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Government Created the Charity Gap
This was run on Friday, April 13 in the Wall Street Journal

Editor, The Wall Street Journal

Dear Editor:

Sheryl Sandburg puzzles why such a small percentage of charitable giving is ultimately directed at the poor, despite people’s stated intentions to do so (“ The Charity Gap ”, April 4, 2007). Her ommission of government as a possible contributing factor is astonishing.

Today, government spending on means-tested programs exceeds half a trillion dollars, representing more than $12,500 for every person estimated to be in poverty in the United States . This spending (and the taxes imposed to fund it) does not occur in a vacuum – the behavioral responses of both donors and the organizations which they fund cannot be overlooked.

An enormous body of economic research has demonstrated that government charitable activity partially crowds-out private giving. Additionally, a 2003 paper by Professor’s James Andreoni and Abigail Payne found evidence that “government grants to nonprofits are causing significant reductions in (private) fundraising effort (by the nonprofits).” Finally, Professor David Beito and others have meticulously demonstrated how voluntary fraternal organizations have yielded to paternalistic government dependency as the welfare state has expanded into an enormous impersonal bureaucracy.

Getting government out of the charity business would be a good first step toward reducing the gap.

Sincerely,

Michael Rizzo

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