Buried away in a tiny Telegraph column this week was a reference to one of the best academic studies
to emerge in a long time. Doctors in a Scottish hospital have looked at
the hidden costs of charitable parachuting, to the health service in
particular, and published the results in the journal Injury (the link
is to the abstract unless you or your institution subscribe). They
found that the injury rate was 11% and the serious injury rate 7%.
Minor injuries cost the National Health Service £3751 on average and
serious injuries £5781.As the average parachutist raised all of
£30 (this is just a day out after all) each pound raised for charity
cost the NHS £13.75. Every one of the charitable types who feels
terribly virtuous raising money for charity in this way is actually
preventing the health service treating the sick.
Here is the link, and thanks to Matthew Sinclair for the pointer. Can you think of other comparable examples of negative charity?
Addendum: Jeff Ely directs my attention to this example; buy and drink some water, so that Starbucks will donate money to address the water shortage (in other countries).
That would be the kids on my block last year selling 25-cent lemonade for the tsunami victims, using more than 25-cents worth of supplies (provided by mom) for product, signs, collection jar, etc.
How about 4 deaths while running for charity in the “great north run” sponsored by
a health care provider:
http://news.bbc.co.uk/2/hi/uk_news/england/tyne/4259174.stm
£3751 (US$6714) for a minor injury? I’ll discount any claims as to the efficiencies to be realized by socialized medicine accordingly.
Ah yes.. I thought the idea of ‘parachuting for charity’ was somewhat bizarre, until I noticed the first commenter on Sinclair’s site describing it as ‘someone asked me to pay for them going skydiving.’ Now that makes sense.
All bake sales that refuse cash donations in lieu of homemade cookies sold for less than the price of ingredients. Well, perhaps not a good example of “negative charity”, but I just needed to get that off my chest.
Serious charity races have to be net value decreasing.
Folks spend weeks training for them. If the
participants would instead spend the time at a second
job, donating the proceeds to the charity. I just
don’t get why anyone effectively asking me to buy
them a gym membership as donation should expect
to be met with ought but derision.
Some of the criticisms just mentioned have come up before. The thing is that the amount lost is so huge (13 to 1) that the conclusions is robust to substantial changes in the injury rate. The cost number I would expect to be accurate given that it was compiled by the people performing the treatment.
That reminds me of a class I had in 8th grade where the teacher printed currency and ran a mini-economy. People were selling Blow-pops and home made brownies and stuff for as low as one e-dollar, which was the equivalent of $0.01, it was crazy. I ended the project with much less money than I started, and probably much less healthy too. But that four dollars and change I lost easily bought me $100 in snacks.
All of the above, though, are really pretty cheap. Here are three which are much worse:
– giving free infant formula samples to HIV-negative mothers in countries with bad water supplies
– allowing pharmaceutical companies to donate inappropriate medicines such as nicotine patches to refugees and disaster victims. http://www.drugdonations.org/eng/eng_nieuws6.html explains the reasons why this happens and the costs it imposes on aid groups
– invading and occupying a country in order to give it democracy and freedom
Charity-parachuting and charity-bottled-water, though, are quite different from the above 3 and may not be truly comparable. They are basically a way to feel good about something you would might do anyway. The worst of this category IMHO is the practice of having socialite parties as charitable fundraisers.
VTconomist and Albatross,
The US is a country so wealthy that we can afford to burn food in the form of ethanol in order to feel virtuous. However, I can imagine a point in the near future where ethanol’s net energy balance improves to the point that it balances sanctimonious ethanol buying and the practice ceases to be a “negative charity.”
Correct me if I’m wrong, but I thought the reason we burned ethanol in our fuel was to get more gallons of gas out of a barrel of oil, not to save the environment? The same as MTBE, of which a ban just kicked in in some localities, stretching the oil supply just that much thinner.
In a way, isn’t all charity like this? Presuming that a large entity, such as a government, can better calculate need (less emotional, more resources to calculate), and can more efficiently allocate funds, doesn’t individual charitable giving decrease the moral hazard of a proper welfare state?
There would be an exception fot eh Bill Gates model of giving, I would think, whiyh I would characterize as having considerably greater than individual resources, and narrowly focused on experiments that can prove models of giving that can later be more thoroughly funded by government-sized organizations.
There was a George Ade story (sorry no cite, probably written around 1900) about a charity fair. It toted up the costs vs. what went to charity, and iirc, ended up not much different from the parachute jumps.
As for the blood donations after 9/11, I don’t think it was obvious early on that there would be so few injured survivors. Blood donation might count as a reasonable gamble rather than an ill-judged cost.
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I know this is an old entry. But I have a related question and wonder if anyone knows.
Is there a general ‘economics of raising money for charity’?
I see many people who say “anything for a good cause is good” and then spend X% of $Y raising the cash, where X can be quite a big number, and it makes me wonder.
This is the kind of thing I mean:
I believe that ‘professional’ charities expect to make X around 10-15%. I also suspect that the amount the general public is prepared to give is bound (it just takes work to extract it).
So, if someone extracts some charity money at 50% inefficiency (cost), and that cash could have been extracted at 10% inefficiency then the general world of charities are down 40% of the amount raised, no?
has any proper work been done on this?
cheers
I’ve tried to access the academic studies link, but it won’t work. Nevertheless, this study makes you wonder if it’s not easier to donate a car. If the injury rate is very high why is it still using the charitable parachuting?
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