/Why charity doesn’t work
charity doesn;t work

Why charity doesn’t work

Americans donate much more than Germans, more than 800 dollars a year per capita, and about ten times as much as in this country. The money goes to no less than 1.1 million charities, which still receive large amounts from the state. Charitable activities account for about 10% of the total economic performance of the United States.

Ken Stern knows the sector from the inside. From 1999 to 2008 he was Executive Vice President and then CEO of National Public Radio, a kind of public radio but with a different financing model than in Germany. Only a small part of the money comes from the state, the majority of which comes from the foundation’s assets, income from the programs produced and through donations. Not without pride, Stern describes how NPR made the largest donation in its history, 200 million dollars, from the widow of McDonald’s founder Joan Kroc.

Despite the impressive figures, however, there is something wrong with the charity. As an introducme Ken Stern in his book “With Charity for All” the miserable achievements of the aid organizations after the Hurricane Katrina. Only Walmart, with its excellent logistical infrastructure, is really ready for a hit. Aid agencies have invested far too little in their own.

Stern is one of the reasons for this, but also the often made demand that charities should pass through as much money as possible and have little overhead, so longer-term investments as undesirable That’s not the front man.

Another problem is Ken Stern of organizations that drill wells in the Third World. This is a goal that many donors immediately understand and can also be nicely packed into poignant stories. But drilling the well does not help much if there are no resources and staffing for its operation in the long run. But donors have little to do with this, so that aid organizations remain accordingly.

A further shortcoming of the field is the orientation of many donors to their own feelings good to do something, but at the same time interest whether something has really been seen in their sense.

While the successes of for-profit companies are watched and reviewed by hundreds of thousands of analysts, there are fewer than a hundred such analysts for the charity. Many donors, but even more so many organizations they support, do not believe that a review of the results is necessary. The feeling must be enough.

Ken Stern describes, for example, the case of an extensive program in which police officers are sent to schools to educate students about the dangers of drugs. The program reached nationwide dimensions and received massive government grants until its impact was reviewed in a scientific study. T

he result was sobering. Children who were on the program will not be exposed later. On the contrary, it even acted as an information event for drugs and increased drug use, especially in the suburbs. Despite these results, the programme continued.

Lack of control by donors and within organisations quickly leads to a number of further abuses. Ken Stern puts together so many diverse examples of fraud, corruption, and embezzlement. In other cases, the employees steal from the donations, in others the arrangements are designed in such a way that the operators of the charities are the real profiteers, for example through lavish business trips and golf tours.

Since charities are tax-free, over time they become quite normal, tax-only companies. For example, the New York Stock Exchange has long established its foundation as a charitable organization. Ken Stern then goes through charities that are more profitable than their for-profit competitors, who have to pay taxes. Gilded as a pretext, the hospital versant also give services to the poor. In fact, however, only 1.5% of all services and about as much as for-profit hospitals give away.

But the book is not only a scathing critique, but also shows ways to improve the situation. Ken Stern is close to the Democrats, which is reflected in his proposals, even if he doesn’t argue otherwise as a partisan. So he wants better oversight of the charities. In fact, there is almost no such thing. A charity can be founded by filling out a few forms. Whether it really pursues the goals set is usually never checked again. Sporadic controls detect fraudulent activities at most by chance.

It seems more interesting to see the proposals to get the charitable sector on the demand side, namely when donors insist that results are actually achieved. Here, Ken Stern presents some pleasing examples of how well-managed charities can provide transparency on their own and are also willing to break out of retracted paths if they have proved to be wrong.

Since the individual donor, even the large donor, is not able to view and evaluate the many organizations, professional service providers are also needed to take on these tasks. For example, GiveWell’s approach is presented and rightly praised.

A further question that Ken Stern does not concern is why a distinction is made between non-profit and profit-oriented companies in the first place, and why the former are given preferential treatment by the state. There is probably a presumption that profit is excluded from charity. But why should it not be acceptable for a company to profit precisely from the fact that it transfers the donors’ funds into verifiable results in a particularly efficient way? And why should another company be favoured for doing worse because it is unprofessional or does not care about the impact of its work, but has renounced profit?

Instead of favouring certain companies here, they should be treated equally and, if tax relief is involved, they should be incurred on the donor side.

The large number of donors, as Ken Stern explains, still lack control and often creates nonsensical criteria, but it would be able to do much more than a few more supervising officials. Transparent competition from suppliers would also be beneficial, and if they were to focus on profits, they would also be in the informal sights of the many analysts.

Ken Stern’s book is excitingly written. The author’s political attitude remains in the background. Both Republican and Democratic horses are being slaughtered in a very balanced way. In part, Ken Stern’s inside view of NPR is interesting, but depending on the impression, he wants to highlight his own performance here and settle with the conditions at NPR. But this is rather a small criticism on the sidelines.

Overall, the book shows that Americans not only like to donate a lot, but will probably also donate better in the long run. There is no similar discussion in Germany yet. It is no coincidence that relevant keywords such as “Effective Giving” or “High impact philanthropy” are searched in vain in the German Wikipedia.