Redesigning Capitalism and Charity

Photo of trays of breakfast sitting on a counter.

Breakfast prepared at Miriam's Kitchen. Photo courtesy of Geoffrey Dudgeon / flickr.

A few weeks back, First Lady Michelle Obama paid a surprise visit to Miriam’s Kitchen, one of Washington’s most dynamic service organizations.  

In subsequent media coverage detailing her visit and documenting the growing demand for services at front line programs throughout the country, a controversy arose over a guest of Miriam’s capturing the moment on a cell phone camera.  

From across the country, the cry arose—“If he’s “homeless”, then how come he has a cell phone?”  

This simplistic, yet understandable lament reveals America’s deeply flawed understanding of philanthropy, and it offers an opportunity to re-explore the way we seek to address seemingly intractable issues like poverty, addiction and unemployment.  

Photo of Robert Egger. Archive photo

So much of charity is based on the historic values of an “agri-culture”, when members of small, land based economies depended upon each other in times of flood, fire or famine. It was a time we recall often romantically, when neighbors and kin cared for each other without thought of tax deductions and nobody asked for help unless it was truly needed. But it was also a time of horrors like debtors’ prisons, orphanages, mental asylums and work farms for those who could not or would not conform to societal standards.  

Those times are gone, yet we still cling to economically simplistic, and often emotion-based notions of charity. One idea is that a person must hit rock bottom to merit society’s support. Another is that the organizations which serve the needy must be “charities” run by earnest, low-paid staff that focus 100% of their incomes on immediate necessities.  

Personally, I hope those ideas crash and burn alongside some of the similarly antiquated economic policies that have all but ravaged our shared economy.  

Now is the time to redesign BOTH capitalism and charity. We can begin by divorcing ourselves from the outdated preoccupation with trying to determine who “deserves our help.” From there we can move on to marrying two profound new concepts—1) that nonprofit organizations can actually create wealth, and that 2) the way you spend your money every day is a far more powerful tool than charity.  

First of all, we must help our fellow citizens understand the economic folly of waiting for folks to fall all the way down before we extend a helping hand. Frankly, it took me a while to get over these often-counterintuitive notions.  

Take the idea of Housing First for example. As a person who has spent his entire nonprofit career in immediate proximity to people in addiction or wrestling with mental illness, I had concerns about the viability of placing people in permanent supportive housing versus the shelter system I grew up with. The economic cost of the shelter system is huge, however, in comparison to the cost of getting folks into a home.  

And because the chronically homeless make up such a small percentage of people seeking sporadic housing support, it makes huge sense to advance this tactic and then use the money saved to strategically focus on the targeted needs like addiction services, job training and mental health care.  

Then comes the task of taking a more economically-educated view of the ill-named nonprofit sector itself.  

A recent economic impact study by the Philanthropic Collaborative (of which I am a member) conservatively concluded that the $43 billion that private and community foundations invested in their communities in 2007 (which represents a fraction of the sector’s $1.5 trillion annual revenue) yielded $500 billion in household income and an additional $150 billion in government revenue—equaling an almost a nine to one return on investment.  

This smashes the notion that nonprofits are a drag on the economy and puts the sector in Washington, and in every American city, at the forefront of our country’s economic engine.  

As such, those who proudly serve our communities must stand together to advance the sector’s enormous contributions as well as advocate for our inclusion in every dialogue about the future goals of any community.  

But as more and more groups move from managing shelters and building affordable housing or, in the case of DC Central Kitchen, evolve from training to actually employing those we train in revenue-generating business, we must also help donors learn that the power of daily commerce far outweighs the limited power of once-a-year contributions.  

Simply put: the more we frequent businesses that provide a solid wage, healthcare, and childcare, the less we will need to donate to charity to make up for those that do not.  

Therefore, the future of philanthropy does not lie in more nonprofits, or even in nonprofits run like businesses—it lies in citizens electing people who understand the promise of new philanthropy and consumers who support businesses that reinvest in the community.  

And those are ideas you can take to the bank.  


Robert Egger is the founder and president of DC Central Kitchen. He’s a former Street Sense board member. 

Issues |Nonprofits

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