Chicago Booth Review Podcast What’s Wrong with Charity?

Hal Weitzman: In the Victorian era, it was common to distinguish between the “deserving” poor—the elderly, orphans, and the disabled—and the undeserving poor, the able-bodied who could work and who were given enough relief to survive, but at a low level so as to encourage them to get jobs.

While the language has changed, the distinction remains. For some people, you don’t help the poor by giving them money, but by giving them opportunities to earn money. This is behind the periodic campaigns to limit welfare benefits in order to encourage work. But is a handout necessarily different from a hand-up?

Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking academic research in a clear and straightforward way. I’m Hal Weitzman, and in this episode we’re sharing insights from John Paul Rollert, an adjunct associate professor at Chicago Booth and our In-House Ethicist. In this essay from 2017, Rollert reflected on how we think about helping the poor and about charitable giving in general. It’s read for us by the author.

John Paul Rollert: “What’s the Matter with Handouts?,” an essay by John Paul Rollert. Read by the author.

The topic of redistributing wealth has a tendency to short-circuit dates, spoil Thanksgiving dinners, and occasionally sever friendships—unless the redistribution in question is charitable giving. When the haves give freely to the have-nots, most people see it as an example of enlightened self-interest and therefore a cause for celebration, not complaint.

Still, not all benefactions are created equal, and, for many, the least among them may be giving money directly to the poor. Indeed, handouts have fallen into such disrepute that Pope Francis himself felt the need to defend them. “Help is always right,” he told a Milanese street magazine, Scarp de’ tenis, in February. But what if I give a beggar a few bucks, and he spends it on a glass of wine? “If a glass of wine is the only happiness he has in life,” the pontiff mused, “that is fine.”

Throughout the interview, Francis seems less concerned about vindicating a particular kind of gift than vitiating the reticence to give, but as a counter to conventional wisdom about charitable giving, his reply is remarkable nonetheless. Maintaining a scrupulous inhibition about handing out money to panhandlers isn’t the exclusive domain of prigs and penny-pinchers. Even my father, whose politics and leonine hairline can occasionally make him seem like a Catholic Che Guevara, discouraged my sisters and me from dispensing spare change on the street corner for precisely the wine-related reason Francis dismisses. Such gifts were liable to do more harm than good, he told us, and we were better advised to fill the collection plate or favor some charity.

The notion that handouts could be counterproductive to charitable ends is hardly a peculiar opinion today, but the logic supporting it has a fairly recent vintage. In the West, until just a few hundred years ago, helping the less fortunate was a fairly straightforward process. Consider how the King James Bible describes evidence of the “blessed”:

For I was an hungred, and ye gave me meat: I was thirsty, and ye gave me drink: I was a stranger, and ye took me in: Naked, and ye clothed me: I was sick, and ye visited me: I was in prison, and ye came unto me.

Beyond the comforts afforded by human contact, the help that might be provided the “least” among us is almsgiving, offering money or other aid directly to the poor. Such assistance is the most ancient of philanthropic exercises. That it is no longer the most venerable as well says a lot about how the ethics of charity have changed over time.

Cotton Mather’s view of charity

This evolution was anticipated by Cotton Mather, the Puritan minister of colonial Boston who articulated an approach to charity that was so unorthodox in spirit as to seem slightly heretical. Reflecting on what prevented us from undertaking charitable endeavors, Mather regarded a failure of will as the chief impediment. The tendency to be idle, even in the face of great need, was “the most concealed, and yet the most violent of all our passions,” Mather wrote in Bonifacius, or Essays to Do Good. Such “baneful Thoughts” needed to “be chased out of our Minds” to make room for the “Subject, ‘What Good may I do?’”

The concern that laziness might undermine our charitable instincts is largely unobjectionable, but Mather made the more radical and contentious move to apply the same logic to charitable acts themselves. Benefactors should always keep an eye on the “spiritual interests” of the intended recipients, he advised, and “[i]f there be any idle persons among them, endeavor to cure them of their idleness: do not nourish and harden them in it, but find employment for them” and “then be otherwise as bountiful to them as you please.”

