Acton Institute Powerblog

Can Private Charity Replace the Social Safety Net?

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Fish-safety-netWhen Americans are asked what percentage of the federal budget is spent on foreign aid, the average answer is 28 percent. The real answer is around 1 percent.

Before we start mocking the estimation skills of our fellow citizens, I have a similar question for my fellow conservatives: What percent of federal budget goes to programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship?

Would you say 40 percent? 30 percent? 20 percent?

The actual answer is 12 percent, or $398 billion.

Could the amount of money donated to private charities cover the substitution cost for the social safety net? The short answer is: it’s not even close. As AEI president Arthur Brooks explains,

It would be wonderful if America could solve all problems of poverty and need through private charity. We can and should give even more, and conservatives must continue to lead by example. But even in this remarkably charitable country—where voluntary giving alone exceeds the total GDP of nations such as Israel and Chile—private donations cannot guarantee anywhere near the level of assistance that vast majorities of Americans across the political spectrum believe is our moral duty.

Consider the present total that Americans give annually to human-service organizations that assist the vulnerable. It comes to about $40 billion, according to Giving USA. Now suppose that we could spread that sum across the 48 million Americans receiving food assistance, with zero overhead and complete effectiveness. It would come to just $847 per person per year.

Or take the incredible donation levels that followed Hurricane Katrina in 2011. The outpouring of contributions exceeded $3 billion, a record-setting figure that topped even the response to the attacks of September 11, 2001. But even this historic episode raised enough to offset only 3 percent of the costs the storm imposed on the devastated areas of Louisiana and Mississippi. Voluntary charity simply cannot get the job done on its own.

Americans donate to private charity less than 10 percent of the amount provided by the government’s social safety net. But let’s assume that state-based welfare is rife with fraud and abuse and that after reforms we could cut the amount spent in half. Even then private charity would only cover 20 percent of the original amount needed.

There are a lot of conservatives (including me) who think our neighbors in need would be better of if most or all of the safety net was funded by charity. But the sobering reality is that we have a long, long way to go before that is even in the realm of possibility. If we are going to convince our fellow Americans that government should get out of the welfare business, we need to figure out a way to close the charity gap and show the private sector truly can take care of the poor and needy.

(Via: AEI Ideas)

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).