Month: March 2009

The recent surge in public attention to poverty and homelessness in America, which has been exasperated by the financial crisis, has exposed the social service industry for what it is: a stagnating industry with a lot of heart, but few good ideas. The issues we in the social service sector have dedicated our lives to have come to the forefront of the country’s collective consciousness. The public is looking to us to help struggling families. This should be our moment to shine.

Instead, we have squandered this opportunity, complaining we are light on solutions because we are light on funding. But lack of money is not the reason we have failed in the social service sector to make significant gains in solving social problems. I have no doubt that if we actually knew how to solve social problems, that the American public would give us the support we need.

The reason we don’t have the money we want is because we do not have a track record of success. We have failed to succeed so far because of a collective culture that is anti-competitive, and is deathly afraid that if we started rigorously evaluating the services we provide, that we would discover we aren’t really doing anything.
Therefore, it’s not surprising that as an industry we fail to produce good ideas, considering that we don’t really think.

Other industries use professional journals and online forums to exchange ideas, think critically about what works and what doesn’t, and encourage competition so the best innovations rise to the top, and others get thrashed and left behind, as they should. We in social services however, spend our time patting ourselves on the back, telling one another how great we are, and sharing articles about how there are too many poor people and not enough social services.

It’s time for us to get real. Not every idea is a good one, not every agency has a right to exist, and even if we “keep working together” that does not mean “it is going to get better.” We need a cultural revolution in the social service industry. We need to start taking ourselves as seriously as the problems we work on. So long as we hold back on critiquing ourselves, and one another, our industry will continue on its path to mediocrity.

President Obama has waged a war on charity. Well, at least that is what some who oppose a controversial portion of his 2010 budget proposal would have us believe. According to the LA Times

Under the president’s plan, itemized tax deductions for charitable giving and mortgages would be capped for those earning more than $250,000 a year. Changes would be phased in gradually over the next few years. So in 2010, instead of getting a 33% or 35% deduction for charitable donations, Americans in the top income brackets, according to a Wall Street Journal analysis, would get somewhere in the neighborhood of 28%.

The president proposes using the generated tax revenue to extend health benefits to the uninsured. The question of what impact, if any, a change in the write-off rate for the wealthy will have on charity is an interesting one, and not necessarily straightforward. In particular, two questions come to mind.

1. What percentage of total giving comes from households of greater than $250,000?
2. What causes do households of greater than $250,000 give to?

I ask the first question because even if the wealthy did give less, that doesn’t necessarily mean it would have a disruptive effect on charitable giving. The second question goes to the heart of the moral high-ground opponents of Obama’s proposal have taken. Implicit in their argument is that charitable giving helps the poor and less fortunate. If Obama decreases charitable giving, he hurts the disadvantaged. However, this is not necessarily the case as only a fraction of charitable giving is about social services, health, and education for people in need.

A 2007 report by The Center on Philanthropy at Indiana University and Google looked at how much, and to what types of charities, Americans give to by income bracket. The report

finds that less than one-third of the money individuals gave to nonprofits in 2005 was focused on the needs of the economically disadvantaged. Of the $250 billion in donations, less than $78 billion explicitly targeted those in need.

Furthermore, programs targeted directly at people in the poorest neighborhoods tend to be funded by government, not charitable, dollars, as evidenced by

…a more recent study of youth-serving organizations [where], Galaskiewicz et al. found that organizations in low-income neighborhoods had a high percentage of government funding and almost no philanthropic support

In total, the report finds only 9% of giving going to “Basic Needs,” with households under $200,000 a year donating about 13% of their charitable contributions toward basic needs, versus just about 6% for wealthy households. Wealthy households tend to give more to arts and private education, with donors making under $200,000 per year giving to basic needs and religious causes. So even if the wealthy give less because of the lower write-off rate (not a forgone conclusion mind-you) it would likely have more of an impact on arts and private education than basic needs and the poor.

The only fundamental need disproportionately funded by the wealthy is health, who collectively give more than donors making under $200,000 a year. So at worst the only ‘harm’ Obama’s plan could inflict on the needy is a deduction in charitable giving to health related causes. But even if wealthy donors give less to health causes, Obama plans to use the money raised by the reduction in the write-off rate to fund an expansion of health insurance benefits to the uninsured, meaning spending on health either has no net change or increases.

The characterization of Obama’s plan as “uncharitable” is flatly wrong. Expanding health benefits is necessary for our country, and his team found a funding stream toward that end. Since the wealthy give generously to health charities, it is obviously an issue that means a lot to them. Their interests as philanthropists are better served by an administration that joins them in their efforts to provide health care to all Americans.

While at Barnes and Nobel this evening, I picked up a book by sociologist Sudhir Venkatesh called Gang Leader for a Day: A Rogue Sociologist Takes to the Streets. The book chronicles Venaketsh’s experience researching a gang operated in a housing project in Chicago. Venkatesh has received a lot of attention for his work in large part because of his willingness to move outside of his social class, an academic delving into a drug dealing world of violence and poverty.

His book is testament to the power of moving outside of one’s class and highlighting the realities of poverty through first hand accounts. Venkatesh got me thinking about my own experience working in social services with low-income and homeless individuals and families. My experience as a service provider, volunteer, and agency executive has shaped my understanding of what works and what doesn’t in helping people lift themselves out of poverty.

I have not been a gang leader for a day, nor do I plan to be. But I have been a contributor to the social service sector for eight years, and have some stories worth recounting and insights worth sharing. I plan to do so in coming blog posts.