Scrooge was right about charities

Public social programs are more efficient than charities

When Ebenezer Scrooge was asked to give some money to charity, his retort was, “Are there no prisons? And the Union workhouses? Are they still in operation?”

Scrooge was right to reject charities as an effective tool for addressing the social needs of people.

Charity Intelligence Canada (CIS) updated a report on Canadian sports teams’ charities on Oct. 22. The $49.7 million Canadians gave to sports teams’ charities — primarily through donations and special events — makes them among the largest charities in Canada.

CIS’s investigation found a significant amount of the money raised by Canadian sport teams’ charities do not go toward the identified cause.

For example, the Calgary Flames Foundation only gave 30 per cent of the money it collected toward its cause. True North Youth Foundation fared better by managing to get 65 per cent of the money collected toward its cause.

This is not a phenomenon unique to sports teams’ charities either. To be considered an effective and top charity by CIS, a charity must spend more than 65 per cent of their budget on its cause. The most efficient charity is Food Banks Canada, which spends about 95 per cent of its money on its cause.

Most charities do not even come close to Food Banks Canada’s level of efficiency. But government programs far exceed the efficiency of even the most efficient charities.

For example, the administrative cost of Canada Pension Plan (CPP) between 2015 and 2016 was just under 3.5 per cent of the total amount paid out. Meanwhile, CPP helped 5.5 million people stay out of poverty. In fact, CPP is one of the most successful initiatives designed to reduce poverty among the elderly in Canada.

When it comes to social need (health care, poverty reduction, education, housing, etc.), universally accessible, public programs work the best.

In 2016, the Winnipeg Regional Health Authority only spent 4.17 per cent of its annual budget on administrative costs. It can keep administrative costs low while employing 28,000 people, offering health care to all of Winnipeg and operating “over 200 health service facilities and programs.”

No charity even comes close.

Charities are a philosophical nightmare. First a charity must make the decision of who exactly deserves its attention and resources. Once the charity chooses its deserving poor, it must go around and beg for money from donors by appealing to their empathy and morality. This creates an asymmetrical relationship between the people choosing to help and those lucky enough to be selected.

Charity depends on moral pity. Public social programs depend on solidarity.

While the moral deficit embodied by charities will never be addressed, charity supporters have worked to quell the criticism of charity efficiency. Numerous organizations have cropped up in recent year to help and sift through charities to elevate the efficient. A major focal point of these groups is to find charities providing the most bang for your buck.

One of these organizations, Giving What We Can, argues spending US$50,000 to train a guide dog for a blind person is far less efficient than spending US$1,000 to remove cataracts blinding one of the 20 million people in developing countries affected.

There is an indescribable level of actuarial callousness exhibited here which transforms social needs of two groups into a competition. Is this really how people should decide who receives help and who remains in despair?

Meanwhile, 10 per cent of global GDP is sitting idle in tax havens around the world. If governments acted to seize this money, every person who needs cataract surgery or a guide dog would have their social need fulfilled. Yet the supporters of charities would have you believe the only real decision is between fixing the eyes of the global poor or providing a dog for one person with blindness in the developed world. Be a Scrooge and a reject that premise.

Workhouses and prisons are no solution to human need. Workhouses forced the poor to do labour to sleep in its compounds and eat paltry amounts of food. In 1845, two years after A Christmas Carol was published, people at the Andover workhouse began to fight over the rotting meat and bone marrow they were using to create fertilizer in desperation.

Since then, the poor have organized and produced better social programs, which have made great strides toward satisfying human need. But the answer to remaining human need is not charity, it is expanding public social programs and building international solidarity.

Scrooge, like our modern-day elites, is loathe to part with his money. We cannot rely on those in Scrooge’s class to feel pity to satisfy human need. Ghosts cannot be humanity’s saviour.