Category Archives: philanthropy

The Poor Give More than Most?



I’d like to see the methodology used and how charitable giving was measured, but on the face of it, this information seems to be commonsensical.

If you are low-income, chances are that the people that you know are also living through touch economic times. If a neighbor is in need of help, you do as much as you can. You can relate to where the person in need is coming from and you see that need on a daily basis.

When I worked with homeless individuals, I was often surprised by the small acts of philanthropy they practiced  daily. They tended to be generous almost to a fault, as they regularly shared food and blankets with each other, along with other items that are less healthy, but provide comfort. They ‘took care of their own.’

It seems that kind of behavior is unexceptional among those in need.


A Failure of Economics – Or the Economics of Nice People


Sam Bowles argues in Science June 20 that economics will get it wrong then, sometimes badly so. He points to new experimental evidence that people do often act against their own personal self-interest in favor of the common good, and they do so in predictable, understandable ways. Poorly-designed economic institutions fail to take advantage of intrinsic moral behavior and often undermine it.

I’m glad someone is doing some work on this point. In economics classes, we were always told that people behave in their own “rational self-interest.” When we brought up people behaving kindly through philanthropy or whatever, that kind of behavior was dismissed as “extra-rational.”


Take this example: Six day care centers imposed a fine on parents who picked their children up late. The effect? Tardiness doubled, and it stayed high even when the fine was removed. Parents, it seems, stopped seeing lateness as an imposition on teachers, and instead saw it as something that could be purchased with no moral failing.

Another example is a study this year which showed that women donated blood less frequently when they were paid for it than when it was an act of charity.

These examples show that economists ignore human altruism at their peril. Standard economic theory assumes that incentives that appeal to self-interest won’t affect any natural altruism that may exist, but that assumption is clearly wrong. Bowles discusses the research to date that helps to explain when and why that assumption breaks down.

As the world becomes more interconnected and the resulting challenges to humanity increase, learning to harness these altruistic impulses becomes even more important, Bowles says. So the economists’ “holy grail,” to learn to design institutions and policies to direct the selfish impulses of individuals to public ends, “will be necessary but insufficient,” Bowles says. “The moral nature of humans must also be recognized, cultivated, and empowered.”

Humans have natural altruistic impulses? Selfishness may not be a virtue?

If Ayn Rand weren’t dead, this would kill her.

Indianapolis Wins 2012 Super Bowl

Good news for Indianapolis.

Yeah, I’m feeling a little bit of civic pride since Indy will host the Super Bowl. It’ll be good for this kinda dorky city to get national exposure, and it should bring a lot of money to the city.

That’s all great.

But what I find most intriguing about the Super Bowl in Indy is that the city is using this opportunity to try to redevelop the Near East side of the city, which is in dire need of help.

The city’s plan is to build upon efforts already going on in a neighborhood where 36 percent of the households live below the federal poverty level and that was devastated in June 2006 by the killings of seven family members in a home robbery on Hamilton Avenue.

“The plan is to make us a neighborhood of choice rather than a neighborhood of last resort,” said Tracy Heaton, president of the Near Eastside Community Organization.

It (the legacy project) calls for turning around an area twice the size of Fall Creek Place, a redevelopment project in a 17-square-block area near Downtown that transformed a crime-ridden neighborhood into one that attracted $75 million in private investment.

I work on the Near East side of Indy. As a neighborhood, it’s a total fucking nightmare, full of abandoned houses, drugs, and violence. If the project helps to rebuild the area while allowing low-income families to stay in their homes, the Super Bowl might be 100 times better for the city than I thought it would be.

Here’s hoping that the Super Bowl in Indy will mean a lot more than a football game and street parties in the middle of winter.

The Bee Stings of Poverty

The Boston Globe published an article on Sunday that examines the work of Charles Karelis and his new book,The Persistence of Poverty: Why the Economics of the Well-Off Can’t Help the Poor that rethinks the ways we view the behavior of poor people:

In the community of people dedicated to analyzing poverty, one of the sharpest debates is over why some poor people act in ways that ensure their continued indigence. Compared with the middle class or the wealthy, the poor are disproportionately likely to drop out of school, to have children while in their teens, to abuse drugs, to commit crimes, to not save when extra money comes their way, to not work.

To an economist, this is irrational behavior. It might make sense for a wealthy person to quit his job, or to eschew education or develop a costly drug habit. But a poor person, having little money, would seem to have the strongest incentive to subscribe to the Puritan work ethic, since each dollar earned would be worth more to him than to someone higher on the income scale. Social conservatives have tended to argue that poor people lack the smarts or willpower to make the right choices. Social liberals have countered by blaming racial prejudice and the crippling conditions of the ghetto for denying the poor any choice in their fate. Neoconservatives have argued that antipoverty programs themselves are to blame for essentially bribing people to stay poor.