Pursuing a “cure” for idleness is a tricky business, particularly when the Bible rules out the threat of starvation or death by exposure. The effort also raises delicate questions about who constitutes the worthy poor, a novel denomination and one that seemed a tad insidious to many of Mather’s peers. Given his enthusiasm for the Salem witch trials, an extracurricular commitment that cost him the presidency of Harvard, Mather’s moral compass was already regarded as slightly unreliable by members of the Massachusetts Bay Colony, and he chafed at what he called the “reproaches of those soft-hearted or warm-blooded philanthropists” who “applaud as the only true lovers of their species” people who are “equally unthinking and indiscriminate in almsdeeds.” They “stigmatise us” as “enemies of the poor,” he said, because we “sometimes withhold” alms from the indigent, hoping to have the effect of “quickening their own industry.”

Ben Franklin weighs in

That the withholding of charity might itself be a charitable act proved an unlikely but enduring contribution to philanthropic theory, yet it wasn’t the only legacy of Mather’s Essays to Do Good. In his autobiography, Benjamin Franklin highlighted the influence of Mather’s book, together with Daniel Defoe’s An Essay upon Projects, for championing the support of significant public initiatives that improved the moral and social welfare of a community. “[W]hat is done for Schools, and for Colleges, and for Hospitals, is done for the general good,” Mather had written. “The endowment or maintenance of these is at once to do good unto many.”

As Franklin made his way from penniless apprentice to the most famous man in America, he took great pride in cultivating what he called the “projecting public spirit” that saw him lend his intellectual, organizational, and financial assistance to a host of programs in and around his adopted city of Philadelphia. Franklin chronicled these efforts at length in his autobiography—everything from the formation of what would become the University of Pennsylvania, to the establishment of the city’s first lending library and public hospital, to the organization of a subscription program to employ street sweepers. “Some may think these trifling Matters not worth minding or relating,” he writes, acknowledging that he’s testing the patience of his readers. And yet, he continues, “Human Felicity is produc’d not so much by great Pieces of good Fortune that seldom happen, as by little Advantages that occur every Day.”

The implied lesson was that the good person did not wait around for grand opportunities to make his philanthropic mark. He seized every chance, large and small, to improve his community, showing himself less concerned about bragging rights than common benefit.

Franklin’s life and work make it clear why he and Mather are credited with helping to inspire the volunteeristic spirit that so decidedly shaped the colonial experience, and yet “the First American” (as Franklin was nicknamed) went far beyond his illustrious forerunner by omitting the ameliorative role of almsgiving from his charitable regimen. Whenever he discusses doing good, Franklin’s focus is always organizational in nature, his philanthropy programmatic. He didn’t emphasize the necessitous individual, but the needs of what one admirer called “a rising people.”

These two sets of commitments are certainly not at odds. They aren’t even inconsistent. One can endow soup kitchens and philosophical societies without any cognitive dissonance. But like Mather before him, Franklin viewed traditional almsgiving with skepticism, worried that efforts to remedy the immediate pangs of poverty might interfere with the “cure” for idleness. Franklin’s solution was a variation on his lesson of “Human Felicity” and the “little Advantages” that support it. “If you teach a poor young man to shave himself and keep his Razor in order,” he wrote, “you may contribute more to the Happiness of his Life than in giving him 1000 Guineas. The Money may be soon spent, the Regret only remaining of having foolishly consum’d it.”

Andrew Carnegie’s tougher stance

As much as anyone else in the early American experience, Franklin shifted the organizing logic of charitable activities from “help” to “self-help.” At the same time, he contributed to the growing suspicion that a handout and a hand-up were mutually exclusive. The philanthropically inclined had to choose, and Andrew Carnegie, nearly a century later, had no difficulty making his decision.

“It were better for mankind that the millions of the rich were thrown into the sea than so spent as to encourage the slothful, the drunken, the unworthy,” the steel magnate wrote. “Of every thousand dollars spent in so-called charity to-day, it is probable that $950 is unwisely spent; so spent, indeed, as to produce the very evils which it proposes to mitigate or cure.”

Carnegie’s broadside against “indiscriminate charity” came in “The Gospel of Wealth,” an 1889 essay in which he addressed the precarious social conditions his own success had helped exacerbate. Describing the “concentration of business” in “the hands of the few” as a hallmark of advanced capitalism, Carnegie admitted that this development had fostered antagonism and mutual distrust. “The problem of our age is the proper administration of wealth,” he wrote, “so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship.”

