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The Role of Charity in the U.S.

December 14, 2015
This week the HEW team examined the role of charity in the U.S. in recent years. This blog post evaluates charity’s benefits and disadvantages as well as provides some recommendations on how to improve charitable services for the future.
The Evolution of Charity in the United States

Charity is defined as “the giving of money, food, or help to those who need it, or an organization that does this; charity is also the belief that you should help people”[1].

Charity plays an important role in the American society as 63.4 million Americans volunteered to help their communities in 2009 contributing an estimated dollar value of nearly $169 billion, according to a 2010 report released by the Corporation for National and Community Service[2].

Image (Incentivizing Charity)

Charity has marked U.S. history since Colonial America. John Winthrop, who led the first group of English Puritans to Massachusetts in the 1630s, imparted the “model of Christian charity” that would define his colony [3]. Later, the closer ties to Europe played a prominent role in charity as they transformed American religious life in which churches emphasized compassion and helping[4]. Later in the 1800s charity took different forms. As the Americans were concerned about social causes such as slavery, charity took form of national or state organizations with local chapters that were vehicles for social movement[5]. In the same era, associations, private charities and volunteering all played a prominent role in the American Civil War. Different non-government entities mobilized volunteers and organized fundraising events to provide health care as well as other needs of the armed forces[6]. Charity in the U.S. took different forms from volunteering to schools building; it evolved from religious mission to civic duty[7]. However, the concept of “non-profit organizations” dates back only to the 1970s. Actually over 90 percent of organizations currently in existence were only created since the 1950s. This could be explained by the devolution of the welfare system under the Reagan administration. The Reagan administration substantially decreased federal welfare expenditures by downsizing federal grants to state and local governments and making sizeable cuts in education and community development grants [8]. Developmental grants, for instance, were cut from 1.5% to 1.1% of GNP between 1982 and 1990[9] This has increased the dependency of people in need on non-governmental organizations and charity and has emphasized the role of charity and volunteering in the American society [10]

Pros and Cons of Charity

Charity has long been a tool of society used to help others when government programs cannot. Aside from relieving the problems of homelessness, food insecurity, etc., charity has the benefit of being flexible. Unlike government programs that work on the country level, private philanthropy can adapt to local needs.[11] Charities are also effective for addressing problems that aren’t widespread enough for the government to address, or problems that only affect a few people.[12] However, while charity is flexible and does help to alleviate these problems, there are still many issues that charity creates.

One of the major criticisms of charity is that it often targets symptoms instead of causes.[13] Rather than treat the causes of homelessness such as mental illnesses, disabilities, job loss, and domestic violence, charities seek to give shelter to the homeless.[14] The same is true for the problem of food insecurity. Food banks and private charities that donate to those in need focus only on providing food, rather than try to prevent the problem in the first place. Unlike charities, governments prioritize infrastructure and other sectors that are crucial to create jobs and thus reduce poverty. However, charities rarely look to reduce poverty in this way, instead using donations to take care of present issues without focusing on the future.[15]

Another major problem of charity is that donors choose where to put their money. This means that many unpopular causes are forgotten in favor of more popular charities. This inefficiency of private charities leads to competition and ensures that many with great need for charity will never receive it. US anti-hunger campaigner Robert Egger notes, “I have to compete sometimes with people who want to feed children [to the exclusion of others]. And I hate that. All hunger is wrong…the reality is there’s more than enough food to feed everyone who’s hungry.”[16]

While charity has unique benefits and can help solve issues that the government cannot address, there are many other problems that arise from charity. Charity is flexible, but it doesn’t address the root causes of the problems that they target. Charities are also so plentiful that they often result in only a few charities being successful while others are forgotten. As a complement to governmental programs, charity serves to help society, but with a lack of good government programs, charity can lead to more problems than solutions.



Charity has certainly provided valuable services for countless individuals, but like with everything there are areas of improvement many would benefit from. Some people believe that charity should provide a variety of services that while others believe that different entities, such as the government or the beneficiaries themselves, hold responsibility instead. For instance, they may think the government should not provide certain services because taxpayer dollars are already overextended and there is not enough money to fund everything, or that a charity may be more appropriate to support a cause than the government (if it is a cause that not everyone supports, or something better understood and addressed by a specific community). Yet it is important to consider when charities may actually cause harm. Individuals who benefit from a philanthropy may become dependent on its services to their ultimate detriment. For instance, beneficiaries might stop working toward developing a stronger community in a more sustainable way, such as using loans from the federal government to build more businesses and improve the local economy. So with this in mind, it is important that charities consider work to solve long-term systemic problems rather than providing short-term band-aid solutions that may improve people’s immediate situations while stymieing future development. A related concept is also planning an exit strategy, so that if the charity closes or focuses its resources on a different population the original beneficiaries will not suddenly find themselves in need. In addition to considering the implications of charities on individuals’ complacency, it is also important to concerns about making the government complacent are also crucial to consider. If members of the government think communities’ concerns are adequately addressed by charities, they may devote fewer resources to those areas, thus decreasing the total aid they receive. 

Some charities have faced criticism for focusing on providing aid to people who need help relatively less than others. Thus, the funds they spend tackling the issue they’ve chosen to focus could have been donated to an organization that helps people who would benefit from resources more. For example, ethicist Peter Singer suggests that we should instead focus on metrics like number of lives saved or numbers of years of life extended, and solving the root cause of the problem. One example is comparing the relative value of of training a guide dog for the blind for $42,000 in the U.S. versus funding trachoma surgeries in Africa, which “costs as little as $25 per person and is 80% effective. That  same money, then, could restore the sight of 1,344 people.” [17] Whereas guide dogs provide a valuable service to their owners, the surgeries actually cure blindness and benefit many more people.

