Do you give to charity to help people or for other reasons?

Tim Harford wrote (in an old Slate article):

If people really were altruistic, there would be much less volunteering.

It would almost always be more effective to volunteer less, work overtime, and give more. A . . . banker can pay for a lot of soup-kitchen chefs and servers with a couple of hours' worth of his salary, but that wouldn't provide the same feel-good buzz as ladling out stew himself, would it?

In fact, the closer you look at charitable giving, the less charitable it appears to be. A recent experiment by John List, an economist at the University of Chicago, and a team of colleagues, showed that donations are less than magnanimous after all. Using controlled trials to compare different methods of door-to-door fund-raising, professor List's team discovered that it was much more effective to raise funds by selling lottery tickets than it was to raise funds by asking for money. This hardly suggests a world populated by altruists seeking to do the maximum good with their charitable cash. . . .

Even the way we choose to dole out cash betrays our true motives. Someone with $100 to give away and a world full of worthy causes should choose the worthiest and write the check. We don't. Instead, we give $5 for a LiveStrong bracelet, pledge $25 to Save the Children, another $25 to AIDS research, and so on. But $25 is not going to find a cure for AIDS. Either it's the best cause and deserves the entire $100, or it's not and some other cause does. The scattershot approach simply proves that we're more interested in feeling good than doing good.

For that last point, Harford credits Steven Lansburg, who elaborates on why the idea of "diversifying" doesn't make sense with charity the way it does in other areas:

When it comes to managing your personal portfolio, economists will tell you to diversify. When it comes to handling the rest of your life, we give you exactly the same advice. It's a bad idea to spend all your leisure time playing golf; you'll probably be happier if you occasionally watch movies or go sailing or talk to your children.

So why is charity different? Here's the reason: An investment in Microsoft can make a serious dent in the problem of adding some high-tech stocks to your portfolio; now it's time to move on to other investment goals. Two hours on the golf course makes a serious dent in the problem of getting some exercise; maybe it's time to see what else in life is worthy of attention. But no matter how much you give to CARE, you will never make a serious dent in the problem of starving children. The problem is just too big; behind every starving child is another equally deserving child.

That is not to say that charity is futile. If you save one starving child, you have done a wonderful thing, regardless of how many starving children remain. It is precisely because charity is so effective that we should think seriously about where to target it, and then stay focused once the target is chosen. . . .

If your charitable contributions are small relative to the size of the charities, and if you care only about the recipients (as opposed to caring, say, about how many accolades you receive), then you will bullet all your contributions on a single charity.

Tyler Cowen gives another reason to donate to relatively few different charities, though he avoids giving the extreme advice to donate to exactly one, in Discover Your Inner Economist (a great little book which I can't recommend highly enough):

Charities make most of their money off what is called a "house file." The house file consists of donors who have been giving loyally for years. A good house file . . . brings in much more than it costs to maintain. . . .

If a mailing brings in thirty cents for every dollar spent, that mailing probably went relatively well by the standards of the sector. A fifty-cent return per dollar spent is a smashing hit.

Why spend a dollar to get thirty or fifty cents? The answer is simple: the charity is investing in developing its house file. . . .

We now have a new way to make the world a better place. Once we have found some good charities, we should tell them not to rent out our name and address to other mailers. Virtually all charities rent out or swap names and addresses to similar groups; what better way is there to find new donors than to look for people who are already giving to related causes?

"Remove the name" requests save charities thousands of dollars on their mailing costs. (193-194)

A post on Less Wrong argued:

Imagine you are setting out on a dangerous expedition through the Arctic on a limited budget. The grizzled old prospector at the general store shakes his head sadly: you can't afford everything you need; you'll just have to purchase the bare essentials and hope you get lucky. But what is essential? Should you buy the warmest parka, if it means you can't afford a sleeping bag? Should you bring an extra week's food, just in case, even if it means going without a rifle? Or can you buy the rifle, leave the food, and hunt for your dinner?

And how about the field guide to Arctic flowers? You like flowers, and you'd hate to feel like you're failing to appreciate the harsh yet delicate environment around you. And a digital camera, of course - if you make it back alive, you'll have to put the Arctic expedition pics up on Facebook. . . .

[But] when your life is on the line, things like impressing your friends and buying organic pale in comparison. You have one goal - staying alive - and your only problem is how to distribute your resources to keep your chances as high as possible. These sorts of economics concepts are natural enough when faced with a journey through the freezing tundra.

