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).


  • Lisa Robinson

    Joe, thank you for this. I’ve worked in the non-profit sector for the past two decades on behalf of homeless, housing and multi-service providers. I have really desired to see less reliance on federal funds but the reality is that charitable giving through the private sector is insufficient. It’s not as simple as just removing subsidies, especially considering how much that would exacerbate the problem. I long to see some innovative solutions implemented that gives private industries incentives for training and employing disenfranchised citizens who have experienced long term barriers to economic self-sufficiency. More money is not the solution, but better partnerships, I think.

  • rtenneson

    In such a nuanced and complex situation as government aid is, it is essential to approach to situation from principle, and there are in our government’s structure deeper principles than alleviating human suffering whenever it arises. See President Grover Cleveland’s statement when he vetoed a bill to help American farmers suffering in Texas:

    Though there has been some difference in statements concerning the extent of the people’s needs in the localities thus affected, there seems to be no doubt that there has existed a condition calling for relief; and I am willing to believe that, notwithstanding the aid already furnished, a donation of seed grain to the farmers located in this region, to enable them to put in new crops, would serve to avert a continuance or return of an unfortunate blight.

    And yet I feel obliged to withhold my approval of the plan as proposed by this bill, to indulge a benevolent and charitable sentiment through the appropriation of public funds for that purpose.

    I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that, though the people support the government, the government should not support the people.

    The friendliness and charity of our countrymen can always be relied upon to relieve their fellow citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood.

    • /dan

      actually this support of “friendliness of countrymen” has never been demonstrated IN HISTORY, EVER. it’s perhaps the way it should be, and the ideal but it doesn’t happen. The government should in a limited means support the people who need it, it strengthens society and yes strengthen the economy

  • The fallacy is in 1) comparing the situation as it exists today with what would happen without state aid and 2) letting the most envious people in the world set the level of redistribution.

    The state takes about 45% of all income. Charitable giving declines as the state grows. Shrink the state and leave people with more money and they will give more.

    Most charitable giving goes to education, largely because people think the state has a monopoly on caring for the poor. Get the state out of that role and people will give more to the poor. Before FDR, people gave a lot to the poor and and it appears to have been sufficient.

    The best way to help the poor is through greater investment in businesses to create more jobs. Taxing working people reduces such investment and makes people poorer.

    Who knows how much giving to the poor is enough? Brooks wrote, “private donations cannot guarantee anywhere near the level of assistance that vast majorities of Americans across the political spectrum believe is our moral duty.”

    But that moral duty has been heavily influenced by a century a socialist propaganda that raises envy to the level of a virtue. Most Americans would tax the rich even more and give more to the poor out of pure envy while calling it justice.

    BTW, true morality requires that giving to the poor be be voluntary. Coerced giving has no moral value whatsoever.

    At the same time, state “charity” increases the number of people living on aid and creates generations of dependency similar to slavery. Most state aid is wasted either by the bureaucracy or by people who could be working but prefer to live off the work of others.

    • dan

      “Before FDR, people gave a lot to the poor and it seems to be sufficient” Um firstly no they didn’t, there’s no evidence you will find to back up that ridiculous assertion. Government welfare has a much bigger benefit than the tax you take. “Most envious people in the world” What a ridiculously insulting and ill-informed opinion. If you got out in the real world you’d see that most aren’t envious they just want to survive. That is seriously such a ridiculous statement. You must have always had life very good for yourself. I mean wow. State charity on the most part (>90%) does not create dependency or generations of dependency, and “similar to slavery”, I mean once again wow! where do people like you come from?

  • MisterReason

    This is my view as well. Social concerns should be something embraced in the heart of all people. Here’s the thing. You can’t calculate it based on charitable donations to organizations. People already look out for each other and contribute. I think there is a lot of work to go, but it boils down to this.

    If it’s forced, is it charity? If it’s mandatory kindness, is it kind?

    In the short run, it could be rough, but we need to create a society that honors the individual first. Increase prosperity on a large scale by removing monopoly and state-advantage, and cultivate a culture of giving.