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                                                                                ESSAY, Page 74

Charity Begins With Government


By Michael Kinsley


    William Aramony, president of United Way of America, was
getting $463,000 a year in pay and benefits. He flew on the
Concorde and spent $20,000 one year on limousines. A spin-off
organization bought an apartment for Aramony's use and hired his
son. Exposure of these abuses led to Aramony's sudden
retirement. The head of the New York-area United Way division
(pay: $341,000) also recently retired -- on a lump-sum pension
of $3.3 million.

    Philanthropoids worry that the scandals at America's
biggest charity will make Americans less generous. It would be
nice if, instead, this episode led Americans to reconsider the
virtues of another way to channel the generosity of the
comfortable majority to those in need: Big Government.

     Two Republican Presidents have emphasized private charity
as a substitute for the heavy hand of government in addressing
social needs. Reagan had his Private Sector Initiatives
program. Bush has his "thousand points of light" -- a throwaway
bit of imagery that has spawned a vast public relations
exercise.

     Bush chairs the Points of Light Foundation, which spurs
private and corporate giving. Something else called the White
House Office of National Service has put out (at taxpayer
expense) a ridiculous book called Selected Presidential
Statements on the Points of Light Initiative, in which 343 Bush
bromides are indexed by "theme" and "issue." "Service=Success:
Quotes #3, 11, 12, 19 . . . Meaning and Adventure: Quotes #33,
147, 153, 224 . . . The Young People of America Can Save Us:
Quotes #8, 39 . . . The Talent and Experience of Older Citizens:
Quotes #31, 114, 115 . . . Service Makes a Difference: Quotes
#83, 89, 95 . . ." And so on.

     Charity is wonderful, and Americans are wonderfully
generous ($122 billion in 1990). But in the hands of
politicians, charity can become an excuse for ignoring social
problems, not a method of addressing them. A Points of Light
Foundation brochure puts the challenge well: "While many
Americans prosper, another part of our country dwells on the
other side of hope. Illiteracy, drug abuse, teen pregnancy,
delinquency, homelessness, neglect, alienation . . ."

     So, O.K., take homelessness. Should a prosperous society
have people living in the streets? To the extent that money can
prevent this, does our society have an obligation to find and
spend the money? An ugly but honest response would be to say no;
it's good when individual people take pity on other people, but
society as a whole has no such obligation. It is not an honest
response to say society does have an obligation but it should
be handled privately. Adam Smith's theory of the invisible hand
explains how private greed gets channeled to socially productive
ends. But no one suggests that private for-profit business can
solve the homelessness problem. And there is no theory of an
invisible hand to guarantee that private charity will be
sufficient.

     Generosity via the government does require people to
contribute whether they wish to or not. "If you're so concerned
about Problem X," liberals are often taunted, "there is nothing
to stop you from writing a check." A single check, though, won't
solve the problem. Many people who don't give a quarter to a
homeless person because it seems futile would happily give a lot
more than that to live again (as we did barely a decade ago) in
a society where the sight of a blanket-wrapped beggar is
shocking. In a democracy, "government coercion" is a crude
misrepresentation of the process by which citizens make a
collective decision to achieve together what they cannot achieve
individually.

     In a sense, a charity like United Way has thrived by
reinventing the wheel. Most of its money comes from payroll
deductions, just as taxes do. It does not have the compulsion
of the law behind it, but it does have heavy pressure from
employers. And it appeals to the sentiment that together we can
do what we cannot do separately.

    The burgeoning field of corporate charity puts the notion
of government "compulsion" vs. private "voluntarism" in even
sharper perspective. The actual donors are the shareholders,
whose money is volunteered by the corporation's executives. The
shareholders can vote the executives out if they're being
overgenerous -- just as the citizens can vote the politicians
out. Shareholders can also sell their stock, which citizens
cannot. But in practical terms, corporate charity is under less
democratic control than government social welfare. And
corporations, unlike the government, then spend vast sums of
money bragging in advertisements about how generous they are.
Stockholders pay for that -- and so do taxpayers, since the cost
is deductible.

    The typical well-run charity spends 25 cents of each
dollar on fund raising and administration, 75 cents for good
works. These are not unreasonable amounts, but they compare
unfavorably to the cost of raising money through taxes and
delivering social services through the government. Although
Aramony's excesses were unusual in the world of charities, they
make the congressional check-kiting scandal look like small
beer. And even normal compensation for top charity executives
exceeds the pay of top government administrators. If you're
looking for a charity bargain, think Uncle Sam.

    It's a fine thing that our elected leaders have decided to
use the bully pulpit to encourage private charity. As a
taxpayer, I don't even mind seeing a few of my dollars going to
pay for the propaganda. The trouble is that these same elected
leaders have used the same bully pulpit to poison the minds of
citizens against the mechanism of selflessness and social
generosity that is at these leaders' actual disposal: the
government. A free society deciding to tax itself to make itself
a better society -- that's the real united way.