Charity Poor Substitute For Justice
Imagine you have an extra $10,000 this holiday season, with only two choices about how to spend it. You could buy a $10,000 gold pen from Neiman Marcus. Or donate it to a scholarship fund for low-income students. What would you do?
Now imagine you have an extra $35,300. You could buy that 15-piece set of lambskin leather luggage listed in the Robb Report’s Annual Ultimate Gift Guide. Or donate it to a nonprofit organization building housing for homeless families. What would you do?
Of course, the typical American household doesn’t have an extra $35,300. That’s nearly their entire income for the year. And most households have liquid assets of less than $10,000, the price of that pen.
During the holidays, our nation’s growing inequality comes into sharp focus.
We’re hearing a lot about wealthy shoppers splurging at upscale stores like Neiman Marcus - and families turning to food pantries and homeless shelters. At Neiman Marcus you can buy a $1,500 designer “Raj doll” replicating a “street urchin.” It also sells an $850,000 belt for those who don’t have to tighten them.
In their annual survey of hunger and homelessness in 29 cities, the U.S. Conference of Mayors found that demand for food assistance rose by 16 percent. One out of five people seeking food was turned away. The demand for shelter by families rose by 5 percent. Families with children now account for more than one-third of the homeless. Nine out of 10 cities regularly turn away homeless families because of inadequate resources.
What’s the No. 1 factor in the rising need for food and shelter? Low-paying jobs. The mayors expect the situation to worsen across the country as more impoverished families are denied welfare.
But on Wall Street it’s the season of raking in bonuses. The New York Times reports, “The common wisdom on Wall Street is that more than 1,000 people in the business will get bonuses of more than $1 million this year.”
An income of $1 million a year puts you in about the top one-fifteenth of the uppermost 1 percent of households. According to the Center on Budget and Policy Priorities, the income - after federal taxes - of the bottom 20 percent of families fell 16 percent during 1977-94. In the same time period, the top 20 percent gained 25 percent and the top 1 percent’s income jumped 72 percent.
Between 1992 and 1995, the wealthiest 500,000 American households gained $1.6 trillion in assets. Christian Science Monitor reporter David Francis observes: “These super-prosperous families pocketed enough new wealth to write a check for the entire U.S. budget deficit and still cover the annual economic output of Italy … and then buy any company traded on the New York Stock Exchange - General Electric, for example.”
But don’t the well-off give a lot back in charitable donations? Not proportionately. Households with incomes of $100,000 and over give about 3.4 percent on average to charity, while those with incomes under $10,000 give 4.3 percent. And upper-income households reap tax breaks for their donations - which mostly go to the nonprofit institutions that serve them disproportionately, such as elite cultural institutions and universities.
Organizations helping low-income people are being overwhelmed with demand, not donations. Adjusting for inflation, more money went to human-service charities a decade ago.
So, if you’re lucky enough to be wondering about what to get the person who “has everything,” here’s a simple suggestion: Give something in their name to an organization helping people who don’t have enough.
But charity alone isn’t sufficient. The Rev. Fred Kammer of Catholic Charities, the nation’s second largest charitable organization, says: “Charity is not a substitute for justice. Government has a responsibility to confront persistent poverty and to support needy families.”
In cutting back programs for the poor and cutting taxes for the wealthy, the government has it backward.
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