Kosei Books
Dharma World Magazine homeCurrent Issueback issues of Dharma World MagazineSubscribe to Dharma World MagazineKosei Publishing Co.Kosei BooksRissho Kosei-kai English web site
 
Dharma World Buddhist magazine

The "Economics of Giving": An Interface of Varying Perspectives

by Lilian J. Sison and Jaime M. Jimenez

 
 

"Giving" is perhaps the expression that exemplifies social accountability and responsibility to other people regardless of their political, social, economic, and cultural background. The act of giving, however, is governed by varying motives, driven by myriad factors, and shaped by different realities.

A number of dualities could be observed if giving is analyzed through sociopolitical and political-economic lenses. First, giving to charity could be explained by the "nature of benefits individuals receive when they give to charity." On the one hand, "donors may focus on the well-being of charity recipients. In this case, the benefits from giving have a public nature." On the other hand, "donors may focus on the enjoyment they receive from the act of giving itself--that is the internal feeling they derive from 'doing their share' or 'giving back to society.' In this case, the benefits from giving have a private nature."1

The duality between the public benefits view and the private benefits view raises the political-economic issue of "crowding out--that government grants to charities will completely crowd out private contributions." However, "empirical studies have found only limited crowding out, suggesting that most donors are not solely concerned with the charities' accomplishments, regardless of the source of contributions; instead, private motivations, such as the joy of giving or recognition, play an important role in their giving decisions."2

Second, giving could be examined using the gift paradigm and exchange paradigm of Genevieve Vaughan.3 As we live in a commoditized world, the exchange paradigm dominates the act of giving, relegating it as a "profit-oriented" and "ego-oriented" activity. As critically analyzed by Vaughan:

Exchange is self-reflecting. . . . In exchange, the satisfaction of the need of the other is only a means of the satisfaction of one's own need. When everyone is doing this, the communication that occurs is altered and only succeeds in creating a group of isolated, unbounded, independent egos, not a community.4

What Vaughan proposes is a gift paradigm that views gift-giving as need oriented and other oriented.

Giving for the World

Another interesting angle on giving is giving for world development. According to A. B. Atkinson, "while giving for development is modest in total amount, it is one of the few direct ways in which individuals reveal information relevant to the properties of the social welfare function to be applied to global redistribution." Again a duality exists in this political-economic analysis where individual givers could be termed as welfarist or nonwelfarist. He concludes that "the motives for giving for development are better seen in terms of the impact on a group of representative recipients. The concept of a 'representative' recipient for the individual donor has a parallel at the level of the national social welfare function, suggesting how we can derive a formulation that lies between the extremes of national egoism and global cosmopolitanism."5

Atkinson proceeded to work on an alternative model to explain the economics of giving for overseas development. In place of the public-good (utility derived from the achieved results of the gift) and warm-glow (utility derived directly from the act of giving) models, he proposes the "identification model," in which the individual donor "is assumed to be concerned with the impact on the living standards of the recipients."6

Advocates of cosmopolitanism, however, assume a stronger stance. For instance, the Light Omega Organization, a center for spiritual teaching and healing in Massachusetts, in 2005 asserted that "a true 'global community' means that there cannot be people who are so distant from us that we are indifferent to their needs. Their needs must become our needs, and to be of help, we must go beyond good intentions into understanding something about the 'economics of giving' and, as a nation, make different decisions about how much we give, to whom, and for what reasons."7

The organization, however, recognizes the reality that "at present, the 'economics of giving' cannot be isolated from national self-interest, from political motives, or from a culture's wish to maintain its own comfort, even at the expense of others."8 This perspective exposes two critical considerations that spell out both the certainties and uncertainties of global giving.

First, giving at the international level necessitates various channels and mechanisms. In the case of national and international crises due to natural disasters and social eventualities, the graphic coverage provided by the media quickly lures the public toward giving.9 Institutional extensions and linkages of the media serve as the concrete channels for donations. A host of local, national, and international organizations that are private, governmental, nongovernmental, and/or sectoral and multisectoral in nature also participate in varying degrees.

The Internet is another channel that provides faster and easier means of soliciting donations through electronic philanthropy sites. Further, tax incentives provided by governments encourage charitable giving to international relief and development organizations.10 These instrumentalities, however, are not disinterested entities and possess respective biases on who should give, what to give, how to give, where and when to give, and who to give with. Some philanthropic and nongovernmental organizations even serve as mere tax shelters as a means for big business to avoid and/or evade income taxes.

