Which is more economically efficient, philanthropic efforts focused on non-government related causes or philanthropic efforts focused on government programs? In a New York Times article, entitled “Policy-Making Billionaires”, the topic of philanthropic economic efficiency is discussed. The article claims that philanthropic dollars which are used outside of the government system can produce results faster and better than dollars spent in government programs. Yet the article also states that philanthropic efforts which are not channeled through government programs cannot make an impact on a large enough scale to truly achieve social change.
Our book states that an allocation of resources is economically efficient if no other reallocation of resources can make one person better off without making another person worse off. So the question remains as to which philanthropy option is the most economically efficient. The use of philanthropic dollars in non-government projects is more cost effective and produces results quicker. However, directing the funds through government channels helps more people and can create change on a broader scale. I have always been taught that governments are run inefficiently, but if a larger scale change can take place through that channel maybe it is more economically efficient and I should support it.