How does government welfare compare to private charities? It is not a competition.
It’s that time of year again, when Americans are consuming more than ever, but also when Americans are giving more than ever. Indeed, America’s generosity as a whole is actually quite extensive, with Americans giving $ 471 billion in 2020, a historic record. This is more than the vast majority of countries report in tax revenue. 80% of this comes from individuals, according to Giving USA.
Americans, in general, are incredibly generous, with 25% of Americans volunteering each year. Converted to dollar value, that’s roughly $ 179 billion work value. The bulk of this charity comes from the wealthy, with 93% of households making more than $ 162,501 donating to charity and 91% of households earning more than $ 125,001 in charitable donations. .
Since the government launched the “war on poverty” 56 years ago, it has spent $ 27 trillion on this effort. And yet, it was not until the early 1970s that poverty rates fell. Why? Well, a likely explanation is that welfare has taught people not to work, because reliance on government welfare statistics showed. In fact, 93% of social assistance recipients depend on social assistance for more than 2 years. Charity, on the other hand, is not guaranteed, so it encourages people to take responsibility and become self-reliant.
Another problem with the welfare of government is bureaucracy. For example, studies have shown that 70% of the money spent on budgeting government aid is spent to support bureaucracies, with only 30% actually going to the poor.
Private charities, on the other hand, donate more than 70% of their income to the poor. There are a ton of really good examples of this, like Feed America, which can turn $ 1 into 12 pounds of food for the poor, or ten big meals.
In fact, raising half of the money from voluntary private charity instead of forced taxation is believed to produce the same impact than the government, if not more.
Americans are a generous people, and we will step up and provide for the poor, especially if taxes are lowered through reasonable cuts to welfare. Studies found that “decreasing public funding increases the number of donors,” which makes sense because less public spending means people have more money to spend on their own.
A huge welfare state isn’t a practical solution for America, and its one-size-fits-all approach just doesn’t work. The effects of the interventionist welfare state have been disastrous for taxpayers, communities, freedom and the poor.
One of the reasons for the lower public welfare results is that government regulations are written in such a way that all beneficiaries in a similar situation are treated equally.
Most government programs, for example, distribute money or other goods and services to all recipients without making any effort to distinguish them. The sheer scale of government programs hinders individualization. For example, an illiterate homeless person cannot fill out a long government form, and some mothers do not know who the baby’s father is, so they cannot put his name on the required form.
On the other hand, charities offer personalized solutions for everyone instead of a one-size-fits-all solution, as charities are inventive, individualized and flexible. Charities will not only be more profitable, but they will also provide the poor with more effective and humane care. Charities also foster a different attitude with donor and recipient because recipients learn that private philanthropy is a gift with reciprocal duties, not a right. At the same time, donors understand that private philanthropy forces them to get personally involved. Spending someone else’s money, even for a noble cause, lacks compassion. True compassion requires active participation on the part of the individual.
Academic data collected by Roundtable on philanthropy found that, from 71 different studies comparing the effectiveness of public agencies and private institutions, they found that there are government programs that work better, and there are private charities that work better. In 56 out of 71 cases, private charity performed better. There was no clear difference in 10 out of 71 cases, and in 5 out of 71 cases, public agencies performed better.
All this to say that private charity constitutes a solid alternative to public welfare, a much more ethical and much more effective alternative.