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Herb Rothschild Jr.: The role of charity

Deborah and I recently received an expensively produced fund appeal from the Wounded Warrior Project. It called to mind a subject that interests me: the roles and effectiveness of philanthropy.

I’ve long been involved in private giving, both as a donor and a fundraiser. I have no hesitation about being solicited or soliciting. It mystifies me that people who are bombarded with advertisements for material goods object to being offered opportunities to support public-spirited causes.

Regarding the effectiveness of philanthropy, the simplest question to ask of a “charity” is how much of its income goes to its programs. The percentage varies widely. Some charities are scams, with most of the money devoted to raising more money and paying the staff. But the percentage for above-board organizations ranges higher than many people may feel comfortable with.

In FY 2012, the Wounded Warrior Project spent 36 percent on fundraising and 6 percent on administration. Its CEO was paid $311,538 (by comparison, the head of the Department of Veterans Affairs gets about $200,000). In FY 2013 Peace House spent 26 percent on administration and 3 percent on fundraising. Both organizations fall within a reasonable range, although the Wounded Warrior Project presses the upper limit.

So the first point I want to make is that if charitable organizations perform functions that might be performed by public agencies, most charities are comparatively inefficient in generating funds. Tax collection costs something, but nowhere near a third of the total budget. While we feel better about making charitable donations than paying taxes, a lot more of our tax dollars get put to use.

What use, of course, raises a different question about effectiveness. I have far more control over the uses to which my philanthropic dollars are put than my taxes. I resent the very high percentage of the income tax that goes to war and preparation for war. Others may be OK with war spending but wish their taxes weren’t spent on programs I may like. So be it. When we’re all in it together, we don’t get to call the shots by ourselves.

I suspect, though, that we unanimously believe that we all are obligated to care for our veterans wounded in mind and body. We do that together through the VA. It was our government that sent them off to fight in places such as Vietnam and Iraq. And while many of us vigorously resisted those morally unconscionable and useless wars into which lying politicians took us, we are all responsible for the damage they did to our service members.

So it is outrageous that governmental failures require these misled but patriotic citizens to depend on charity for their care. There are roles for private philanthropy in our society, but this is not one of them.

In my opinion, here are the legitimate roles for private philanthropy: 1. Addressing needs that, for one reason or another, the public sector has neglected. 2. Trying new approaches to solving problems that the public sector is reluctant to adopt. In both these cases, the goal would be to get the public sector to take responsibility once the pioneering work has been done. 3. Advocacy for a change in public policies.

Obviously, this third function must be done outside the public sector, because the public sector is the problem. Most of my philanthropic dollars go to social change, not to social service, organizations. And the social change organizations I support the most are those that work to prevent war so that there will be no more “wounded warriors” to put back together.

Herb Rothschild Jr. is chairman of the board of Peace House.