Second, the economics of giving is further convoluted by the amount of military expenditure that the world annually makes. In 2006, the Stockholm International Peace Research Institute estimated that world military expenditures had reached $1.204 trillion in then-current U.S. dollars.11 In plain economics, the allotment of such an amount to sound development programs and unconditional aid that are oriented toward the poor could simply accomplish the following:12

(a) Improve the lives of 3 billion people living on less than $2 per day13
(b) Send 110 million primary school age children to school, of which 60 percent are girls14
(c) Fund rural development to improve the lives of three out of every four people living on less than $1 per day15
(d) Provide lighting in the homes of 1.6 billion people living without electricity16
(e) Provide food for approximately 790 million people in the developing world who are undernourished (almost two-thirds of whom reside in Asia and the Pacific17
(f) Forgive the debts of numerous countries

Mind-boggling as the data are, the rule is that the needs of a particular country or people are not necessarily the concern of another country or people. Still, hope is not lost, as there are thriving events, issues, conditions, processes, and structures that could shape giving for a global cause.

Motivations for Global Giving

The Philanthropic Initiative, a Massachusetts-based organization, has identified seven motivations for global giving.18 The first refers to the existence of a global community. In the past, charitable giving has been largely confined to local and domestic issues and organizations with which donors have personal connections or of which they have personal knowledge. Today the media and the Internet, and the globalization process, have changed donors' perspective of "community," as they now consider international communities in their humanitarian investments.

Second, global crises, in the form of natural disasters and civil conflicts, have triggered high levels of humanitarian assistance. The 1984 famine in Ethiopia, the 2004 tsunami in South Asia, and the conflicts in Afghanistan and Kosovo are good examples.

Third, the issue of global inequality, where disparities in the distribution of wealth among nations represent unacceptable levels of inequity, constitutes for donors a "moral imperative that drives their philanthropy."

Fourth, the realization of a global community, that peoples and nations without exception have become vulnerable to the world's problems, which threaten their security, leads members to understand that "global problems require global solutions and resources." This motivation emanates from the acknowledgment of global threats.

Together with the recognition of a global community, the next three motivations characterize an evolving global social capital that revolves around global interdependence, global opportunity, and global leverage. Global interdependence in the form of global commerce and trade has created social imbalances producing enormous wealth in some nations while adversely affecting a vast majority of the world's population. More than ever, an increasing number of concerned people perceive that globalization should be backed by a "social imperative to invest internationally."

Global opportunity, in turn, represents the emergence of global social infrastructures in the form of funding and "umbrella" intermediaries, foundations, and NGOs to support and effectively use international resources is making global giving easier and more cost effective.

Finally, donors from wealthy nations who seek maximum benefit from their charitable work find in developing countries excellent opportunities to practice their philanthropy. Their charitable offerings, no matter how modest, can have a tremendous impact on a small village ravished by poverty. In addition, the personal friendships and goodwill developed with peoples and other cultures can be very gratifying indeed. Global leverage best defines this condition.

From the aforesaid accounts, what seems to be the defining factor in giving is the orientation that motivates people to give--the altruistic outlook that appreciates the existence and needs of others and does not merely seek public recognition and glorification. It is in this juncture of analysis that the sociocultural dimension warrants consideration.

Faith in Giving

Notwithstanding the exclusivist tendencies of religions and social philosophies, giving to and helping others critically constitute their core values, beliefs, and practices--nonetheless in varying degrees of activity and passivity. Confucianism considers "self-realization" as a process of establishing oneself by helping others establish themselves and that the ability to comprehend the existence of another person is crucial to establishing the self. It is therefore instructive in that individuals should be conquered by the "great self" that "goes beyond self-centeredness. It relates to the family, the society, the state, and beyond to the world at large. It establishes these relationships as part of its own sensitivity and concern."19

In the Buddhist economic ethic, the act of giving is expressed through the ideas of karma, religious giving (dana), and compassion (karuna). It is more concerned with "cultivating the proper ethical attitudes toward wealth and giving" than with "changing the overall existing distribution of wealth." However, the use of Maitreya by revolutionary and other protest movements spawned "the development of a more socially activist and transformative economic ethic focusing on ideas about economic and political justice."20

