A Very Interesting Freakanomics Article On Philanthropy

First, they confused charity with commerce: that is, they uncritically applied the language of outcome-oriented investment to efforts to change human behavior in social settings. Humans, alas, don’t operate neatly according to market logic, though incentives can shift behavior.

Second, donors seem reluctant to talk about their own self interest. Instead of admitting their personal desires, they speak of selfless charity. Of course, donors can do whatever they want with their money, but this attitude doesn’t help them grow.

The three donors asked for my help in crafting a strategy for alleviating urban poverty. I agreed to work with them for one year, but with conditions. Most important, they had to arrive at a “loss figure” — a sum of money that they would give away (to actual causes), but which would be entirely devoted to their own learning.


1 comment

  1. Very interesting article. It really points out how much more philanthropy is than just money. Unfortunately, money can’t buy the things people really need like self-esteem, motivation and hope, but it does point out that sometimes the tiny amounts of money that donors think doesn’t matter can make the difference between falling into a cycle of debt and staying afloat. In my mind, any effective form of philanthropy demands some combination of financial support and moral support, even if that comes in the form of tough love-telling recipients that success will take more than just money, it will also take their hard work and commitment.

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