The State and the Collection Plate: the Possibilities and Limitations of Charitable Giving

Abstract

Policymakers and public officials constantly debate how best to assist the poor. Currently, the debate rages about whether the government is too large, and whether shrinking the government means eliminating many public assistance programs, such as aid for heating in the winter, WIC, or food stamps. Those who want to cut such federal programs say that such aid is beyond what government is meant to do. The CATO institute, a powerful right-wing organization, calls for charity to fill this role, in the place of the federal government. America does, in fact, give quite a lot of money to charity each year- hundreds of billions of dollars. Yet, can charity do what the CATO Institute claims it can? This paper explores charity from a variety of facets, concerned primarily on charity aimed at helping the poor -- the kind of charity the CATO institute wishes to replace federal efforts. The paper starts in a more abstract fashion, and moves to a more detailed empirical analysis of how charity works in our country. First, I will look at why people give charity -- ethical, religious, and philosophical arguments for assisting the poor, especially arguments of justice. Then, I will discuss economic analyses of giving to the poor and why people give charity. Third, I will look at how charitable giving works in the United States, asking how much charity helps, and if it could or should replace America's public safety net. [From Introduction]