2011-12-11

Comparative Advantage and Charity

What is "action," anyway?

I know a man who never, ever gives money to the homeless. He doesn't give money to people on the street, and he doesn't financially contribute to homeless shelters or anti-poverty organizations. Despite all this, he considers homelessness and poverty to be terrible local problems that need to be addressed.

How can these two positions co-exist? How can a man both refuse financial contributions to the homeless and insist that homeless and poverty need our desperate attention and action?

Pretty simply, actually. This man I know spends a lot of his time teaching at-risk youth how to manage money. He sees this as his contribution to the problem.

From time to time, others do ask him why he doesn't give money to homeless people and support organizations. They seem to insinuate that this man is heartless or that he isn't giving enough unless he contributes financially. That this man has many success stories about how he was able to deeply impact the lives of specific youth does not seem to dent his critics. They believe he should pay up.

He believes that he has a unique skill set that makes him particularly well-suited to teaching at-risk youth good financial practices that will enable them to save for their educations, manage their expenses, and pull themselves out of poverty.

I suggest that both approaches are useful and appropriate. There is certainly no "one right way" to fix a social ill. If there were, we would have identified it long ago, and the problem would have been eradicated. Remember, human beings have been around for more than 10,000 years. That's a long time to think through problems and propose solutions. For 10,000 there has been human need. We haven't solved these problems; the best we can do is try according to our unique skill-sets.

The Money Myth
If there is one thing we should have learned by now, though, it's that problems with social causes cannot be solved by simply throwing money at the problem. The reason people are poor or at-risk or etc. is not because there is a lack of funding for anti-poor, anti-at-risk, or anti-etc. activities.

Instead, these problems are complex, come from a variety of causes, and require many different methods of addressing them. We cannot simply spend money or buttress existing organizations if we hope to solve them.

In fact, it might be safe to say that social ills like "poverty" can probably never be solved. There will always be people among us who require special effort and attention. There are as many of these situations as there are potential solutions.

Helping Out
Therefore, I think it's important to keep one's skill-set in mind when wishes to address tough problems.  Some of us are fabulously wealthy and can easily provide money to well-run organizations designed to deal with these problems.

Others (most of us) don't have a lot of money, but might be able to contribute time. And of those of us who choose to contribute time, we have to pick our battles. We cannot possibly give enough time to every conceivable social ill that we wish to address. We choose the most important issues to us, and focus our efforts there.

Out of those of us who contribute time, some of us have the kinds of personalities and backgrounds that enable us to function well as counselors, peers, mentors, etc. Like the man I know who teaches at-risk youth. But what about those of us who are, because of our natures, particularly ill-suited to serve as mentors? Are we just bad people?

No, I don't think so. I think some people can't stand the sight of tears just like some people can't stand the sight of blood. It takes a certain quality to act as peer support, and not all of us have it. Those of us who don't will probably do more harm acting as counselors than if we stayed out of the way.

On the other hand, it doesn't mean we don't have useful skills. Some of us are great at writing, or managing, or providing technical support. Some of us are great at strategizing or fund-raising. The list goes on.

Capitalism and Charity
So that great feature of the market economy - comparative advantage and specialization of trade - is also a boon to the world of not-for-profit activities. Not everyone can donate blood or write huge checks for charities. Not everyone has enough hours in the day to spend serving up hot meals at the shelter.

So we all contribute in our own way, and so long as there is positive impact, we've done a good deed.

Or so it seems to me.