How many people experiencing homelessness (in addition to hunger, illness, joblessness, poverty) do you estimate you have walked by in your lifetime? At least one I would assume. If you live in any major city, probably a dozen in a single trip to work or to the store. I do not expect you to know – the number is just that large. Do you look them in the face or speak to them ever? Probably not. You likely ignore them which makes estimating that number even more difficult. It is hard to quantify people when we are not treating them like people. Do not take offense. I am not saying you are heartless for not giving your every dime to the people you walk by on the way to make or spend your money. Saying I do would be lying. But I am saying your rationalization to not spare change is likely misguided and uninformed.
Rather than looking the person in the face and saying, “Sorry, I do not have money to spare,” which of the following do you think to yourself as you speed-walk past:
- My small contribution to one person does not do enough to help.
- It is the public sector’s responsibility to intervene and provide them with resources.
- They will probably use the money for something besides the resources they need.
Because you cannot visualize the benefits of your contribution, you free yourself from complicity by placing the blame of causing and burden of solving the “problem” on others. Your actions (or lack of) are not directly responsible for what this stranger is experiencing, right?
Well, you should be holding yourself accountable, because your diffusion of responsibility goes far beyond that one person on the street. Civilian inaction exists on a much larger scale than what you likely accredit and it stagnates the efforts made to close socioeconomic gaps between the rich and poor. Specifically, there is a pronounced lack of support for the third sector: NGOs and nonprofits. The organizations comprising this sector are the primary actors and agents of change in the lives of those homeless, hungry, ill, jobless, and poor that you walk by day-to-day. These organizations, often lacking in resources to sustain themselves, are the primary vehicles providing resources to the needy. If you want to help you should be supporting these organizations, but research shows you likely do not.
Just as you rationalize not giving to the poor, you likely use the same rationalization to not give to the organizations that give to the poor for you. This is particularly evident in Brazil, which recently lept forward in GDP growth and citizen sociopolitical participation, but still has an underdeveloped third sector and one of the world’s largest socioeconomic gaps. How can the country get richer, but the poor remain poor? Well, the cliché that the rich keep getting richer and the poor keep getting poorer is true. Brazil’s third sector, more than most in similarly developed countries, lacks a supportive environment. Individual donors misunderstand and mistrust the sector’s seemingly corrupt intentions, yet, place trust in the public sector’s welfare programs and in the “socially responsible” ventures of the business sector. In reality, business and government aid rarely reach the vulnerable populations they should and over-regulation of the market gives way to monopolies and underfunding that frustrate the work of the third sector.
A Dollar Each Sunday Keeps the Devil Away: The History of Individual Giving
To understand how people rationalize giving it is necessary to understand what motivates people to give in the first place. Roberto Paulo Cezar, CEO of Brascan Brazil and member of several Brazilian publicly-held companies, wrote the following for the Harvard Review of Latin America:
Charity was basically a religious obligation, rather than a civic one. The object was to save the individual soul, not the collective city. The latter was the exclusive responsibility of the government: the King, the Emperor; the multiple Presidents and since 1960, an abstract concept translated into the world, Brasilia, the central government.
Initially, individuals donated to local churches under the impression that these dues would absolve their sins and bring them salvation. This church role has carried on from the colonial era until the present day. Meanwhile, any matters relating to solving larger socioeconomic, sociopolitical issues have been traditionally relegated to the State, because it oversees trade, collects taxes, and distributes resources. The Brazilian state is economically positioned to resolve several oppressive phenomena, but statistics show otherwise.
Brazil’s Big Bucks: The Economic Reality of Today
Brazil is amongst the largest and most diverse countries – in every sense of what these words mean. It is the fifth largest by population with more than 207 million people. It also places fifth in terms of area. The demographic and geographic vastness of the nation has provided it with a mixed economy that yielded the ninth largest GDP. Despite these advances, Brazilian society is one of great inequality and poverty. 44.7 million heads of household earn less than US$230 per month for a family of 4. That was my budget during my semester abroad, but for one week and one person. The poorest 50 percent share 12 percent of the income, while the top 10 percent share more than 50 percent. Clearly, there are sociopolitical and socioeconomic factors at play causing wealth to be unequally distributed amongst classes. The government is failing to attack these factors.
