Meditations of the Idle Rich

The Nonprofiteer was doing some charitable giving the other day–the first quarter is over, taxes are paid, financial situation is clear–and noticed the following disquieting things:

  • She’s not actually giving very much when measured by her net worth–what looked and felt like a lot of money, and was intended to constitute her giving for the entire year, turned out to be a mere 2-1/2% of her net worth.  She’s always fallen far short of tithing, but at last computation her gifts amounted to more like 5%.  The lesson: make sure your giving is keeping pace with your wealth.  If you have any money at all in equities, you’re likely quite a bit richer now than you were even at this time last year.
  • None of her gifts went to other donors (the Chicago Foundation for Women, the Crossroads Fund).  Should they?  Are the problems she’s concerned with more likely to be solved through that sort of collective action, or is she just adding a layer of bureaucracy between her gift and the agencies that need it? 
  • She’s giving to ten recipients but maybe five recipients getting twice as much would be better.  It would certainly be better for the groups receiving double the funding; would it really be more "strategic," have more of an impact on the problems the she hopes to help solve?  Or would it just injure and incapacitate the groups voted off the island, without any countervailing benefit?
  • If she is giving to too many groups, she has no idea how to whittle them down.  They’re all in the right areas–she made sure of that years ago, creating five categories of work to support: women, poverty, education, arts and culture, human/political rights.  None of those areas seem expendable.  In choosing [among] recipients, she considers what other access they have to funds: less to her alma mater because of its thousands of alumni, more to the Chicago Abortion Fund because some people consider its work controversial and won’t support it.  But she isn’t willing to cut off the University of Chicago entirely–she owes it everything. 
  • Which reveals that she doesn’t know what, precisely, she’s doing with her charity–repaying debts, or enacting ideals, or solving problems, or ameliorating suffering.  Needless to say, until it’s clear what she’s trying to do it’s hard to tell whether or not she’s succeeding.
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6 Responses to “Meditations of the Idle Rich”

  1. Holden Says:

    It’s cool that you’re sharing these thoughts. I wish more people would discuss their charitable giving. My unsolicited opinions:

    I think it would be smart to budget your charity by your personal goals, instead of by cause. In other words, decide how much you want to spend repaying debts vs. how much improving the world. Then, within that, budget by cause/organization.

    Improving the world is the only one I’m interested in, and when it comes to that, I would argue that the “none of these seem expendable” logic is off base. Even if you’re making big donations, you’re just a tiny piece of the pie. Pick the one(s) where it seems like your donation will have the most impact – to the extent that a charity is “underfunded,” conceptually it should mean that your dollar has more impact there. This probably means fewer charities, bigger donations, and accepting that certain important causes will have to live without your donations so that the higher-impact ones can get more.

    Investors don’t worry that they’re only investing in some businesses, and ignoring others that are vital to the economy – they just put their dollars where they fit best, and we’re all better off for it.

  2. Nonprofiteer Says:

    This is a great perspective and I’ll try applying it to my giving. Unlike you, I can’t say that changing the world is my only concern–I also couldn’t live without its beauty–but it’s a fruitful speculation, for which I thank you.

  3. Jerry Says:

    Someone needs to write a book – maybe charitable giving for dummies type of thing. I know that I would probably give more but always get bogged down. Trying to figure out whom to give to and fretting over if my contribution is really doing something positive or just buying paper clips is all daunting. Add personal goals into the mix, which really is a fantastic idea, and the process has just gotten more complex. Perhaps I’m whining a bit too much here, but the point is that it’s so much easier to not give and that’s a shame as there really is a great need out there.

  4. Holden Says:

    Nonprofiteer – when I said “improve the world,” I mean it broadly. That can include promoting beauty. The things I’m not interested are giving as expression (words are best for expression, giving should be to accomplish something) and giving as debt repayment (if you ask me, your real debt is to the world as a whole, and that’s what you should repay). And, it’s important to recognize that you are a single donor, not a microcosm of the whole capital market.

  5. Anita Bernstein Says:

    Nonprofiteer, I second Jerry’s call for a Dummies book on how to give money to charity. Needless to add, you should be its author.

  6. Nonprofiteer Says:

    The more I think about charity, the less I know–but I guess that qualifies me as the eponymous dummy. Thanks for the suggestion.

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