Helping others, according to the Hindu belief, is one of the Fifteen Laws of Life. The seventh law states: "If money helps a man to do good to others, it is of some value; but if not, it is simply a mass of evil, and the sooner it is got rid of, the better."21 As for the Jewish philosophy, core value no. 6 (under the Values and Convictions of Hashivenu) states: "Because all people are created in the image of God, how we treat them is a reflection of our respect and love for Him. Therefore, true piety cannot exist apart from human decency." The concern for others further becomes explicit in the story of the Good Samaritan, where "the issue is not WHO is our neighbor, but that we are to BE a neighbor, rendering assistance to anyone in need."22

For the Islamic faith, the third Pillar explicitly delegates humans as mere stewards of earthly wealth. In particular, giving zakat (support for the needy) suggests:

All things belong to God, and wealth is therefore held by human beings in trust. The original meaning of the word zakat is both "purification" and "growth." Giving zakat means "giving a specified percentage on certain properties to certain classes of needy people." The percentage which is due on gold, silver, and cash funds that have reached the amount of about 85 grams of gold and held in possession for one lunar year is two and a half percent. Our possessions are purified by setting aside a small portion for those in need, and, like the pruning of plants, this cutting back balances and encourages new growth.
A person may also give as much as he or she pleases as voluntary alms or charity.23

And from the perspective of the Roman Catholic Church, the most encompassing teaching is perhaps the Populorum Progessio (The Development of Peoples).24 This encyclical from Pope Paul VI envisions and promotes holistic human development and the people-centeredness of development per se. Based on an international prognosis of social problems and maladies, the encyclical states:

Everyone must lend a ready hand to this task, particularly those who can do most by reason of their education, their office, or their authority. They should set a good example by contributing part of their own goods, as several of Our brother bishops have done. . . .

It is not just a question of eliminating hunger and reducing poverty. It is not just a question of fighting wretched conditions, though this is an urgent and necessary task. It involves building a human community where men can live truly human lives, free from discrimination on account of race, religion or nationality, free from servitude to other men or to natural forces which they cannot yet control satisfactorily.25

The encyclical further provides for development at the international level and specifies the role of better-off nations:

This duty concerns first and foremost the wealthier nations. Their obligations stem from the human and supernatural brotherhood of man, and present a threefold obligation: (1) mutual solidarity--the aid that the richer nations must give to developing nations; (2) social justice--the rectification of trade relations between strong and weak nations; (3) universal charity--the effort to build a more humane world community, where all can give and receive, and where the progress of some is not bought at the expense of others. The matter is urgent, for on it depends the future of world civilization. . . .

The duty of promoting human solidarity also falls upon the shoulders of nations: "It is a very important duty of the advanced nations to help the developing nations. . . ."

Finally, "the superfluous goods of wealthier nations ought to be placed at the disposal of poorer nations. The rule, by virtue of which in times past those nearest us were to be helped in time of need, applies today to all the needy throughout the world."26

Further, the teaching of the Catholic Church about the distribution of wealth states that the goods of the earth are gifts from God and they are intended by God for the benefit of everyone. There is a social mortgage that guides our use of the world's goods as stewards and trustees of creation and not as mere consumers and users.27 Peoples and nations should therefore avoid the risk of increasing still more the wealth of the rich and the domination of the strong while leaving the poor in their misery and adding to the servitude of the oppressed.28

Conclusion

The sociopolitical and political-economic analyses of the "economics of giving" flesh out the manifold mitigating factors of why people give. On the one hand, these help us understand the complex nature of giving; on the other hand, the analyses likewise reveal the challenges and uncertainties that giving for a global cause faces. Inseparable, however, is the sociocultural perspective, for it discloses the metaphysical dimension that stimulates giving.

Major religions and social philosophies have their respective values and means of promoting selflessness and world development. To advocate global giving and universal solidarity, therefore, is to advance the agenda of an interfaith dialogue that would harness and solidify the efforts for global giving--a dialogue that would function as an instrumentality to confront the uncertainties and obstacles of giving for a global cause.

