"It's amazing how much 'mature wisdom' resembles being too tired." --Robert Heinlein

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Insights from Lost & Found

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This is Magger Frane's 'blog.



I wrote this on January 7, 2005

The last time I saw a news story on television about how aid organizations are helping the survivors of natural disasters in less developed countries ... I saw a truck handing out food to whichever people happened to be nearby. No way to verify their "need" ... no way to organize the mob. And then it was discovered that many of those people had their food stolen by gangs as they walked home. Easy marks for thieves.


This morning there was a story in The Wall Street Journal about how several Japanese construction companies' stock prices are jumping, because those companies will probably receive large contracts to rebuild harbors destroyed by the tsunami. That's part of the "aid" people have pledged ... profits to Japanese shareholders. No wonder Japan is "contributing" five hundred million bucks to this effort.

Now that four billion dollars have been pledged to "help" the impoverished survivors of the tsunami, the United Nations and other groups are angling to control how all that money will be spent. Who decides? Who gets what? Which corporations will get the contracts?


When you delegate the task of helping others by writing a check to a non-profit organization, how do you trace the results?

I used to work for a non-profit, my local legal aid society. One of my jobs was helping to produce our annual reports for the donors. We tried to quantify and illustrate how their donations were helping ... but the actual money mostly went to pay our salaries. We justified our salaries by pointing to the legal help we offered our clients ... but I wonder ... would our clients have rather taken the money themselves?

When we published the percentage of our expenses that went to "administrative" costs, we didn't include everybody's salary in those costs. We only included the salaries of the management & administrative personnel, roughly 10% of the staff.

Not one dime went directly to the clients. But we claimed that 90% of our donations went directly to "client services".

To be one of our clients your family income and assets had to fall below the poverty line. There are lots of programs like that: food stamps, Medicaid, rental assistance, mental health services, school lunch programs, Head Start, legal aid ... lots of programs that people qualify for by being poor. Why don't we simply give those poor people enough cash to bring them above the poverty line? Give them cash, not food stamps. Give them cash, not rental vouchers. Give them cash with which they can buy their own health insurance, or pay for their own therapy sessions, or buy their own legal help, their own apartment, or whatever they need.


We'd require only one program to bring everybody above the poverty line. It would work like a reverse income tax. It would simply guarantee everybody an income of at least $1 above the poverty line. If your monthly income is less than [x], you'd get a monthly check big enough to bring your family above [x].

Then we wouldn't need to pay all those salaries for all these other programs.

Nobody would be poor.

We wouldn't need any other program, right?


Some of you might like this idea.

Others would immediately start pointing out its basic flaw: if everybody were guaranteed an income above the poverty line, then many people would quit their jobs and enjoy 24 hours per day of free time. Many people would "waste" their incomes on amusements instead of rent, insurance, or food. And then they would still need our help.

But ... don't many people already avoid work so they can qualify for food stamps, Medicaid, rental vouchers, etc.? What's different about that? When I worked for legal aid, one of the problems we helped our clients solve was avoiding too much income or too much savings, so they could continue qualifying for certain benefits.


We donors want to control what our gifts buy. If we give somebody cash, he might use that to buy alcohol or pot or a DVD player. If we give somebody food stamps, then they'll have to buy food. Well ... no they won't. My old apartment is near a poor neighborhood. I've had people with food stamps offer to buy my groceries for me if I gave them the cash. They were even willing to give me a discount!


I think much of our desire to help people is really a desire to control the outcome of their lives. We don't want to give people what they want ... that would be too easy ... we want to give people what we think they need. If we give them cash, they might purchase something they don't "need". They might waste it! So, we spend a lot of money on organizations, trained personnel, screening, and the provision of "services" that maybe no client would buy if they got free money instead.

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