Charities have more independence and thus greater results

Excerpts of an opinion on the question “Are charities more effective than Government?”, by Howard Husock, vice president for policy research at the Manhattan Institute:

Private charity will not be able to provide dollar-for-dollar substitute financing for reductions in government social programs. But it’s important, first, to acknowledge the fact there is a limited record of success in government social service programs.

Privately financed efforts have an advantage in helping individuals with their own special situations. That’s because private philanthropy, even through smaller expenditures, can adapt to local conditions and be led by local champions who must show donors results. That diversity of approaches is something which one-size-fits-all federal programs inhibits.

Plus donors who are matching or influencing the spending of public money directly especially have an obligation to set goals and track results.

Vital needs don’t always attract vital support

Excerpts of an opinion on the question “Are charities more effective than Government?”, by John Briscoe, professor of environmental engineering at Harvard University, and a former World Bank official:

The priorities of charities are appropriately set by those who finance and manage those charities. But it seldom stops there. [Apart from non-governmental organizations that focus on health and education,] governments typically and necessarily see things like jobs as overwhelming priorities and sectors like infrastructure as critical for creating jobs and reducing poverty. I know of not a single nongovernmental organization that focuses on job creation, the provision of electricity at scale, or transport.

As a senior official in the World Bank I saw this dynamic at work every day. NGOs would lobby their governments for more attention to health, education and the environment. Rich country governments would then use their position on the board of the World Bank to push for these priorities.

Over the last 20 years this has led to a profound distortion in the priorities of the bank, with the social sectors becoming dominant and, for a long time, infrastructure lending – the original mandate of the Bank – falling to less than 10 percent of total lending.

An interesting evolution over the last decade has been the rise of countries like China, India and Brazil that give high priority to things like infrastructure, and as their weight in the global system has increased, this has led to somewhat of a rebalancing of priorities at an institution like the World Bank, but, more important a rebalancing in options for developing countries.

These countries, having recently emerged from poverty, know that it is not by putting the social cart before the economic horse that development and poverty reduction happen. They have little patience for the pleas of philanthropists rich and poor to deny poor countries the option of following the only known road to poverty reduction.

Charities a crucial complement

An opinion on the question “Are charities more effective than Government?”, by Leslie Lenkowsky, professor of public affairs and philanthropic studies at Indiana University:

The idea that charity can take the place of government spending is absurd on its face. The U.S. federal government alone spends far more than the $300 billion Americans donated to nonprofit groups last year. Moreover, much of that giving goes for purposes that would be low on any government’s priority list.

But that is exactly why philanthropy is valuable and deserves encouragement through tax and other public policies.

The basic debates in any type of government are always over what is in the public’s interest. But another way is by allowing each of us to give money or time – often collaborating with others — to try out what we think will address particular aspects of the public interest. That is the domain of philanthropy. It is especially important for people with ideas that may be unpopular, innovative, or directed at a minority of the population.

Those with more money and time can, of course, have more influence in philanthropy. But they can have more influence in politics as well. And in philanthropy, because its focus is on the particular, not the general, a little giving can go a long way. You don’t have to be rich to be a successful donor.

Philanthropy, in short, is an expression of pluralism. Its goals differ from those of politics and the standards applicable to government actions, such as fairness, do not fit what it does.

Top American charities struggling

Many of America’s biggest nonprofits have officially left the Great Recession behind, but the slow economic recovery continues to dampen results at even the most sophisticated fundraising organizations.

The 400 groups that raise the most from private sources achieved a median 7.5-percent gain last year. That’s much better than for the rest of the nonprofit world: Giving USA said charitable giving over all grew less than 1 percent last year.

But the outlook among the top 400 charities is far less optimistic for 2012, with nonprofits forecasting a median gain of less than 1 percent.

Venture philanthropy and cures for deadly diseases

Once certain that he would die young, a young man, born with the deadly disease, now dreams of growing old. “I’m going to be a grandfather someday. I’m going to have a really long life,” says Bill Elder, a 25-year-old Stanford University graduate who is now applying for medical school.

That’s because of a blue pill and a new trend in drug development called venture philanthropy.

Elder has cystic fibrosis (CF). It’s known as an “orphan disease” because so few people have it — only about 30,000 in the U.S. and about 70,000 worldwide — so there is little incentive for drug companies to seek a cure.

When Piper Beatty was born 30 years ago and diagnosed with CF at 6 weeks, health workers gave her parents a heartbreaking message: “Take her home and love her as long as you have her.” At that time, the best the family could hope for was that she would live to be a teenager. Beatty, now 30 and a law school graduate, has high hopes for improved therapies for CF patients and others born with rare genetic diseases.

Developing a single new drug can cost a billion dollars, so pharmaceutical companies want to create blockbusters for common diseases like Alzheimer’s or cancer to maximize the return on their investment.

“From a patient perspective, venture philanthropy is a remarkable strategy,” Beatty said. “It’s the best of business and the best of philanthropy coming together. It allows us to be very active in the drug development process. It allows people with a stake in the disease to get involved to partner with the drug companies. You take an active role at the forefront of the fight.”

Other charities including the Michael J. Fox Foundation, which is fighting for a cure for Parkinson’s, are following the CF model.