The Growth Effect

The argument

Charities can invest directly into communities. A study found that philanthropists give to charities that improve a community’s amenities such as a zoo, theater, the local football team, etc. Philanthropic efforts can also go towards city beautification. Such cultural amenities improve a specific location and provide the people with opportunities to get together. Giving to charities and other nonprofits, especially a local one, allows the giver to return money to the local economy and community, which benefits homeless people. Charities can invest directly into young people and entrepreneurs, promoting business growth, and providing jobs. Philanthropists can invest in college scholarships for young people or for programs that help under-resourced students receive a better K-12 education. Other charities focus on job-training. Charities can target donated funds and efforts to specific people, such as the homeless, giving them the tools and skills to become self-reliant and give back to their community. Philanthropic efforts, especially of those with more money, can inspire other philanthropists to donate as well. Not only does giving to charity increase the charity’s reach, but also being vocal about giving can inspire others to give as well, further increasing charity’s potential impact on helping homeless people or a community.

Context

Philanthropic efforts sometimes have a bad reputation of just giving rich people the opportunity to boast about their kindness. Still, charities and nonprofits employ 12.3 million people in the US. Nonprofits also create work opportunities for others more than the 12.3 million directly employed by nonprofits. The nonprofit sector can still drive economic growth.

Premises

Counter-arguments

Giving to charity does not guarantee that your money will go directly towards helping the homeless or improving your local community. By giving directly to a person in need, you eliminate the possibility of your money being used by a corrupt charity. You also eliminate the possibility of big-name charities receiving a surplus of money. Charities are tax-exempt, so charities can worsen social inequalities. Letting charities be tax-exempt reduces the revenue available for government social programs which are held more accountable than charities. Vocally giving to charity is a form of virtue signaling. Vocal giving (which many charities encourage to further their reach) shows others in your own social circle that you care for the homeless. Yet, you only do so to receive praise. While such action may benefit the homeless somehow, you are still treating people who are homeless with contempt, using them as a means to a selfish end: to boost your social standing.

Rejecting the premises

[Rejecting P1] Amenities are the weakest part of the case. A zoo, a theatre or a local football club improves a place for the people already able to use it, and philanthropic giving concentrates heavily in institutions of that kind. The premise slides from "benefits a community" to "benefits that community's homeless people" without an account of how the money reaches them, and fundraising and administration absorb a share before any of it moves. [Rejecting P2] The comparison is asserted rather than tested. Unconditional cash transfers have been studied extensively, and recipients generally spend on food, housing and transport rather than in the way the premise implies — while avoiding the eligibility conditions, referrals and delays that stand between a charity's funds and someone sleeping outside tonight. Scholarships and job-training also serve people already housed and enrolled, a different population from the one the conclusion is about. [Rejecting P3] If giving inspires giving through visibility, that is a claim about the giver's standing rather than the recipient's welfare, and it cuts toward the counter-argument's charge that publicised giving serves the donor. Nothing in the premise establishes that the further philanthropy generated is directed at homelessness rather than at the amenities the first premise describes.