Charity and Welfare

Daniel Silliman ponders  on his blog whether charity could entirely replace the welfare state, as some conservatives desire:

Could private charities move beyond assistance, beyond helping at the points where the system of government assistance is breaking down, replacing government with benevolent associations as religious conservatives say would be preferable. If given the chance, could and would people of good will take care of the poor voluntarily, giving enough money to private organizations to functionally replace the social safety nets now in place?

He cites his experience as a reporter in Georgia, taking that state as a test case for whether charities could take over the work of government programs for the poor. Later he examines the claim that lower tax rates will lead to more private-sector giving:

The president of [the Acton Institute] has  argued  that “Private charity tends to be inversely related to growth of government welfare” and that when “budget cuts go into effect, people will reach deeper into their pockets to help those genuinely in need.”

That doesn’t seem to be true, though. Giving doesn’t correspond to tax rates, but to economic growth. When recessions hit, giving declines, and when the economy improves,  giving does too . In recent history, giving increased a good bit during the late ’90s, corresponding pretty directly to the boom years of the dot-com bubble. The Bush tax cuts, by comparison, which went into effect in 2001 . . . saw no corresponding increase in giving . . . . Generally speaking, charity doesn’t increase when there’s increased need, in the way that government spending might, but rather seems to be another kind of luxury spending that people, in aggregate, spend when they have.

To state the obvious: If conservatives want the argument that charity can replace government programs to look plausible, we’ll need to start putting our money where our mouths are. You can read Silliman’s entire post here .