If Government Aid Programs Were Charities, Would Anybody Recommend Giving Money to Them?

The government excels in spending money on overhead costs


With the Christmas giving season comes the annual warnings to check out the details of any charity asking for holiday donations. Make sure they aren't frauds. Check out how much money actually is used for programs versus how much money is spent on salaries and overhead. Is the charity making responsible choices? Will a donation actually help needy people?

California Attorney General Kamala Harris' office sent out a release last week with their tips for holiday giving:

Make sure your charitable donations are well spent and serving the activities you support by working with a local charity as a volunteer or by contacting the charity directly to make a donation.

A shame we don't have the same option for our "donations" to the government. The Capitalism Institute — a relatively new, free market, Christian-oriented organization — has been passing around a simple chart showing the difference in where money to a typical charity goes versus where money the federal government spends on public aid programs generally goes:

The chart might have shown up in your Facebook feed if you have a number of libertarian friends or have liked libertarian organization pages. The statistic comes from a report by economics professor James Rolph Edwards from a 2007 Journal of Libertarian Studies (pdf). One wonders what the percentage is these days. Edwards actually drew the numbers from studies in 1989 and 1996.