Three unconnected stories in the Times newspaper recently illustrated perfectly what is wrong with modern charity. I present these cases as a sort of 3-in-1 blog.

(1) Gordon Hood

What is the purpose of government? To my libertarian mind the function of government is, put crudely, to protect the fundamental rights of its citizens (using rights in the sense outlined many times before in this blog). The purpose of government is not to take money from some of its citizens to prop up the lives of others. And yet our omnibenevolent chancellor Mr. Gordon Brown has gone even further than the typical socialist notion of redistribution of wealth within the nation. He has recently pledged a massive £8 billion of British taxpayers money over 10 years to Africa. Now, it’s not a bad thing to be nice to poor Africans, and I happen to sponsor a young African boy myself, but to do it with other people’s money – forcibly taken – in an effort to make oneself look compassionate is just a little bit sick.

If Gordy and his socialist buddies wish to support Africa’s poor then perhaps they should contemplate doing it with their own dosh rather than spending everyone else’s doubloons. You don’t even have to be a libertarian to see how disgusting this policy is. Even centrists and many left-of-centre should baulk at the sum of money being given away – a sum which could wipe out the debt of the National Health Service, kill poverty and homelessness in Britain and fund all manner of so-called “goods” and “public services” that might conceivably have a prima facie claim to benefiting some of the citizens on the nation. Gordon Brown wasn’t elected by Africans. He was elected by Britons, many of whom thought, however naively, that he might concentrate all his efforts on improving the lot of the citizens that actually voted for him. It simply isn’t his job to try to save the world. His job is to be Chancellor of the Exchequer to the benefit of the country that elected him.

It’s quite likely that Gordy is attempting to challenge the popular image most of us have of him as a rather dour and distant chap; strenuously trying to remodel himself as a man of compassion and warmth – except his compassion is neither genuine nor believable. A man generous with the money of other people is not compassionate. He’s a swindler and a charlatan.

Moreover, to throw money at wasteful, incompetent and morally corrupt administrations is grossly irresponsible. Why don’t Gordy & pals spend a bit more time speaking out about poor government in Africa if they really must stick their interfering noses in at all? The same problem plagued the Make Poverty History Campaign. It’s aims were:

(1) More and better aid (despite the fact that in some areas there was such a flood of aid in the form of cheap or free goods that local businesses – the very things that are essential in improving the lot of any impoverished area – were under serious threat because they couldn’t compete with the charities).

(2) Fair trade (despite the fact that is highly questionable whether its market distorting tendencies are of long term benefit and the fact that practices such a trade tariffs can be counter-productive in leading to low-return activities and low production).

(3) Debt cancellation (despite the fact that such a policy punishes those few governments that are financially responsible and working hard to pay off their debts, while rewarding those governments who don’t give a toss about financial propriety).

Why wasn’t putting pressure on bad, no – abominable – administrations on the table?

One of the countries Gordy has been particularly interested in is Mozambique – a corrupt state with a fairly horrendous human rights record. In fact, Prof Joseph Hanlon, an expert on Mozambique, goes so far as to say that corruption in Mozambique grew in proportion to the amount of aid western governments gave to it. He points out that aid creates dependency, discourages entrepreneurship, and often fails to go where western governments would like. Of course, our governments never like to admit that they have pissed taxpayers money up the wall so they report the success stories while neglecting to mention the endemic corruption. If common sense alone wasn’t enough to tell us that pumping money into corrupt states makes things worse then history should convince us. After aid received from the Live Aid efforts in 1985 Ethiopia engaged in a futile and destructive war. Way to go Bob Geldolf.

In my humble opinion Gordon Brown is a terrible Chancellor and I think he’d be better off focusing on his duty to the British people than roaming off to Africa to hug cute black children.

(2) When Charities Get It Terribly Wrong

In the wake of the Asian Tsunami we were bombarded by all manner of charities to give-give-give to help. So much money was raised that charities couldn’t spend it fast enough and the amount of unspent money built up so much that some charities started giving it away to other causes elsewhere because they couldn’t properly manage it.

So in haste were the charities that it was recently revealed that many have made spending fuck-ups of gigantic proportions. Millions of pounds have been lost because of corruption and bad management. Save the Children and Oxfam are two charities to be ripped off, losing tens of thousands of pounds, with their rebuilding efforts severely frustrated. What happened? They fell prey to unscrupulous building contractors who took their money and built the most inadequate and flimsy buildings imaginable that would have trouble holding up under a mild storm. Indonesian anti-corruption campaigners have assembled a dossier of fraud and malpractice and “calculate that 30% to 40% of all the aid funds … have been tainted.”