Notes

1. Ruben Hernandez-Murillo, "The Economics of Giving," in National Economic Trends (St. Louis, MO: Federal Reserve Bank of St. Louis, October 2005). Cf. Lise Vesterlund, "Why Do People Give?" in The Nonprofit Sector, 2nd ed., ed. Richard Steinberg and Walter W. Powell (New Haven, CT: Yale University Press, 2006).
2. Ibid.
3. Genevieve Vaughan, For-Giving: A Feminist Criticism of Exchange (Austin, TX: Plain View Press and Foundation for a Compassionate Society, 1997), 14-16.
4. Ibid.
5. A. B. Atkinson, "Welfare Economics and Giving for Development," in Welfare, Development, Philosophy and Social Science: Essays for Amartya Sen's 75th Birthday, vol. 1, Welfare Economics, ed. Kaushik Basu and Ravi Kanbur (Economic and Social Research Council project grant "Giving to Development," 2007).
6. A. B. Atkinson, "The Economics of Giving for Overseas Development" (Working Paper A08/03 Applications and Policy, Economic and Social Research Council project grant "Giving to Development," Southampton University: Southampton Statistical Sciences Research Institute, January 2008).
7. Light Omega Organization, http://www.lightomega.org/NL/ 2005-01-12.html (accessed June 20, 2008).
8. Ibid.
9. E.g., Philip H. Brown and Jessica H. Minty, "Media Coverage and Charitable Giving after the 2004 Tsunami" (William Davidson Institute Working Paper, no. 855, Ann Arbor, MI: University of Michigan-Ann Arbor, December 2006).
10. David C. River and Mark O. Wilhelm, "Charitable Contribution to International Relief and Development," National Tax Journal 48, no. 2 (June 1995): 229-44.
11. Http://yearbook2007.sipri.org/chap8/ (accessed June 30, 2008).
12. The data are also provided by Anup Shah in "Poverty Facts and Stats" on the Global Issues Website at http://www.globalissues.org/article/26/poverty-facts-and-stats.
13. Http://www.worldbank.org/html/extdr/extme/G8npoverty 2000.pdf (accessed June 30, 2008).
14. Ibid.
15. United Nations Development Programme, Human Development Report 2007/2008 (November 27, 2007), 25.
16. Millennium Development Goals Report 2007, 44.
17. World Resources Institute, Pilot Analysis of Global Ecosystems (February 2001).
18. Paula Johnson, Global Giving: Making a World of Difference (Boston: Philanthropic Initiative, 2003).
19. Tu Wei-ming, "Core Values in Confucian Thought," http:// www.trinity.edu/rnadeau/FYS/Tu Wei-ming.htm (accessed June 29, 2008).
20. Gregory K. Ornatowski, "Continuity and Change in the Economic Ethics of Buddhism--Evidence from the History of Buddhism in India, China and Japan," Journal of Buddhist Ethics 3 (1996), http://www.buddhistethics.org/3/ornatow1.html (accessed July 1, 2008).
21. Swami Vivekananda, "15 Laws of Life: What You Need to Keep in Mind," http://hinduism.about.com/od/vivekananda/a/ lawsoflife.htm (accessed July 1, 2008).
22. "Values and Convictions of Hashivenu," core value no. 6, http://www.hashivenu.org/corenvalues.htm (accessed July 1, 2008).
23. "What Are the Five Pillars of Islam?" http://www.islam-guide.com/ch3-16.htm (accessed July 1, 2008).
24. Pope Paul VI, Populorum Progressio: Encyclical on the Development of Peoples (March 26, 1967).
25. Ibid., 32, 47.
26. Ibid., 44, 48 (cf. "Church in the World of Today," no. 86: AAS 58 (1966) 1109 [cf. TPS XI, 319], 49.
27. Cf. "Stewardship of God's Creation," in Robi A. Marshall, Health Quest Pentathlon, Lifepac Five (Chandler, AZ: Alpha Omega Publications, Inc., 2002); Pope Paul VI, Populorum Progressio: Encyclical on the Development of Peoples (March 26, 1967), no. 22; United States Conference of Catholic Bishops (USCCB), "Global Climate Change: A Plea for Dialogue, Prudence and the Common Good" (June 15, 2001), 4; USCCB, "Economic Justice for All," Pastoral Letter on Catholic Social Teaching and the U.S. Economy (1986), no. 228; Russel A. Butkus, "The Stewardship of Creation" (Waco, TX: The Center for Christian Ethics at Baylor University, 2002).
28. Pope Paul VI, Populorum Progressio: Encyclical on the Development of Peoples (March 26, 1967), no. 33.


Lilian J. Sison is the dean of and a professor at the Graduate School of the University of Santo Tomas in Manila. She holds a PhD in chemistry. She is also the secretary general of the Asian Conference of Religions for Peace in the Philippines. Jaime M. Jimenez, PhD, is associate professor of development studies, Asian studies, and political science in the Graduate School and the Faculty of Arts and Letters at the University of Santo Tomas.


This article was originally published in the October-December 2008 issue of Dharma World.

back to this issue's table of contents


 
 
Kosei Publishing

Copyright (C) 1997-2012 by Kosei Publishing Co. All rights reserved.