The Human Fund and other Donations for the Holidays

I just thought I'd stand on my soapbox for a moment:
As the season is now upon us it is time again for the bell ringers to stand in front of the local Wal-Mart and for many charities to ask for donations. How do charities play into the economics of the nation this year? I am left to wonder after the many natural disasters and happenings of 2005 if there is still anything left to give. Many still seem to be able to find it in them to give for the holidays. I think that no matter our own circumstances and no matter what we've already given that to really feel the spirit of the season we need to continue to help others in need.


Nate said...

I completely agree witht the post. Despite all the money that has been given by generous people this year, there is something about the holidays that brings out the caring side in most people. It would not really be the holidays if we did not continue to give what we could so that the less fortunate would be able to enjoy this time of year also. Give what you can and it will be appreciated.

Dr. Tufte said...

Are you ready for a dose of disturbing economics?

Suppose you have two charities that you like to give to, and that you can rank them best and second-best.

Now, suppose you give some money to the one that you ranked best. Can you give them enough money for the problems they address to switch your rank order? If not, you should continute to give to the best charity, meanwhile giving nothing to the other charity.

Most people are in the position of not being able to give enough to change rankings.

But, then why do we give to multiple charities if this is actually helping people less? How about vanity? Giving to many causes makes us feel better, even though it harms the marginal recipients of the best charity who most need our help.

Matthew said...

Dr. Tufte said that one should continue to give to their top charity until that charity has enough that it becomes the second-best charity. I never had realized or thought of that. I think people give to multiple charities for vanity, like Dr. Tufte mentioned, but also because they want to be fair and help out as many charities as they can. Unfortunately, a few dollars spread out does little to help compared with a lot of money in one place, but if enough people did this, maybe it would add up.

Dr. Tufte said...

And ... we need to educate people to the costs of fairness.

Fairness is great but, no one says "I need to be fair, so I'll give to charity". They reverse those: the charity is primary and the fairness is secondary. People need to recognize that by focusing on fairness they are making their charity less useful.