In my work as a case manager for homeless people, one of my great frustrations has been that so many of my clients make decisions that seem to act against their own rational (in the economic sense) self-interest. Too often, when offered the choice between the prospect of long-term steady employment or day labor (in which work is never certain, and when work is available, they are charged all kinds of fees for things like check cashing, mandatory lunch (often donated by church groups), and transportation and end up with $40 net after working 12 hours in a day), they pick the job that will pay them daily.

In my view, that kind of day labor is perfect for an addict as even though the job might stink, at the end of the day, the person has enough money in his pocket to buy a burger, a bottle and a rock of crack. For non-addicts, that kind of work never made much sense to me.

Karelis, a professor at George Washington University, has a simpler but far more radical argument to make: traditional economics just doesn’t apply to the poor. When we’re poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated. This is where the bee stings come in: A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems.

Have you ever been poor? If you have, you’ll understand this idea. Your economic and other problems lead you into situations where you may not act in an economically rational fashion. Payday loan? Why the hell not? It will help resolve the current crisis and the consequences can be dealt with later. Behind on the bills? Eh, the bills are so overwhelming, that it might make more sense to have a little fun to think about something else. Financial management doesn’t involve planning for the future in this case, but rather finding ways to make things a little bit better.

Poverty and wealth, by this logic, don’t just fall along a continuum the way hot and cold or short and tall do. They are instead fundamentally different experiences, each working on the human psyche in its own way. At some point between the two, people stop thinking in terms of goods and start thinking in terms of problems, and that shift has enormous consequences. Perhaps because economists, by and large, are well-off, he suggests, they’ve failed to see the shift at all.

I think that’s the key. People start thinking in terms of problems and how to alleviate them the best they can. Economic rationality begins to play less of a role than simply working to feel better, and that’s when some of the behaviors that more well-off people can’t understand begin to take shape.

Perhaps I’m a little too amazed at times when a client spends his money in ways that won’t help them end their homelessness.

It’s easy to blame people for their situations, and certainly, we are all responsible for our own actions, but living in poverty can have a profound impact on why people make the choices they do that seem “irrational” to the rest of us.

“The core of the problem has not been self-discipline or a lack of opportunity,” Karelis says. “My argument is that the cause of poverty has been poverty.

I look forward to reading Karelis’ book.

Dr. Evil

About a year ago, I wrote this diary on Daily Kos, about Richard Berman, the Executive Director of the Center for Consumer Freedom, an organization that fights for your right to eat, drink and do what you wish to do without learning that there might be consequences involved with eating too many Hardee’s Thickburgers or driving while intoxicated. He was being profiled on 60 Minutes and I wanted to let people know a little more about Berman and his organization.

I was just informed of his new site, Sun Light Scam, sponsored by the Indoor Tanning Association and decided to repost my piece from last year:

If you’re familiar with Richard Berman, you know that he is the Excecutive Director for the Center for Consumer Freedom, a 501(c)3 that states its mission is: “Research and education on food, beverage and lifestyle issues.”

That sounds reasonable enough, I think. Who could be against any organization that is providing research on education on food, beverage and lifestyle issues?

Certainly not me.

From the CBS website:

Unlike the villain in the Austin Powers spy-spoof films, this “Dr. Evil” — a.k.a. Washington lobbyist Rick Berman — doesn’t disappear when movie credits roll. He’s a constant gadfly to other lobbyists and do-gooders who label him evil for taking money from corporations to fight causes like animal rights, healthy food, labor unions — even Mothers Against Drunk Driving.


Through non-profit educational entities that corporations contribute to, Berman creates commercials that attack groups whose messages can harm the interests of those corporations. For example, one commercial, under the Center for Consumer Freedom label, shows a child whose ice cream is taken away and adults whose food and drink are likewise snatched. “Everywhere you turn, someone is telling us what we can’t eat … Find out who’s driving the food police,” explains the voiceover.

A quick look around The Center’s website can give you a pretty clear idea what this guy is about.

For example, this article celebrates our nation’s independence day by informing us that our founding fathers were a bunch of gluttons and drunks who would be appalled by campaigns to try to teach people how to eat a little more healthfully.

Of course, it wasn’t always this way. Stick these Founding factoids in your cap:

Thomas Jefferson served French fries at the White House and is credited with introducing vanilla ice cream to the United States.

It’s no accident that a brand of ice cream was named after James Madison’s wife Dolly, who was known for serving the treat to her guests.

People often ate more than 5,000 calories a day, washing their beef and pork-heavy diets down with plenty of wine, beer, and spirits.

In the world of food cops, the Founders would have been shackled in the stockade. Meanwhile, groups such as the Center for Science in the Public Interest continue the long tradition of Prohibitionist attempts to control the consumption of adult beverages. But consider the responsible use of alcohol during the Revolutionary period:

During the Revolutionary War, George Washington made sure his troops received a quart of beer each day.
Jefferson drafted the Declaration of Independence while downing pints at the Indian Queen Tavern in Philadelphia.

New York’s first City Hall was located at a tavern.

