The last post left off with the glow of my wife and I as givers; our sense of satisfaction, borne in the awareness of having done a good deed.   Let’s come clean:  this human sensation of good-doing pays my mortgage.  I suppose that’s old news.  The financial structure of the charity business places a primacy upon the organization’s relationship to the donor over its relationship to the beneficiary.  In terms of cash, the latter is perhaps a matter of image.  The former is a matter of existence.  The people (donors) who buy our product aren’t anywhere near the people who receive it, and that distance allows for a lot of bad aid (a well-beaten theme in this blog).

The money will flow so long as there’s a story or two, compelling photos, or a reality TV star so surprised to find poor people dying due to crap healthcare that he’s willing to sell his Ferrari and give the money to a hospital in Zanzibar.  As a business model, that’s pretty hard to beat.  Not sure, then, if I understand the stream of critics saying we NGOs need to learn from the private sector.  How many businesses have developed a model where cash comes in regardless of product quality?  Not Nike.  Not Apple.  Not Carnival Cruise lines.

The aid model is even trickier than just being able to sell an invisible product.  To begin with, there’s the religious push, imploring people to give in order to get to heaven.  Check out the Bible:  … and to remember the words of the Lord Jesus, how he said, It is more blessed to give than to receive (Acts 20:35).  Or Islam, which consecrates Zakat as one of its five holy pillars. But there’s more!  It turns out giving goes deeper than a trip to paradise, which is a good thing considering the ascendancy of hedonism.

It seems humans are hard-wired to give.  Researchers believe that giving has a positive health effect on the giver (hmmm … taken to the extreme:  donation to a medical charity may improve the donor’s health more than the beneficiary’s?).  As UCLA psychologist Naomi Eisenberger puts it: “Because of the importance of support-giving for the survival of our species, it is possible that over the course of our evolutionary history, support-giving may have become psychologically rewarding to ensure that this behavior persisted.”

Turns out money can’t buy happiness, but giving it away can.  As other research shows, regardless income level, those people who spend money on others report greater happiness, while those who spend more on themselves do not.   I guess that explains the glow.

But the charity model’s biggest strength is a tendency for givers to overestimate the value of their gift.  At the consumer level, Christmas turns out to be a black hole, devouring value:  a billion of spending on gifts produces about 800 million worth of value to the receivers.  That’s bad math.  Even worse math in aid terms, because a fat chunk of giving gets nowhere near the beneficiary.  There’s my mortgage, for example.

So does giving destroy value?  Well, yes and no.  It’s a lopsided equation because it focuses exclusively on value to the recipient.   We could look at it differently.   Here’s a quote from another researcher, Arthur C. Brooks, from Syracuse University:

What many organizations misunderstand is who the “needy” truly are. In addition to those in need of food, shelter, education, the needy are also those who need to give to attain their full potential in happiness, health, and material prosperity—which is every one of us.

Giving to a charity as the moral equivalent of retail therapy!  Surrounded by beneficiaries, we humanitarians give blankets and cooking oil to the wretched and in the process give contentedness and self-satisfaction to the blessed.  Hmmm again.

I wouldn’t focus on donors, though.  I would focus on me.  On the aid worker.  We’re not exactly donors, but we are professional givers (assistance, help, protection, healthcare, solidarity, training, etc.).  Problem 1:  we therefore overestimate the value of our gift.  No wonder so many aid workers believe in the goodness of their work as a matter of faith, not measurement.  Problem 2:  If we are hardwired to derive pleasure from our work (which is far more than job satisfaction), doesn’t that create a powerful self-interest in our interventions?  In our self-perpetuation.   Now that’s a great business model.