The Resurrection of American Philanthropy

Among the many government shutdown stories that came over the wire in recent weeks was one about billionaire Houston philanthropists Laura and John Arnold, whose foundation gave $10 million to the National Head Start Association to keep the program for low-income children running after the shutdown forced it to close in six states.

Media coverage of the donation was mostly positive; the Arnolds’ generosity was cast in stark contrast to Washington gridlock. In a statement, John Arnold chastised political leaders for their intransigence while downplaying the role and scope of philanthropy: “We sincerely hope that our government gets back to work in short order, as private dollars cannot in the long term replace government commitments.”

But The Nation ’s Amy Schiller went further, lamenting the Arnolds’ involvement for undermining “a larger community that requires a major central government to properly care for all its citizens.” The entire shutdown, she wrote, “is undergirded by a fantasy of a world in which the government’s power is vastly reduced and private citizens step into the breach with better, more innovative ideas for solving social challenges.”

Whatever the intentions, progressives see the Arnolds’ entire approach to philanthropy as making things worse in the long run. Private philanthropy, in this view, is a threat not just to long-established government programs but to democracy itself. Charity is all well and good as long as it’s restricted to symphonies and other “ornamental causes,” but foundations that have greater public policy ambitions represent the “voice of plutocracy.”

But are large philanthropic foundations worse than the massive government welfare bureaucracy we have today? Given the size and ubiquity of our public welfare programs today, the question is speculative. Government has imposed a veritable monopoly on almost all forms of social welfare, so there’s no way to know whether private groups would step forward if government stepped back, or what the results would be.

Not that the publicly-funded safety net would need to vanish altogether, but private groups could take on certain tasks the government has seen fit to weave into the safety net over the years, such as food assistance and job training. Since private groups have nowhere near the government’s ability to raise funds through the taxing power, their efforts would have to get much more out of every dollar—and be able to show tangible results.

It would not be hard to beat the government’s record to date. The Great Society programs of the 1960s have grown beyond what their creators ever imagined—and have accomplished far less than they’d hoped. Federal disability rolls have doubled since 1995 , reaching a record high of 8.8 million in March with total benefit payments at about $260 billion a year. The federal government spent a record $80.4 billion on food stamp benefits last year, with enrollment at a record high despite the economic recovery and a drop in unemployment. Ironically, the growth of such programs has resulted in an appalling lack of upward mobility among those they were meant to help. The regions of the country that relied most on government benefits in 1969 are even more dependent on those benefits today. Nearly a half-century after its inauguration, the legacy of the Great Society is the permanent establishment of a public welfare system that entrenches dependence, impedes upward economic mobility, and discourages the formation of families by incentivizing single parenthood.

Inefficiency and incompetence explain much of the failure of the Great Society, but there is another, more important, reason that government is incapable of accomplishing its task. Publically-funded welfare robs individual citizens of their responsibility to care for the poor and personally invest in the betterment of society on the local level. Worse, it prevents the poor from receiving all the immaterial benefits of human compassion, reducing them to the status of a client in a centralized bureaucracy. This is something Pope John Paul II recognized when he said,

Certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need. One thinks of the condition of refugees, immigrants, the elderly, the sick, and all those in circumstances which call for assistance, such as drug abusers: all these people can be helped effectively only by those who offer them genuine fraternal support, in addition to the necessary care.

Conversely, welfare enforced through the police power and administered as an entitlement, rather than a freely chosen act of compassion, corrupts the character of both the taxpayer and the welfare beneficiary. As a moral matter, the left tends to characterize public welfare as an act of compassion and solidarity, when it is in fact an act of violence against the character and conscience of all those involved: the taxpayer who resents being forced to pay for what should be freely given, and the poor man who resents his loss of dignity and agency. But the harm is not merely metaphysical. Cut off from sources of genuine compassion and community, the poor do not get the kind of help that brings about lasting change in their lives and tangible renewal to their families and neighborhoods. Instead of a temporary boost to get people on their feet, welfare in America has engendered misery, sapped ambition, and created a way of life that is passed on from one generation to the next.

Into this morass now come the increasing efforts of private philanthropic foundations that believe there must be a better way. They are right to think so, based in part on the experience of welfare reformers a century ago. As Marvin Olasky documented in his masterful 1992 book, The Tragedy of American Compassion , a philanthropic movement arose in the late nineteenth-century that pushed back against both popular Social Darwinist theories and a growing school of thought that advocated for publicly-funded “outdoor relief”—direct, indiscriminate aide to anyone who asked for it. Two reformers, Josephine Lowell of New York and S. Humphrey Gurteen, a minster from Buffalo, rejected both approaches, claiming instead that charity is a social and religious duty that must be tempered by discernment. If not, wrote Gurteen, “the poor will learn to be dependent, till at last, though by degrees, every vestige of manliness and ambition will have been destroyed, and they will come back as skilled beggars, to torment and curse the very people whose so-called charity has made them what they are.”

Gurteen and Lowell established what they called Charity Organization Societies in Buffalo and New York to test whether private welfare could succeed if it aligned incentives and required beneficiaries to work. Gurteen set up a wood yard next to his shelter and required able-bodied applicants to pass a “work test” as a condition of admittance. Lowell did the same, and also investigated applicants by sending a volunteer to their home—not only to guard against fraud but also to better ascertain how best to meet individual needs. Outdoor relief and public welfare, wrote Lowell, “has the tendency to become regular and permanent . . . [it] cannot be defended; it has none of the redeeming features of private charity, because there is nothing personal and soft in it.”

Back then, unlike today, almost all social welfare work was done by a network of local, private groups. The organizations Lowell and Gurteen founded were studied and replicated nationwide, with notable success. Despite the government takeover of welfare in the mid-twentieth century, there are still some contemporary equivalents to these earlier, private efforts. Haven for Hope in downtown San Antonio, Texas, is a sprawling, $125 million campus funded by a mix of private and public dollars that has served the homeless since 2010 and has since become a national model, visited by some two hundred cities from forty-four states. The keys to its success have been a determination to treat the root causes of homelessness and a willingness to set down rules and turn away those who won’t comply with them. Among Haven for Hope’s seven guiding principles are things like, reward positive behavior, impose consequences for negative behavior, prohibit panhandling. Most important, however, is the first principle: “Move to a Culture of Transformation (versus the Old Culture of Warehousing).”

What’s true in the case of this one program in Texas is true for social welfare writ large. Nothing less than a profound cultural shift in our conception of how best to care for those in need will suffice to reform our government welfare system so that private philanthropy can reclaim a role in American society it has shunned for too long.

John Daniel Davidson is a health care policy analyst at the Texas Public Policy Foundation and a 2013 Lincoln Fellow of the Claremont Institute.

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