Honor Among Charities

Every time I see a TV advert for the cause of a charity I vomit internally. How counterproductive is that? They're spending donated money on advertisements in hopes of netting even more donated money. It seems predatory, even fraudulent in my eyes.

The modern charity has its roots in religious tithing. The devout would give a portion of their income (usually around 20%) to the church, which would in turn, give it to the poor and needy and whoever. But before doing just that, the clergy would take a portion of that money for themselves, using the funds to build an even more grandiose church with more buttresses and stained glass, thus attracting more to their flock. The power of the churches grew and grew, eventually leading to centuries of religious war and other bullshit.

Following the decline of the religious powers, nation states often took over the role running charities. Unfortunately, this system worked poorly as well, mostly due to the dampening effects of corruption and excessive bureaucracy that shunted the donated money to other places, such as war funds, royal coffers, and back to those damn churches.

As the world approached modernity, people increasingly distrustful of big government would take on the role of charitymaker themselves, founding philanthropist organizations that would serve as the agents of action for giving to the poor and needy. That's where we are now. But starting last year, everything changed.

The current economic recession not only pulled back on consumer spending, but also cut private donations. In effect, the cash flow to these houses of charity dried up. And that is why almost every day, I have to hear from charities begging for money. I am tired of hearing people pandering for chump change and constantly shouting "GIVE" in my face. For me, this recession has exposed great flaws in the modern charitable organization. Charities suck and they're annoying. Starting this year, they've also become desperate, in addition to being an annoyance to me.

When a person says "I donated $1000 to charity", that is incorrect. He is actually saying, "I donated about ($1000 * 0.65) to charity and I unknowingly gave ($1000 * 0.35) to some strangers that don't even need the cash but took it anyway."

Rather than constantly asking people to blindly give them chunks of money, they should be required to use a more honest approach. Charitable organizations should have a 0% expense ratio requirement. Instead of stealing cash from their own donation bins, they should charge an expense fee for donating money to their cause. For example, if you donate $1000 towards the Sudan, $1000 of your dollars would be spent on procuring food staples for the Sundanese. A separate fee would be charged by the organization to take your money. Similarly, if you donate $1000 to researching cures for disease, $1000 should be spent on medical research, and not 50% into funding research and 50% into a stupid candlelit relay race at a track and field.

Imagine what this would do for the world of philanthropy. Donations would be properly segregated into charitable money and wasted money. Charities would have to openly reveal how much of your donation they bite off when they charge you the expense fee, incentivizing them to keep internal waste to a minimum. Shitty charities would die off, leaving only legitimate charity organizations behind. Television adverts would stop. Door to door clipboard artists would cease to exist. There would be no guy dressed in a Santa suit ringing a bell for your coins.

And that's how the system should be working. Personal donations aren't some cash cow. A donation is money given in goodwill to a total stranger on the promise that it will be used for a beneficial cause. The middleman needs to be kept honest to stay a middleman.