As a church, service is a key tenet of what we believe and practice. After all, pure religion is to “visit the fatherless and widows in their affliction” [1]. Beyond that, Americans are a generous people. We ranked third most generous in the world in 2022, giving just over $499 billion [5]. Giving, whether of time or money, is good, and it generally makes us feel good. Yet I’m sure many of us have felt ambivalence of one sort or another while giving. Recently, I participated in a stake food-packing activity—with three one-hour shifts, they cut off the work about 20 minutes into our shift to save some work for the next shift. Was this type of service really helping anyone?
Having my mind tainted by an education in economics, I constantly ask what effective service and giving looks like. It’s no surprise that I found a special report on philanthropy in the Economist intriguing. It turns out I’m not the only one asking this question; starting in 2020, big donors started thinking more critically about the way they gave [2]. Givers started moving more towards giving unrestricted grants and limiting the intensity of the application process [3]. Specifically, Mackenzie Scott, after her divorce with Jeff Bezos, has embodied this approach nicknamed “no-strings giving”—in a short amount of time, she has given away $16.5 billion [2]. Scott’s team does their due diligence on finding worthy charitable organizations, but then it spends without demanding reports on effectiveness from the recipients [2, 3]. The approach limits bureaucracy and is based on the idea that non-profit organizations know best how to put their money to work, not the detached donor.
The “no-strings” approach stands in stark contrast to traditional philanthrocapitalism. Philanthrocapitalism relies on intense reporting and data to check the efficacy of a non-profit organization. It mirrors principles of the business world. One example of philanthrocapitalism is the Gates Foundation, which demands on rigorous reporting to direct the billions of dollars that it spends [2]. On one hand, this form of giving can bog down charities in excessive bureaucracy. On the other hand, it may be necessary to keep charities accountable. Moreover, the work done by the philanthrocapitalists may enable the due diligence of the no-strings givers.
While the jury is still out on what the most effective approach is, there are some values in philanthropy that are accepted as fact. Overhead spending is essential to an effective non-profit organization. One-off projects are sexy and look good for PR purposes, yet they may not be sustainable. I fell into this trap about four years ago; looking to make an impactful donation to a charity, I was allured by the fact that one charity sent all my donation straight to the cause—other sources funded the overhead. The reality is that overhead spending yields better results [3]. Instead of focusing on how much of my dollar was being put to the cause, I should have investigated how well-run the organization was, which may equate to a hefty amount of overhead spending. Non-profit organizations need facilities, IT support, and a stable staff to be effective. With that in mind, a large, surprise donation from a no-strings giver may be difficult to manage for a small charity. Measured, incremental giving would lead to more sustainable results.
A new freshman, I took Economics 110 and wondered about this problem on a small scale. How could I give without distorting the free market and worsening the problem? I went in to ask my professor for his thoughts. Not giving me a definitive answer on how to be most effective, he told me that my question was a legitimate one. While a tough question, he pointed out that in one sense, it doesn’t really matter. We’ve been asked to give, and the intellectual difficulty of determining how to be effective does not soften that mandate. We shouldn’t use that as an excuse. For the big donors, the excuse of time and effort is no longer valid. Today, consulting wings make it possible to give in an informed manner without expending too much time nor effort [4]. While individuals may not have access to the same resources, we should seek to be effective in the way that we give, and, at the end of the day, we should just give.