A New Sector is Born: The Emergence of the Third Sector
In response to the government’s shortcomings, the third sector emerged as the primary purveyor of aid to impoverished communities. According to Fernando Rossetti, CEO of Group of Institutes, Foundations, and Enterprises, new kinds of organizations were built on the blueprint churches had used to create children and health-related charity initiatives. These new organizations and networks, based mostly on identity and sociopolitical rights, emerged during major shifts in governing. The 1820s, during which Brazil declared independence from Portugal; the 1930s, during which the country was under the dictatorship of Getulio Vargas; and the decades following 1964, during which the country entered and exited a military dictatorship were all formative periods for the third sector. The third sector positioned itself at the forefront of political organizing.
Despite legal state blowback, which created vulnerability within the third sector, during those crucial times of severe political and social oppression, the third sector counted with immense civilian support and participation, because all rights, regardless of a person’s background, were threatened. Writing about the 1930s, Rossetti explained that the “increased political nature and power of these organizations led to increased state control…through labor laws…and their independence was further curtailed in 1964.” In writing about how the third sector responded to the state control, Rosetti said that “[third sector networking] created the base for the democratic state”, effectively helping bring the Brazilian state out of its dictatorial military regime and into the global market. This led to, for some time, a healthy economic environment under which the third sector could grow. But that growth has been stunted for a myriad of reasons.
Can You Spare Some Change?: Individual Giving by the Numbers
Before deconstructing the contemporary rationalization behind individual giving, it is necessary to understand just how poor the rich have been at giving to the poor. Though Brazil’s GDP makes it the world’s ninth largest, it ranks 68th place in terms of individual giving. Andrew Milner, writer for Alliance Magazine, found that donations amount to a lowly 0.3% of the GDP. In 2014, US$4.2 billion were donated from individuals and an additional US$1.3 billion were donated from institutions and corporations. While Milner claims these figures can seem promising, especially considering that about half of the population is politically involved with a cause and donates, the nature of causes and organizations being donated to is where a stark difference can be observed. This difference will continue to hold Brazil back from closing socioeconomic gaps.
Now, let’s cycle back to your rationalization for not participating in individual giving. There are similar reasons people do not donate to the third sector.
My small contributions to [the third sector] do not do enough to help.
Many people struggle to understand the third sector’s goals and, accordingly, do not donate their money to nonprofits and NGOs. Thirty years ago, the Brazilian third sector was underdeveloped and did not exist as a uniform economic sector, but rather as multiple organizations with similar values. Now, the sector is much more developed, yet, its usefulness has been lost on the Brazilian people because the attacks on human dignity are not as in-your-face as they were before. Ana Valeria Araujo of Brazilian Human Rights Watch echoed this saying, “Most of the people now who have rights don’t know that those rights are the result of a process that involved NGOs or civil society struggling for them.” When citizens are sufficiently enfranchised – their rights sufficiently protected – they fail to take as much notice of when others are oppressed. Even when it very much around, as is the case with poverty in Brazil, particularly with favelas.
So, it is much more common for people to donate their money to other causes, particularly children’s and health-rated causes, which were the same causes churches were advocating for during the colonial period. 40 percent of individual giving in Brazil went to health causes, 36 percent to children’s causes, and 29 percent to combat hunger. No identity-based or rights causes made the list. Psychologically, those causes on the list are easier to comprehend and act upon, because there is often a “hard science” grounding their validity. Whereas the social sciences form much of the evidence used to support identity-based sociopolitical or socioeconomic causes. “People can’t really distinguish between organizations because they don’t really know what they do…consequently, there’s no general perception of the role that civil society has played and still plays,” said Milner. These organizations become less marketable and he who doesn’t communicate, gets his fingers burnt.
In addition to misunderstanding the political and social value of third sector organizations, the general public lacks an understanding of the economic value they bring the State. Although the third sector is a not-for-profit sector, the uplifting of underserved communities generates a profit which society and the State benefit from. Flavia Sa and Natalia Sant’Anna of the United Nations Development Program for Brazil, cited that for every R$1 the government invests in the third sector through tax exemption generates R$5.92 in return. Additionally, as recently as 2014, 1.3 million jobs were created by the third sector. Unfortunately, these benefits are often overlooked while the narrative that the third sector is a large public expense is perpetuated.