Washington, Jefferson, Samuel Adams, and Benjamin Franklin all enjoyed brewing or distilling their own adult beverages.

So beware of dietary Puritans and their war on personal responsibility. Though they have yet to make it official, their independence from common sense was declared long ago. How can you help prevent food cops from putting you through a culinary crucible? Add your John Hancock to our Declaration of Food Independence now!

In this piece from the Tarnished Halo awards, Berman and the Center reveal some borderline racism in their attack on Al Sharpton:

The “Reverend Rooster” Category

Awarded to Al Sharpton, the publicity-seeking preacher, for joining PETA to crow at KFC restaurants and attempting to instigate a boycott from the African American community. It’s odd that Sharpton would stand side-by-side with PETA, which advocates a complete end to chicken consumption. When the reverend emerged from prison in 2001 after a four-week hunger strike, he didn’t ask for tofu and lentils. He told a crowd of well-wishers: “I’m going to walk through Harlem just to settle in again, then I’m going to Amy Ruth’s for some fried chicken.” That restaurant’s menu carries a dish named after Sharpton—it’s chicken and waffles.

Most every page on his site is pretty ludicrous, as are some of the other web sites Berman sponsors.

On, Berman attacks groups like the Humane Society and the Sierra Club among many others.

Other sites of interest are:,, and in which he encourages pregnant women to not worry about mercury poisoning and to just go ahead and eat more fish.

USA Today wrote this about Berman:

WASHINGTON — A longtime labor union official calls him Dr. Evil. The director of a consumer group says he’s “sleazy” and “sophomoric.” And a liberal newspaper columnist wrote that the tobacco, booze and gun lobbyists portrayed in the movie Thank You for Smoking were a “pale imitation of the reality of the Beltway’s most outrageous advocate.”

The same article reports:

Berman’s latest campaign, launched this week, goes after labor unions with TV commercials and full-page ads in newspapers, including USA TODAY. It may prove as incendiary as one in May, paid for by Berman’s Center for Union Facts, that accused labor unions of discriminating against minorities and bankrupting industries. He targets labor unions because, he says, they intimidate workers to get them to join.

“Somebody’s wasting a lot of money,” says Stewart Acuff, the AFL-CIO’s national director of organizing. “This guy is just another tool of right-wing anti-worker forces. The ads have been an attempt to create a negative impression, but for the amount of money spent on them they are remarkably poor.”

Berman spent the last couple of years fighting obesity-focused trial lawyers and consumer groups who have succeeded in getting trans fats out of many foods and soft-drink machines out of schools — the latter a move he finds ludicrous because high-calorie juice is allowed and diet drinks aren’t.

Last year, after Berman openly criticized the government’s numbers, the Centers for Disease Control lowered the estimate of the annual number of deaths attributable to obesity from 400,000 to less than 26,000.

Currently, he’s predicting that when they’re done with fat, the food-safety groups will focus more on demonizing caffeine. And MADD, he says, won’t be happy until there is a breathalyzer in every car and social drinkers are scared into public sobriety.

Berman is best known for fighting the Americans with Disabilties act and for being involved in an ethics scandal that involved Newt Gingrich.

Berman states that his nonprofit have not benefitted him personally, but if you look up the Center for Consumer Freedom on GuideStar, you’ll learn that Berman made only around $18,000 for his direct work with the Center, but for some reason, Berman’s organization Berman and Company was paid $1.6 million by the Center. I wonder what percentage of that $1.6 million went directly to Berman….maybe all of it?

Who is funding the Center?

We don’t know. From the Center’s site:

Many of the companies and individuals who support the Center financially have indicated that they want anonymity as contributors. They are reasonably apprehensive about privacy and safety in light of the violence some activist groups have adopted as a “game plan” to impose their views.

So in other words, we don’t know who is funding them, but we have a pretty good idea that it’s the fast food and alcohol companies.

And the artificial tanning industry.

Best Road to Happiness? Give Away Your Money

As a student of philanthropy, I often find myself engaged class-room discussion about why people give to charities since it’s not a rational act in the economic sense. My contention has always been that giving is a rational act as donors gain quite a bit of satisfaction by giving to a worthy person, cause or organization; that kind of satisfaction is often greater than what they would have gotten by keeping all of their money.

It’s nice to see my theory backed up:

New research reveals that when individuals dole out money for gifts for friends or charitable donations, they get a boost in happiness while those who spend on themselves get no such cheery lift.

Scientists have found evidence that income is linked with a person’s satisfaction with their life and other measures of happiness, but less is known about the link between how a person spends their money and happiness.

“We wanted to test our theory that how people spend their money is at least as important as how much money they earn,” said Elizabeth Dunn, a psychologist at the University of British Columbia.

Later in the article it’s noted that income is not a determining factor in this equation since poor people who give tend to be as happy than more affluent philanthropists, which is an important point as some of the least happy people I know have quite a bit of money and are misers while some of the happiest people I know don’t earn much, but who really like to give.