Charity is failing as a sector largely because it is measured by its ability to become obsolete. I am not referring to any charity or nonprofit in particular, or to charity as the gifting of money/goods/services, but to the mainstream vision of charity as it relates to addressing significant disadvantages within a population. The end game of these charities should be to work towards a point where the populations they serve are no longer disadvantaged. So why is it that so few, if any, charities close down because they “succeeded”?
I would argue that it is possible charities seldom succeed because they have reasons not to. The incentive structures within the charitable sector work against their mission, rather than support it. Where the private sector is incentivized by fortune, the charitable sector is incentivized by misfortune. Just as a gap in the market can bring new opportunities for a business, a gap in income or education can spearhead a charity or nonprofit; more social problems mean more grants and jobs that become available for the charity or nonprofit. It is as if the sector was founded on a conflict-of-interest: succeed by eliminating the “gaps” of society, except that the perpetual existence of the gaps is what keeps you from falling within one.
Furthermore, the charitable ecosystem is built on a culture of permanency. There are no rewards for concluding a charitable mission other than a potential recognition letter from your local United Way. Not to mention the disincentive of everyone in the charity becoming unemployed. This culture of permanency is further displayed by the recent rise in college graduate certificates like Nonprofit Leadership and Management, and university degrees across all levels, such as the Masters of Philanthropy and Nonprofit Leadership. We now expect people more than ever before to make sizeable personal investments in what are lifelong careers in charitable work.
Obviously, everyone knows the charitable sector is not going anywhere soon. In 2012, a record 882,000 Canadians used food banks each month, and the estimated number of Americans living in poverty increased by 1.1 million to 39.1 million in 2008. According to UNICEF, 22,000 children die each day globally due to poverty and, at least, 80% of humanity lives on less than $10 a day. As American author Robert Lupton (2011) stated,
for all our efforts to eliminate poverty— our entitlements, our programs, our charities— we have succeeded only in creating a permanent underclass, dismantling their family structures, and eroding their ethic of work. And our poor continue to become poorer.
Now, as we all know, there are multiple factors behind the ongoing inequities that exist around us, but the time has come to acknowledge that the way the sector is structured is also part of the problem. The notion that charities are somehow not accountable due to their underlying noble intentions is simply no longer acceptable. We need to reimagine the charitable sector, recognizing its flaws and addressing these built-in complications, so those in the sector can focus on society’s gaps without falling in one as well.