It is the public sector’s responsibility to intervene [not mine].
Cezar’s observation that citizens view social reparations as the responsibility of the state still holds true today. “We’ve learned from our history that Congress, presidents, make the laws, the good laws, and the bad laws and that whatever happens in the country depends on governments action.” Ironically, however, it is a commonly held belief that the State spends too much money on social welfare programs. So, would it not make sense then for the third sector to step in and provide the aid the government cannot – or rather refuses to provide? The reality is, as much as citizens complain about public expenditures on welfare, the State does not spend that significant of an amount. According to Forbes reporter Kenneth Rapoza, in 2013, the Brazilian government spent US$10 billion on one of the largest welfare programs, Bolsa Familia, which only represents 0.46 % of the GDP. Perhaps taxpayers believe that much more of their money funds welfare programs than does because a poll found one-third of individuals do not donate money since they already pay taxes.
Not only is state support of the third sector minimal, but in comparison, there is much more support of organizations with “socially responsible” ventures in the business sector. In recent decades, it has become a common practice for major corporations to have non-profit subsidiaries as a way to offset negative attention for other practices and to win over a general public that emphasizes social responsibility. The state supports these endeavors through a myriad of laws. In his article, Cezar explains that the Rouanet Law gives allowances to corporations that contribute to cultural projects but does not provide those same allowances to individuals or families making philanthropic donations. The state has also scaled back its own efforts in providing capital for non-profits and this decentralization has paved the way for more privatization. Accordingly, the private sector has grown exponentially faster than the private sector. This reality is illogical in that the third sector is supposed to be the most socially responsible of the three.
They will probably use the money for something besides the resources they need.
Corruption scandals have been at the center of why many do not donate to the third sector and why the business sector has in many ways been more profitable. As there is mistrust of the public sector, its interwovenness with the third sector (in that the public sector helps fund the third sector), there is a related mistrust of the third sector. Dating back to the 90s, there are prominent examples of corruption cases in which members of Congress used philanthropies for their own personal gain. Those scandals have marred public perception of the third sector. Sa and Sant’Anna explained that besides the benefits that are evidently there, “in many cases [philanthropy] is used in a deprecatory way, in connection with self-serving actions by those who took advantage of tax and other government benefits without producing the social benefits they claimed.” To leave behind this image and address the other concerns listed throughout this essay, the third sector must undergo a massive overhaul that changes how it operates on political, economic, and social levels.
Conclusion: A New Era for the Third Sector
The third sector is slowly making its way towards a reality in which more individuals participate in giving. To create a better economic environment for itself, the third sector must successfully put into action the four following things.
First, organizations must rebuild, strengthen and maintain their relationships with the public by building bases of individual donors. A majority of funding comes from donations, not government grants, so this is vital.
Second, organizations must lobby and work with the state so that tax exemptions are put into place for individuals and families. Tax incentives are a tried and proven method in the United States which help increase the percentage of citizens who are involved. Numbers already show how much more money is generated from individual donation than from businesses, so it is necessary that this number continues growing. Additionally, having the tax exemption enforces the reporting of donations which helps keep better statistical tracking.
Third, in working with the government, the third sector must be allowed to set their own ethical standards and must be allowed to oversee the audits within the industry itself. The bureaucracy of audits performed by the government only serves to frustrate the efforts of the third sector and block progress.
Fourth and final, the third sector must present itself as a united front. Chandrika Sahai, member of GIFE (Group of Institutes, Foundations, and Enterprises), argues that network building with social justice as the central theme creates a better sense of what organizations are doing for the public without causing organizations to lose their individual missions or audiences. These united fronts have already been set into motion with networks like GIFE which is composed of 60 non-profits and the SDG Philanthropy Platform. Additionally, the strength in numbers aids in resources like publicity and person power. With these factors in place, the third sector would be as successful and reputable as the public and private sectors.