But they are decidedly not natural when facing a decision about charitable giving. Most donors say they want to "help people". If that's true, they should try to distribute their resources to help people as much as possible. Most people don't. In the "Buy A Brushstroke" campaign, eleven thousand British donors gave a total of £550,000 [about $850,000] to keep the famous painting "Blue Rigi" in a UK museum. If they had given that £550,000 to buy better sanitation systems in African villages instead, the latest statistics suggest it would have saved the lives of about one thousand two hundred people from disease. Each individual $50 donation could have given a year of normal life back to a Third Worlder afflicted with a disabling condition like blindness or limb deformity.

Most of those 11,000 donors genuinely wanted to help people by preserving access to the original canvas of a beautiful painting. And most of those 11,000 donors, if you asked, would say that a thousand people's lives are more important than a beautiful painting, original or no. But these people didn't have the proper mental habits to realize that was the choice before them, and so a beautiful painting remains in a British museum and somewhere in the Third World a thousand people are dead.

Last year, David Sedaris wrote about how he was able to get people to donate extra money to him, beyond just paying for his books, even when he was already a fabulously successful author (via):

A couple of books ago, I put a tip jar on my signing table and I made over $4,000 on my tour. The problem was then I started hating people who didn’t tip me. I didn’t say anything to them, but I would just sit there thinking, “You cheap son of a bitch. I just signed four books and you can’t even give me a dollar?” And why should they? But I just got so involved in it. I had to stop doing it.

I told people it was all for me to spend on candy. They were delighted because it’s funny to give money to someone who doesn’t need it. If there had been a beggar outside the bookstore, at the end of the evening, he might have had 75 cents where as at the end of my best evening in Dallas–[I had] $530 in tips.

When thinking about immigration, remember the migrants.

So says economist Tim Harford. The whole post is worth reading, but the take-away point is:

A recent survey by the economist Michael Clemens, of the Center for Global Development, points out that although the question is largely ignored, any reasonable estimate of the economic gains from freer migration would dwarf that of the gains from, say, freer trade – if we include the welfare of the migrants themselves.

This paper by Clemens argues that by placing "tightly binding constraints on emigration from poor countries," we're walking by "trillion-dollar bills on the sidewalk." He sums up the paper in this article in the Guardian, saying:

The reason migration packs such economic punch is both simple and mysterious: a worker's economic productivity depends much more on location than skill. A taxi driver in Ethiopia's capital, no matter how talented and industrious, cannot earn more than a few thousand dollars a year. The same person doing the same job in New York City can easily earn $35,000 a year. The reason people will pay him that much is that his driving adds more than $35,000 of value to the New York economy, more value than his actions can add to the Ethiopian economy.

The Political Compass ideology quiz

You can take the quiz here to find out where they place you on economic and social issues.

Based on my scores, I seem to be a moderate libertarian.

Libertarianism is often seen as an extreme ideology, so is "moderate libertarian" an oxymoron? Not according to Tyler Cowen. Writing in 2007, he said that libertarian policies have increased America's economic growth, but added:

The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats.

I am not so worried about this paradox of libertarianism. Overall libertarians should embrace these developments. We should embrace a world with growing wealth, growing positive liberty, and yes, growing government. We don’t have to favor the growth in government per se, but we do need to recognize that sometimes it is a package deal.

In short, libertarianism has the seeds of its own destruction.

As with all these kinds of quizzes, I take issue with the premise of some of the questions. The first one is whether you agree with this statement:

If economic globalisation is inevitable, it should primarily serve humanity rather than the interests of trans-national corporations.

This seems designed to prompt you to think in zero-sum terms about benefitting either "trans-national corporations" or "humanity." I wish there had been an option that would have allowed me to take the position that globalization should benefit both trans-national corporations and humanity at the same time. But the quiz nudges you toward answering that "humanity" should take precedence over "corporations." (The quiz writers should read the section in chapter 1 of Thomas Sowell's Economic Facts and Fallacies about the "zero-sum fallacy" and the chapter on free trade in Tim Harford's The Undercover Economist.)

Also, the quiz results are supposedly about your political views, but several of the social questions don't refer to any role of government. For instance, you could believe that discipline is the most important value to instill in children, and that society has gone too far in allowing people to express sexuality in public (which the quiz would count as "authoritarian" positions), while taking a libertarian position that government should stay out of these issues. You can have a moral objection to the painted nude woman in Times Square the other day without thinking the police should have arrested her. The quiz is supposed to test whether you do have authoritarian political views, but the quiz seems to make an authoritarian assumption that you'll want the government to enforce your morals.