On giving to charity

Steven Landsburg, the “armchair economist”, wrote a piece on the internet about how everybody should give all their charitable contributions to one charity. Read it, and then read my reply:

Steven —

You’re right, your theory on giving to charities is certainly thought-provoking. But I think it’s also disingenuous, and not just for the obvious reason that charitable giving is patently not a purely selfless act. (Charitable contributions would be much lower if it were.)

I think the big flaw in your argument is the presumption that charitable giving is zero-sum: that, in your mathematical terminology, delta x + delta y + delta z must be constant. I have absolutely no idea where you get this premise from; it certainly doesn’t correspond to anybody I know. “starving children and cancer research are surely conflicting values,” you write, “because every dollar you give to one is a dollar you didn’t give to the other.”

This is simply false. Every dollar I spend on rent, every dollar I put into my retirement plan, every dollar I spend on a cup of coffee in the morning is a dollar I didn’t give to starving children, but that doesn’t make starving children and morning coffee conflicting values.

I, and others, are great fans of public radio, and do give money to our local NPR stations. But I would be surprised if one in a thousand of us thought that NPR was the most deserving place for our money. (Think of those starving children again.) And no matter how much money we give to starving children, even in aggregate, we NPR donors are never going to ameliorate the situation of starving children so much that NPR will become more deserving than the kids. So if we all took your advice, none of us would ever give any money to NPR. And we don’t want that, because it would mean NPR going off the air.

Well, I can see you say, in that case your giving to NPR is not truly a charitable gift — you’re doing it in your own self-interest, because you want to be able to continue to listen to Morning Edition. What I say to that is that yes, my gift to NPR is self-serving, but that doesn’t mean it’s not charitable.

Charitable giving is a complex thing, and I really don’t think it can be reduced to mathematical formulae, at least not formulae as simple as the ones you put forward. The fact is that most people find it easier to give $50 to three charities than to give $150 to one. That might be economically irrational, but it’s true.

Let me give you one last thought experiment. Let’s say for the sake of argument that you’re right, and that charitable giving is zero-sum. Let’s say I’m going to give $1000 to charity this year. And let’s say I’ve decided that the best place for that money to go is cancer research. Now because of time value of money considerations, I should really give all the money to cancer research at the beginning of the year, so I do.

And then there’s a huge earthquake in Honduras, and it’s dreadful, and people are starving and suffering there to such a degree that it becomes obvious to me that their plight puts them higher up the scale than the cancer research charity. What now? Either you’re right, charitable giving is zero-sum, and I give them nothing. This is obviously a bad outcome both for them and for me, as I’m unhappy that the most deserving people didn’t get my $1000. Or else you’re wrong, and charitable giving is not zero-sum, and I find $500 somewhere and send them off. I do hope that you’re wrong.