Among other things, such an assertion assumes that free markets won’t mend this relationship, and that the redistribution of wealth is necessary. Searching for a solution that would preserve individual prerogative, Carnegie took his cue from Franklin’s “projecting public spirit,” widening its scope to accommodate the philanthropic abilities of the wealthiest men in America. To them, Carnegie extolled “benefactions from which the masses of their fellows will derive lasting advantage,” a universe of charitable largesse that included the endowment of colleges, libraries, and concert halls, “the ladders upon which the aspiring can rise.” At the same time, he did not so much eschew as shunt aside the traditional form of charitable assistance. “Neither the individual nor the race is improved by alms-giving,” Carnegie maintained. “Those worthy of assistance, except in rare cases, seldom require assistance.”

As such declarations attest, the ultimate aim of philanthropy, in Carnegie’s view, was not to assist the poor by binding up their wounds and offering some small measure of human comfort. It was to grease the gears of meritocracy and make ample room among the elite for the “really valuable men of the race.” As Carnegie interpreted his own life, such efforts had been made on his behalf. He arrived in America when he was only 12 years old and immediately went to work in a Pittsburgh cotton factory for $1.20 a week. Having almost no formal education, he forever regarded as his first patron Colonel James Anderson, a local gentleman who made his personal library available to “working boys” on the weekends. “Only he who has longed as I did for Saturdays to come can understand what Colonel Anderson did for me and the boys of Allegheny,” Carnegie later said. “Is it any wonder that I resolved if ever surplus wealth came to me, I would use it imitating my benefactor?”

It is a wonderful sentiment but worthy of the disclaimer that not everyone can imitate Andrew Carnegie, certainly not in all of the ways that made him one of the most remarkable men of his era. Carnegie understood this. You cannot be the unapologetic social Darwinist he was unless you acknowledge that the strong and weak will inevitably be among us. The aim of his philanthropic “Gospel” was simply to ensure that this distinction was not synonymous with the rich and the poor—that, unlike the aristocratic realm he left behind in Scotland, merit, rather than inherited money, made all the difference in who succeeded.

Lessons for modern philanthropy

But what should be done for those who fail? For the meritocrat with charitable intentions, this is a thornier matter. Consider the boot-strapping maxim, “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” Like most platitudes, this one is comforting but also incomplete. You can’t teach someone to fish who doesn’t already have a fishing pole, and if you go ahead and hand out 10 poles to 10 men, for every one who lands a leviathan, another will lose his pole, one will break it, and three will still come home empty-handed.

What to make of these misadventures, to say nothing of the man who sleeps in and doesn’t fish at all, is not a problem for the older vision of charity, which simply demands evidence of need. But the disposition toward the poor that was anticipated by Mather and Franklin and acclaimed by Carnegie is more ambivalent. At its best, it indulges the temptation to look upon the less capable with a spirit of benign paternalism—a tendency that can manifest itself in a reticence to offer alms but also, in what might seem like a worthier form of redistribution, to pay the poorest workers higher wages. (Carnegie himself issued the unctuous warning that if great wealth were “distributed in small sums” to laborers, it would largely be “wasted in the indulgence of appetite.”) At worst, however, this spirit of contemporary charity favors a tone that can seem almost pitiless, at times, exchanging the sentiment “there but for the grace of God” in the face of the poor for a healthy, even righteous, disdain of failure.

Pope Francis seemed to have this sentiment in mind in his February interview. “It is possible to see a homeless person and look at him as a person, or as if he were a dog,” he said. For those in need, a helping hand, in any form, is preferable to a tight fist, but the deed loses something of its luster if, instead of a gesture of solidarity and warm encouragement, it more closely resembles the way we redistribute scraps to dogs under the dinner table.

Hal Weitzman: That’s it for this episode. To learn more, visit our website at chicagobooth.edu/review. When you’re there, sign up for our weekly newsletter so you never miss the latest in business-focused academic research. This episode was produced by Josh Stunkel. If you enjoyed it, please subscribe and please do leave us a 5-star review. Until next time, I’m Hal Weitzman. Thanks for listening to the Chicago Booth Review Podcast.