Charity

By Michael Kinsley

William Aramony, president of United Way of America, was getting $463,000 a year in pay and benefits. He flew on the Concorde and spent $20,000 one year on limousines. A spin-off organization bought an apartment for Aramony's use and hired his son. Exposure of these abuses led to Aramony's sudden retirement. The head of the New York-area United Way division (pay: $341,000) also recently retired -- on a lump-sum pension of $3.3 million.

Philanthropoids worry that the scandals at America's biggest charity will make Americans less generous. It would be nice if, instead, this episode led Americans to reconsider the virtues of another way to channel the generosity of the comfortable majority to those in need: Big Government.

Two Republican Presidents have emphasized private charity as a substitute for the heavy hand of government in addressing social needs. Reagan had his Private Sector Initiatives program. Bush has his "thousand points of light" -- a throwaway bit of imagery that has spawned a vast public relations exercise.

Bush chairs the Points of Light Foundation, which spurs private and corporate giving. Something else called the White House Office of National Service has put out (at taxpayer expense) a ridiculous book called Selected Presidential Statements on the Points of Light Initiative, in which 343 Bush bromides are indexed by "theme" and "issue." "Service=Success: Quotes 3, 11, 12, 19 . . . Meaning and Adventure: Quotes 33, 147, 153, 224 . . . The Young People of America Can Save Us: Quotes 8, 39 . . . The Talent and Experience of Older Citizens: Quotes 31, 114, 115 . . . Service Makes a Difference: Quotes 83, 89, 95 . . ." And so on.

Charity is wonderful, and Americans are wonderfully generous ($122 billion in 1990). But in the hands of politicians, charity can become an excuse for ignoring social problems, not a method of addressing them. A Points of Light Foundation brochure puts the challenge well: "While many Americans prosper, another part of our country dwells on the other side of hope. Illiteracy, drug abuse, teen pregnancy, delinquency, homelessness, neglect, alienation . . ."

So, O.K., take homelessness. Should a prosperous society have people living in the streets? To the extent that money can prevent this, does our society have an obligation to find and spend the money? An ugly but honest response would be to say no; it's good when individual people take pity on other people, but society as a whole has no such obligation. It is not an honest response to say society does have an obligation but it should be handled privately. Adam Smith's theory of the invisible hand explains how private greed gets channeled to socially productive ends. But no one suggests that private for-profit business can solve the homelessness problem. And there is no theory of an invisible hand to guarantee that private charity will be sufficient.

Generosity via the government does require people to contribute whether they wish to or not. "If you're so concerned about Problem X," liberals are often taunted, "there is nothing to stop you from writing a check." A single check, though, won't solve the problem. Many people who don't give a quarter to a homeless person because it seems futile would happily give a lot more than that to live again (as we did barely a decade ago) in a society where the sight of a blanket-wrapped beggar is shocking. In a democracy, "government coercion" is a crude misrepresentation of the process by which citizens make a collective decision to achieve together what they cannot achieve individually.

In a sense, a charity like United Way has thrived by reinventing the wheel. Most of its money comes from payroll deductions, just as taxes do. It does not have the compulsion of the law behind it, but it does have heavy pressure from employers. And it appeals to the sentiment that together we can do what we cannot do separately.

The burgeoning field of corporate charity puts the notion of government "compulsion" vs. private "voluntarism" in even sharper perspective. The actual donors are the shareholders, whose money is volunteered by the corporation's executives. The shareholders can vote the executives out if they're being overgenerous -- just as the citizens can vote the politicians out. Shareholders can also sell their stock, which citizens cannot. But in practical terms, corporate charity is under less democratic control than government social welfare. And corporations, unlike the government, then spend vast sums of money bragging in advertisements about how generous they are. Stockholders pay for that -- and so do taxpayers, since the cost is deductible.

The typical well-run charity spends 25 cents of each dollar on fund raising and administration, 75 cents for good works. These are not unreasonable amounts, but they compare unfavorably to the cost of raising money through taxes and delivering social services through the government. Although Aramony's excesses were unusual in the world of charities, they make the congressional check-kiting scandal look like small beer. And even normal compensation for top charity executives exceeds the pay of top government administrators. If you're looking for a charity bargain, think Uncle Sam.

It's a fine thing that our elected leaders have decided to use the bully pulpit to encourage private charity. As a taxpayer, I don't even mind seeing a few of my dollars going to pay for the propaganda. The trouble is that these $ same elected leaders have used the same bully pulpit to poison the minds of citizens against the mechanism of selflessness and social generosity that is at these leaders' actual disposal: the government. A free society deciding to tax itself to make itself a better society -- that's the real united way.