According to one ancient belief system, the 8 levels of charity:
8. When donations are given grudgingly.
7. When one gives less than he should, but does so cheerfully.
6. When one gives directly to the poor upon being asked.
5. When one gives directly to the poor without being asked.
4. When the recipient is aware of the donor's identity, but the donor does not know the identity of the recipient.
3. When the donor is aware of the recipient's identity, but the recipient is unaware of the source.
2. When the donor and recipient are unknown to each other.
1. The highest form of charity is to help sustain a person before they become impoverished by offering a substantial gift in a dignified manner, or by extending a suitable loan, or by helping them find employment or establish themselves in business so as to make it unnecessary for them to become dependent on others.
Obviously, #1 is better than #8. But #8 is still better than doing nothing at all.
This is not efficient. Under this system, giving a homeless person $1 is good, but giving him $1 and setting another dollar on fire (maybe in a way that hurts me!) is even better.
Instead, it makes sense to measure utility against cost. Helping someone at great expense is good. Helping someone at no incremental expense is better. Helping someone in a way that produces extra wealth--perhaps enough for you to profit from it--is best of all.
> This is not efficient. Under this system, giving a homeless person $1 is good, but giving him $1 and setting another dollar on fire (maybe in a way that hurts me!) is even better.
I would say that these are two distinct acts. You do not help someone by setting another dollar on fire. Rather, the comparison would be giving someone your last 10$ vs. giving 10$ when you are a billionaire. I think in some ways, perhaps unquantifiable, that it is more 'noble' about acts that are not in self interest. Businesses are not the same as non-profits, even if they functionally provide the same service.
> Helping someone in a way that produces extra wealth--perhaps enough for you to profit from it--is best of all.
I don't know if this was intentional, but this implies a higher order magnitude of help. I would personally balk if I hear of a charity that donates only 50% of what they receive to the intended audience.
One can come up with an example that makes the same point I made before, but isn't 'two distinct acts'. Stabbing yourself in order to donate blood in person versus doing it the usual needle-and-bag way, for example.
My point is that arbitrarily adding costs to a given act doesn't make it better. Charity isn't good because it sucks for someone; it's good because it's good for someone.
If you're giving your last $10, you're putting yourself in financial danger; you might need that money. The billionaire isn't in any danger from being $10 short. Thus, the first person is causing net harm to the world; the same $10 has been donated to the same charity, but the result is one person closer to penury. Whereas if the billionaire did it, that wouldn't happen.
I don't know if this was intentional, but this implies a higher order magnitude of help. I would personally balk if I hear of a charity that donates only 50% of what they receive to the intended audience.
My main point is that judging charity by cost is dumb. It produces bad incentives. Arguably, those charities are superior to other charities, since they make it so expensive to help someone. To do $100 worth of good at the Disabled Veterans Associations, you need to donate nearly $10,000! Donating to a more efficient charity means you suffer less pain for a given amount of money making it to the end recipients. If costliness makes charities better, shouldn't we seek out the most inefficient possible charities? Why not?
8. When donations are given grudgingly.
7. When one gives less than he should, but does so cheerfully.
6. When one gives directly to the poor upon being asked.
5. When one gives directly to the poor without being asked.
4. When the recipient is aware of the donor's identity, but the donor does not know the identity of the recipient.
3. When the donor is aware of the recipient's identity, but the recipient is unaware of the source.
2. When the donor and recipient are unknown to each other.
1. The highest form of charity is to help sustain a person before they become impoverished by offering a substantial gift in a dignified manner, or by extending a suitable loan, or by helping them find employment or establish themselves in business so as to make it unnecessary for them to become dependent on others.
Obviously, #1 is better than #8. But #8 is still better than doing nothing at all.