220.127.116.11 Private Charity as an Alternative to the State
Individualists argue for private charity, as an alternative to the State using taxpayer funds, on the grounds that it is voluntary.
They argue that individuals should be responsible for themselves where possible, with private charity stepping in where necessary. This belief, which is widely held in America for example, can be supported by several arguments:
● Civil society is likely to be more responsive to people’s needs than a comprehensive service provided by the State (18.104.22.168).
● Benefit payments might lead to idleness and dependency.
● Public provision ‘lets people off the hook’. It can be argued that people who choose not to pay for health insurance don’t deserve to be helped.
● Mutual dependence strengthens families but reliance on the State weakens them.
● Private charity is voluntary, and can be given as an act of caritas (a form of love), whereas taxation can be regarded as a coercive infringement of personal liberty – as Milton Friedman pointed out in an interview entitled Living Within Our Means. People don’t feel as good about helping others if they are doing so through compulsory taxation, rather than as a voluntary act of goodwill.
Although these are strong arguments for limiting the State’s role, there are serious limitations to having a system that depends solely upon private charity as an alternative to the State:
● People would not be able to rely upon having their needs met by charity, so they would always feel insecure.
● Private giving can lead to absurd disparities. For example, a Guardian article, Britons give more to donkey sanctuary than abuse charities, gave these figures:
“more than 7 million women have been affected by domestic violence but … Refuge, the Women’s Aid Federation and Eaves Housing for Women have a combined annual income of just £17m. By contrast the Donkey Sanctuary, which has looked after 12,000 donkeys, received £20m in 2006.”
● Charities compete for donors, so some spend much of their revenue on marketing; and some have high administration costs. A Telegraph article, How much charities spend on ‘charitable activities’, reported that, for some prominent British charities, the proportion of their revenue that was actually spent on charitable activities varied from 42% to 96%.
● Private charities are fundamentally different from private companies which provide services that people pay for. Competition keeps commercial organisations efficient and customer-focused (3.2), but charities need donors more than they need recipients. Charities might also look after their own employees better than they care for beneficiaries.
Americans, in contrast to Europeans, place a higher priority on individual philanthropy than on State provision. Anne Nelson’s book review, philanthropy is making America more unequal, describes how “dramatic changes in financial instruments and tax policy have promoted the plunder of the US public coffers – and the social safety net they support – in the name of private charity”. She suggests that wealthy people prefer a system of private charity for economic, rather than moral, reasons: it results in them paying less tax.
America has also seen the growth of ‘mutual aid groups’ as an alternative to private charity, to supplement inadequate State support. As community-based self-help initiatives, they avoid being seen as paternalistic charity and so are more in tune with individualist values.
There are clear benefits in the wider choice and spontaneous giving which are associated with private giving – but to supplement, rather than completely replace, the universal coverage that can be provided by the State.
This page is intended to form part of Edition 4 of the Patterns of Power series of books. An archived copy of it is held at https://www.patternsofpower.org/edition04/4246a.htm