Of course, the charities will portray themselves as innocent victims, but they are wholly responsible for the money they have lost. They have failed to be scrupulous in their management of these projects and if someone has screwed them over then it’s purely because the charities representatives and managers failed to stick to the building partners like shit to a blanket in order to properly oversee what was going on. Save the Children built some 741 buildings, issuing contracts worth over £400,000. The contractors, most of whom were controlled by a few people related to each other, failed to lay proper foundations and had a penchant for substandard timber. Save the Children were recommended to flatten all 741 structures. Jasmine Whitbread, Chief Executive of the charity, said: “During routine evaluation and monitoring we discovered the poor workmanship and took steps to rectify the situation … we will tolerate nothing less than the most efficient and effective use of money.” Really? Your routine evaluation and monitoring only discovered problems after all 741 buildings were discovered to be dodgy beyond repair?

There has been a catalogue of errors – major and minor. One aid agency built houses only to find their own staff in occupation of them, others have discovered other kinds of internal corruption – typically theft of resources. Many charities are also misspending money – one in particular paying thousands of pounds over the market price for a fleet of fishing boats they could have got cheaper had they done some research and negotiation.

Charities may not like my saying it, but there isn’t quite the motivation to financial propriety when you’re spending other people’s money that you got quite cheaply. Come easy go easy, but there’s always more where it came from, eh? Lets have some freshly brewed coffee and donuts.

(3) When Capitalists Do Charity

It is widely assumed by socialists and other left-leaning slaves to fuckwittery that capitalists are motivated purely by financial greed and thus cannot be trusted to engage in philanthropy. The truth of the matter is that most of the greatest champions of philanthropy are capitalists, because capitalists are not motivated simply by financial greed. It might surprise some people to hear that capitalists don’t judge value purely in economic terms. Even if something has no financial rewards we will find capitalists investing their money for a whole host of other reasons. Many do it for leisure, others out of a sense of duty, some to make themselves feel good, and a few purely for kudos.

Meet Philip Richards. Richards earns £8 million a year on average, and normally manages to give half of his salary away to charitable projects. Why? It’s not down to altruism. Nor is it for some financial return. Richards is a Christian and believes that he is fulfilling his duty to God by making money and giving money away. He says, “God is creative and, if you are a Christian, you should want to be creative … Business is creative. It creates wealth, [and] all of the things society needs to live on.” While serving a term in Germany as a soldier during the Cold War he became convinced that it was capitalism and not socialism that was a force for good: “I remember thinking that the Soviet Union had got it all wrong. The politics of socialism was the politics of envy and stinginess. It said ‘Lets all be as thoroughly nasty and mean to everyone … then nobody will gain and somehow the people at the bottom will be better off.’ Of course, that never happened. I felt I was fighting evil.”

The 2006 Sunday Times Rich List is about to be published and will show just how much is being given to charitable causes by the super-rich. There is an important feature to be noted about this massive increase in philanthropy. These capitalists are no longer content with being seen to give some cash away to any given charity. They want results. For instance, Ann Gloag has pledged £4 million towards converting a ferry into a floating hospital to sail around Africa providing aid. She writes: “My previous experience of building hospitals in Africa had been that you take in 5000 blankets and 3 weeks later there are none … This way [her boat] you know you stuff’s not going to be stolen. You know exactly where your money is going.” In a similar vein, Peter Harrison set up a foundation worth £31 million to aid education and disability projects. He doesn‘t just give money away, “I want a bang for my buck. I have taken all the skills I used in the business world and applied them to the foundation to make sure the money is not wasted. We scrutinise accounts, have a rigorous interview process and only fund things we think are realistic.

Such approaches to charitable giving are a million miles away from shitting £400,000 down the crapper on a building project as a result of shockingly bad project management, poor research and financial impropriety. Perhaps the big brand charities should take note.

The first story illustrates just what happens when well-meaning but utterly naïve, and deluded, bureaucrats have carte blanche to spend other people’s money that was not freely given. The money should not be taken in the first place, and even then it is spent not so much to help and get a good return, but to make the bureaucrats look and feel good. Governments will throw money at any project that might yield enough success stories for it to televise at the next election, regardless of problems and corruption it often causes. The second story portrays the situation in which people are spending other people’s money despite the money having been contributed voluntarily, one in which an increase in the amount of money available to spend tends to lead to an increase in financial laxity. The third story shows the result of people being responsible for spending their own money. Considering the intellectual rigour and moral superiority of capitalism and the utter bankruptcy of economic alternatives, should we really be surprised at these stories?

Stephen Graham B.Th (Hons)