Give it away

I recently listened to a very interesting NPR TED Radio hour about charity.  Most compelling, was a TED talk by Dan Palotta who argues that we need to fundamentally re-think the way we think about charity.

http://www.youtube.com/watch?v=bfAzi6D5FpM

I thought this bit was particularly thought-provoking:

Interesting that we don’t have a visceral reaction to the notion that people would make a lot of money not helping other people. You know, you want to make 50 million dollars selling violent video games to kids, go for it. We’ll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you’re considered a parasite yourself…

Some people say, “Well, that’s just because those MBA types are greedy.” Not necessarily. They might be smart. It’s cheaper for that person to donate 100,000 dollars every year to the hunger charity, save 50,000 dollars on their taxes, so still be roughly 270,000 dollars a year ahead of the game, now be called a philanthropist because they donated 100,000 dollars to charity, probably sit on the board of the hunger charity, indeed, probably supervise the poor SOB who decided to become the CEO of the hunger charity, and have a lifetime of this kind of power and influence and popular praise still ahead of them.

So, not long after listening to this, I came across this equally provocative post at wonkblog with the non-so-subtle title, “join Wall Street and save the world.”  How’s that, you ask:

Jason Trigg went into finance because he is after money — as much as he can earn.

The 25-year-old certainly had other career options. An MIT computer science graduate, he could be writing software for the next tech giant. Or he might have gone into academia in computing or applied math or even biology. He could literally be working to cure cancer.

Instead, he goes to work each morning for a high-frequency trading firm. It’s a hedge fund on steroids. He writes software that turns a lot of money into even more money. For his labors, he reaps an uptown salary — and over time his earning potential is unbounded. It’s all part of the plan.

Why this compulsion? It’s not for fast cars or fancy houses. Trigg makes money just to give it away. His logic is simple: The more he makes, the more good he can do.

He’s figured out just how to take measure of his contribution. His outlet of choice is theAgainst Malaria Foundation, considered one of the world’s most effective charities. It estimates that a $2,500 donation can save one life. A quantitative analyst at Trigg’s hedge fund can earn well more than $100,000 a year. By giving away half of a high finance salary, Trigg says, he can save many more lives than he could on an academic’s salary.

In another generation, giving something back might have more commonly led to a missionary stint digging wells in Kenya. This generation, perhaps more comfortable with data than labor, is leveraging its wealth for a better end. Instead of digging wells, it’s paying so that more wells are dug.

“A lot of people, they want to make a difference and end up in the Peace Corps and in the developing world without running water,” Trigg says, “and I can donate some of my time in the office and make more of a difference.” …

While some of his peers have shunned Wall Street as the land of the morally bankrupt, Trigg’s moral code steered him there. And he’s not alone. To an emerging class of young professionals in America and Britain, making gobs of money is the surest way to save the world.

Fascinating.  And more power to Jason Trigg.  But I really wonder just how common this among this “emerging class of young professionals.”  I’m guessing that over 90% (if not 99%) of those heading to Wall Street are simply doing so because they want to me rich.  Those who actually make the calculation that Trigg or Pallotta’s hypothetical example do, I suspect, are exceedingly rare.  For those that do– awesome.  Truly.  But let’s not pretend that there’s some substantial portion of Wall Street types who are motivated for these soul-less jobs just so they can give the money away and make a difference.

Finally, I was very intrigued to learn about an organization called Givewell.org that rates charities simply along the lines of how effectively they use evidence-based strategies to give their money away.  They essentially highlight three charities that give an enormous bang for the buck in doing good.  For example, money goes a lot farther by simply spending it in country than flying in Westerners and housing them, feeding them, etc,. to make it all happen.   I was pleased to see that one of my regular charities (out of every paycheck, actually) Doctors Without Borders (or Médecins Sans Frontières, as I like to call it) comes out pretty positively, even if not highly recommended.

Anyway, a lot of thought-provoking ideas about charitable giving.  I’m definitely going to have to consider Givewell’s top charities for the future and re-think my thinking about charity.

And, how could I not conclude with this ode to giving it away:

 

About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

3 Responses to Give it away

  1. Henrietta Jenrette says:

    There is something very disturbing that a few people who are extremely wealthy can use their wealth to play God. They judge causes that “deserve” their help and they judge cultures and areas that “deserve” their bountiful charity.
    And how did they accumulate such wealth? Wealth many times more than the overwhelming majority of the population from which such wealth was harvested will ever see? A large percent of the population struggles daily just for adequate food, housing and medical care and don’t get what they need.
    Some of them produced items and ideas of great value to the economy and the culture. Some of them exploited workers domestic and foreign to gain that big profit margin. Some of them manipulated the making of the tax laws with their wealth or used the tax “creativity” of others to pay as little taxes as possible, often no federal income taxes.
    Some of them play God with charity to justify their wealth, some use it to gain even more power.
    Fundamentally, there is something very wrong, very anti-democracratic about this scene and it does not always work in the national interest.
    How many of our people did the “hero” of the article hurt in his process of making big bucks?

    • pino says:

      They judge causes that “deserve” their help and they judge cultures and areas that “deserve” their bountiful charity.

      How else would you disperse their money? Would you rather have Person A decide how Person B spends Person C’s money?

      And how did they accumulate such wealth?

      The vast majority, the overwhelming majority, did it by trading something that people value. Bill Gates become wealthy because he produced software that, on balance, people want. They want the software more than they want the $199.00. Bill Gates provides value on each and every transaction.

      And the farmer did it by selling milk in the same way. I want milk more than I want my $4.10. And I’m happy to have milk. I find that, in balance, I’m richer with a gallon of milk than if I’d have kept the 4 and change. And so, anyone who has accumulated wealth did it BY MAKING SOMEONE ELSE WEALTHY TOO!

  2. pino says:

    But you want to make half a million dollars trying to cure kids of malaria, and you’re considered a parasite yourself…

    I’ve never understood that thinking.

    People revile folks or companies that make money in healthcare. I think the phrase is, “they profit on the sick and dying”.

    The alternative, of course, is that they don’t make a profit on the sick and dying and then there is no cure, no new technology or new doctor. In my mind, we want the very best and brightest striving to think of all the new and best ways to invent the next cure.

    Now, should society be made of angels, and we certainly are not, we would find that such people would simply do the good work out of kindness. But, humans are rigged liked that, and until such time as we evolve into selfless creatures we need a mechanism.

    The best yet discovered is Individual Liberty. Contained within that is the idea that the individual is sovereign. I cannot compel you to labor on my behalf and you have the right of property. When such mechanisms are in place, you will, of your own free will, labor to find a technology that I’m willing to pay for in order that you become more wealthy than you otherwise would have and I get to live longer than I otherwise would have.

    Perfect!

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