different backgrounds and knowledge?
Another win for everybody. It's all information and trades. Bad societies
control information and trade. Good societies let a thousand flowers bloom and
grow by productive creative destruction. So far, many folks are on-board with
this. _But what we continue to forget is that forms of society itself is just
another structure that can benefit from these same principles_.

My position is that the problem here lies in our hidden assumptions. Every
charitable intervention has a bunch of a priori assumptions made about what
would work or wouldn't. As Buffett said, many times it's just playing MadLibs
with good ideas. This is the wrong way to look at the problem, and will
continue to lead to suboptimal solutions.

If you're looking to do something radical, encourage governmental units to
become much smaller. Instead of having one third-world country rule tens of
millions over a large area, replace it with a hundred smaller governments with
much less land area. Create zones where completely new ways of getting along
can be tried -- a new form of socialism, radical objectivism, whatever.
Instead of arrogantly thinking we know the answer to the problems and they
must fit into one of our predefined categories and work inside existing
societal structures, work on giving people ownership and control over trying
zillions of their own ideas, and let's all watch and see what works for them.
In this way, we actually _create_ a huge pool of new information that didn't
exist before about what works or doesn't work in various circumstances instead
of just rehashing theory. This information can be shared and will have value
to many millions more. And then we can all move forward.

Our problem is that we insist on taking highly-complex and intricately-
detailed problems and then solving them by banging on them with feel-good
hammers of convenient and easily-understood slogans from our own life
experiences.

~~~
otisfunkmeyer
I totally agree with you and would like to point out some of the work being
done (and the major govt obstacles faced) by people like Earthship inventor
Michael Reynolds in Taos, New Mexico.

In the same way that big business has no interest in being disrupted, it seems
that governments have a similar weight and a similar self-preservation
interest.

Regardless, this is the good fight worth fighting.

To take your $5 and raise you 5 more, this can be down scaled even further to
the level of the individual or family unit. Here in the heart of Los Angeles
(Venice/Fairfax), we have created a sort of permaculture oasis with 25+ fruit
trees and various semi-professional/DIY systems of self-sustenance. This is
work that is A) inherently rewarding B) able to inspire others and C) is a
living, breathing example of the world we want to live in, and is
significantly easier than most would think, especially if you learn slowly
over 5+ years.

I highly recommend the documentary on Michael Reynolds. His work is far ahead
of its time and shows that there are existing lifestyle repos ready to be
forked and branched and then merged back into a continuously integrated
updating best-way-to-live OS. The doc is here:
[http://www.youtube.com/watch?v=QVX2wdDH19Y](http://www.youtube.com/watch?v=QVX2wdDH19Y)