The charity could also be inefficient not in choosing a cause to support but in the allocation of its funds. Several organizations aim to examine this; for example, the non-profit Charity Navigator seeks to provide a guide for “intelligent giving” by helping consumers understand which charities most efficiently provide aid. It uses seven metrics to analyze charity’s financial efficiency and capacity, including: program expenses, administrative expenses, fundraising expenses, and fundraising efficiency, revenue growth, program expenses growth, and amount of working capital.[18] These metrics have important implications that many organizations have decided to take into account when budgeting, and may influence people choosing where to donate.

A related implication is the need for more charities to track metric topic that would make determining the effectiveness of charities and the efficiency of dollars spent on them is needed. This would help charities better understand their own allocations and their impact on their long-term vision. Measuring success in more tangible ways could also help other organizations judge them. And it could help them gain funding, as government and philanthropic contributions may decrease in and they are competing with other charities for donations. Of course, this is easier said than done; a variety of real-world factors make it difficult to actually measure a concept like number of lives saved. For example, bed nets distributed in areas with malaria can save many lives; but it is hard to measure how many nets are being used properly or how many people would have survived without using a bed net. GiveWell, a nonprofit whose mission is to analyze philanthropic organizations’ impact, gives the example of oral rehydration treatment for diarrhea, which “may cost only a few cents, but it costs money to get it to each home and village so that it will be available when a child needs it, and to educate families in how to use it.”[19] It is difficult to not only measure the real impact of interventions, but also their true costs. Though understanding and measuring the numerous and convoluted factors that affect impacting lives, more precise metrics would help charities understand how best to allocate their resources and inform donors seeking to give their money to high-impact charities.

In the middle of the givingest season–most Americans give 24% of their annual donations between Thanksgiving and Christmas–it is important to consider not only the role of charity in society, but also ways to make it as efficient as possible to positively impact beneficiaries.[20]





  [1] “charity” in American English.” Cambridge Dictionaries Online. Accessed December 6, 2015.


  [2] Neuman, Johanna. “The Distinctly American Tradition of Charity.” US News. October 18, 2010. Accessed December 6, 2015.


  [3] “Philanthropy Timeline.” National Philanthropic Trust. Accessed December 6, 2015.


  [4] Hall, Peter Dobkin. “Historical Perspectives on Nonprofit Organizations in the United States.” In Inventing the Nonprofit Sector: Essays on Philanthropy, Voluntarism, and Nonprofit Organizations. 1992


  [5] Hall, Peter Dobkin. “Historical Perspectives on Nonprofit Organizations in the United States.” In Inventing the Nonprofit Sector: Essays on Philanthropy, Voluntarism, and Nonprofit Organizations. 1992


  [6] Hall, Peter Dobkin. “Historical Perspectives on Nonprofit Organizations in the United States.” In Inventing the Nonprofit Sector: Essays on Philanthropy, Voluntarism, and Nonprofit Organizations. 1992


  [7] Neuman, Johanna. “The Distinctly American Tradition of Charity.” US News. October 18, 2010. Accessed December 6, 2015.


  [8] Peterson, Paul E. Devolution’s Price. Vol. 14. Issue 2 Yale Law & Policy Review- Symposium Issue, 1996.


  [9] Peterson, Paul E. Devolution’s Price. Vol. 14. Issue 2 Yale Law & Policy Review- Symposium Issue, 1996.


  [10] Wineburg,Robert J. Coleman, ,Brian L. Boddie, Stephanie C.and Cnaan, Ram A. Leveling the Playing Field: Epitomizing Devolution through Faith-Based OrganizationsVol. 35. Issue 1 The Journal of Sociology & Social Welfare, 2008.


  [11] Husock, Howard. 2015. More Independence, Greater Results.February 18. Accessed December 7, 2015.http://www.nytimes.com/roomfordebate/2012/11/27/are-charities-more-effective-than-government/more-independence-greater-results.


  [12] Lenkowsky, Leslie. 2012. A Crucial Complement, Not a Replacement.November 27. Accessed December 7, 2015. http://www.nytimes.com/roomfordebate/2012/11/27/are-charities-more-effective-than-government/a-crucial-complement-not-a-replacement


  [13] BBC. 2014. Arguments Against Charity.Accessed December 7, 2015. http://www.bbc.co.uk/ethics/charity/against_1.shtml.


  [14] HomeAid. n.d. Top Causes of Homelessness in America.Accessed December 7, 2015. http://www.homeaid.org/homeaid-stories/69/top-causes-of-homelessness.


  [15] Briscoe, John. 2012. Vital Needs Don’t Always Attract Donations.November 27. Accessed December 7, 2015. http://www.nytimes.com/roomfordebate/2012/11/27/are-charities-more-effective-than-government/vital-needs-dont-always-attract-donations.


  [16] BBC. 2014. Arguments Against Charity.Accessed December 7, 2015. http://www.bbc.co.uk/ethics/charity/against_1.shtml.


  [17] Rosenberg, T. (2012, December 5). Putting Charities to the Test. Retrieved December 7, 2015, from http://opinionator.blogs.nytimes.com/2012/12/05/putting-charities-to-the-test/?_r=0 


  [18] How Do We Rate Charities’ Financial Health? (n.d.). Retrieved December 7, 2015, from http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=35#.VmTEHOODFBe


  [19] Cost-effectiveness. (n.d.). Retrieved December 6, 2015, from http://www.givewell.org/international/technical/criteria/cost-effectiveness


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  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.


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