By Josh Kattenberg
Having just come through the holidays and running the gauntlet of bell ringers at the entrances of retail stores, mail filled with requests for end of year charitable donations, and radio and TV ads asking for Christmas presents for poor children, some of us might have charity fatigue. With so many great charities and seemingly endless needs, do you ever wonder how and where to give? Do you find yourself tossing a few coins in the red bucket just to relieve your sense of guilt? Can giving ever be a bad thing?
I just read a short book called, “When Helping Hurts: How to Alleviate Poverty Without Hurting the Pool and Yourself” by Steve Corbett. Corbett explains that often our attempt at helping the poor can actually hurt them by developing dependency upon the charity.
One way the wealthy can hurt the poor is by unknowingly ruining their economy. For example, suppose a poor business owner in Africa is supporting their family by buying used coats and selling them in their community. A well-meaning person from North America, hearing about the need for used coats puts together a campaign to collect donated used coats and then ships them to the African community. Everyone in the community is happy because they received a free coat. However, the large supply of free coats has destroyed the local coat market and drives the small business owner out of business. The loss of the business owner’s job is tragic, but the larger problem is that when someone in the community needs another coat, they will be unable to buy one because the coat vender no longer exists. In addition, dependency upon the North American donor has been created.
I remember one of my archeology professors talking about paying his workers on his excavation in Egypt. He would pay them only slightly more than the going rate which amounted to a fraction of our minimum wage. He said that if he would pay the workers something equivalent to our minimum wage, all the workers would quit their normal jobs to come work at the excavation. Because the excavation only operated a few months out of the year, the workers would not have work for the rest of the year, having quit their regular jobs. Overpaying these workers could effectively ruin their economy and cause them to starve.
Well-meaning donors can create a feeling of shame and a loss of dignity by their unthoughtful giving. Cobett gives the example of a suburban group buying and delivering Christmas gifts, Easter goodies, and Thanksgiving baskets to an inner city ghetto. While the inner city kids were excited to receive the free gifts, the suburban group realized that they were causing great shame to the fathers of these inner city families. The fathers felt emasculated because they could not provide gifts and food for their own families.
Of course, this is not to say that the wealthy should shun the plight of the poor. We need a thoughtful approach to make sure our giving truly blesses the poor without hurting them.