Chapter Seven: Wise Giving


(Note: Spoiler Alert. This post is writing commentary on the book Toxic Charity: How Churches and Charities Hurt Those They Help (And How to Reverse It). This book is being discussed on April 11 by the Avondale United Methodist Book Club. Those who want to read the book before forming opinions are advised to read this column after reading the book. For the rest of you, consider this a long-winded review and commentary on the book, and please comment your thoughts.)

Several billionaires have recently committed to giving away their fortunes to charity. But in doing so, people like Bill and Melinda Gates, or Warren Buffett, are trying to be wise, trying to ensure they get results for the billions they are giving away. They have the funds to do R&D in charitable giving, to find the combination that achieves the results. Lupton suggests that many of these sound business principles are good principles for responsible charitable investing. Among those are:

  • Focus on your passions.
  • Investigate the best practices of those in the field to determine what works.
  • Create a prototype to test new approaches.
  • Record the process.
  • Document the findings.
  • Tweak the methods.
  • Replicate successes.

Putting those into the terms of benevolence:

  • Is it yielding good returns?
  • Is it consistent with our passions?
  • Does it reflect our values about relief vs. development?
  • Is it invested on the cutting edge?

Buffett, in particular, has these questions about his bequests, taking the long view:

  • Are recipients assuming greater levels of control over their own lives or do they show up, year after year, with their hands out?
  • Is leadership emerging among the served?
  • Are their aspirations on the rise?
  • Is there a positive trajectory?

Controlling the Lake

We all know the feed a man a fish/teach a man to fish motif.  But what happens when the fish disappear from the lake due to pollution or overfishing?  Taking control of the lake is a community issue. It isn’t just done on an individual basis. This is why the issue is community development and not human services. There is an implied ownership by the community of their community. Too many people are furnishing human services and calling them community development.

Opportunity International has a specific framework it uses to know who and where to set up its micro-lending opportunities. They ask many questions about community building and economic development. Lupton draws from their system the following:

What questions should we ask about community building work?

  • Who are the producers? – Must be members of the community.
  • Where is the energy? – Don’t worry about scale or impact, follow the energy.
  • What’s the “win” and is it achievable? – Start where people are.
  • Who are the principal investors? – Multiple investors are ideal.
  • What’s the organizing mechanism? – Invest in building capacity for community unity.

What questions should we ask about community economic development work?

  • What are the local assets of our clients? – Focus on households, not just the loan client.
  • What are the assets of this place? – Assess local potential via association, resources, physical assets, local methods of exchange.
  • What’s happening in the local, national, and international markets? — Market opportunity.
  • How are entrepreneurs supported? – need to grow entrepreneurs and future entrepreneurs.

With all of that, a really good question is: does micro-lending work in the United States. Micro-lending requires and ingrained work ethic, entrepreneurial instinct, and stable support system. These are essential just to survive in many developing countries. In the United States, welfare has created generations of dependency and eroded the work ethic.  “Where a people assume that their subsistence is guaranteed, hard work becomes neither a necessity for survival nor a means to escape poverty,” Lupton notes.

It raises an interesting question: Is social security just another way of saying ensured poverty?


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