When a woman and her three children came to my register at Staples with six carts’ worth of school supplies, I could not believe how unlucky I was to be the cashier for such a large purchase. My face must have given me away because the woman met my bemused expression with an explanation: “This is for charity.”
She further explained that she was working with the United Jewish Appeal, a philanthropic organization, to prepare backpacks filled with school supplies for students in need. As she said to me, “It’s sad that some families have to choose between food and school supplies.”
She paid entirely out of her own pocket. UJA did not give her money to pay for the school supplies – she used a few gift cards and her own credit card to pay the bill, which ultimately totaled close to $1000.
Her action of philanthropy was purely voluntary. She made the decision to join UJA. She made the decision to take part in their service. She made the decision to pay with her own money.
Why aren’t there more people like that woman, proactively joining philanthropic organizations and donating to those less fortunate out of their own pockets instead of pushing for ineffective governmental programs? Unfortunately, our government does not leave it up to us to decide how we should help out those less fortunate. For example, the government taxes us to fund its inefficient welfare programs. We have no say in what they do, to whom they give, and how much we give to them. By virtue of our living in the United States, we are obligated to let the government wrest the money we have made and give it to others.
On the other hand, private charity is entirely our choice. We can decide to join an organization of our own accord. We can use our own money to fund projects that we personally deem important. We can look into the charities to which we want to donate in order to ensure that we will get the most bang for our buck. If we do not like how a particular charity uses its money, we do not have to donate to that charity. The laws of economic competition ensure that private charities, who have to compete against each other for donations, would strive to be the best at effectively using their money.
To encourage people to become involved in private charities, the right incentives would need to be put into place. First of all, a reduction in taxes would leave everyone with more money in their pockets. People who are well-off to begin with will have more money for discretionary spending, which includes the money they choose to give to charity.
The decline in tax revenues would lead to a reduction in welfare spending. The poor would not be left on their own: They would have an economic incentive to work, they would have more money in their own pockets, and the people with more money for discretionary spending would, with the right incentives, use that money voluntarily to help out their fellow Americans.
Of course, it would be necessary to place an emphasis on joining philanthropic organizations. Once some people get involved in charities, they will tell their friends about the work they do, and those friends will be incited to get involved as well. In the end, if many people take up charitable causes, then the welfare system will essentially have been privatized.
In “Libertarianism: A Primer,” David Boaz, executive vice president of the Cato Institute, sums up the power of private charities: “Suppose you won $100,000 in a lottery. But there’s a catch. You have to spend it to help the poor. Would you give it to the U.S. Department of Health and Human Services, your state human services agency, or a private charity? Most people would not hesitate to choose a private charity.”
As Boaz and the woman at Staples understands, private charities would use money more efficiently than bloated, monopolistic, and bureaucratic government.