Review of ‘Charity Sucks?’
Iqbal Wahhab’s short Charity Sucks (London: Biteback, 2016, 112 pp.) argues that charity sucks because business does it better. Part of Biteback’s Provocations series, it states: ‘Businesses win over charities in our ability to improve the world.’ (101) This is perhaps not a new position: the ‘business critique’ of charity. Fundamentally, ‘charity’ is seen as lacking two major things that businesses draw on in their improving of the world. First, charity is based on an unequal ‘gift’ relationship: the giver has a power over the receiver drawn both from the giving of the gift and its unreciprocability. Second, charities lack the hard-nosed focus, the accountability, the entrepreneurial skills, and the business outlook of the private sector. Drawn on by the incentive to make money — which encourages innovation and hard work — businesspeople find problems, dynamically create solutions, and let the market decide whether the solution is good enough.
Iqbal assembles a number of arguments to support and develop the idea that charitable dependency can be counterposed to lending-based economic empowerment. Most of these are drawn from the international development context. He advocates lending, rather than charity, and praises micro-finance as a way to achieve the economic empowerment that ‘can break the cycle of deprivation and its alter ego dependency’ (33). But it is wrong to suggest that the charity sector has not already largely started to move away from a model of doing services to ‘the needy’ and instead creating services with the people who use them. Ideas of co-creation, building on existing assets and ‘empowering’ people (rather than ‘helping’ the needy), are all now common in the charity sector.
To take the second aspect of the critique, namely that charities cannot compete with the efficiencies of businesses. Within the charity sector itself, Wahhab rightly points out, it is not easy to identify or measure ‘success’. Charities do not exist to maximise profits, but instead to advance their (often diffuse) charitable objectives. In other words, part of the logic of charity must be to introduce a metric, other than profit and loss, by which to measure whether they are changing the world, and having the social impact that they would like. The lack of this market mechanism has a number of interesting consequences. There is no clear ‘market exit’ mechanism for a charity that is not achieving social impact — any organisation will be able to persist if it can convince foundations or the public to continue supporting its cause. Relatedly, there are too few mergers in the charity sector, and too much duplication, with a high number of similar projects. There are also potential problems with the governance structures of the sector, based as they are on trustees being unpaid volunteers. Trustees of any organisation have an interest in saying that the venture they’re involved with is a success (rather than that they’ve wasted their time).
Wahhab, then, succeeds in his provocation to the extent that he reveals some potential problems with charity as a mechanism of solving social problems. He blames the charity sector for not solving the social problem of high rates of reoffending. However, his proposed solution seems at points far less likely to generate a positive social impact. For instance, he suggests including something about corporate social responsibility in job appraisals — but what is the incentive for businesses to engage in this? More generally, the market is indifferent to the fates of individuals who participate in it, and this is part of the definition of the impartial and decentralized allocation mechanism of the free market. For this reason, the third part of the book in which Wahhab outlines his alternative solutions comes across as the least focused section of the book, and includes unconvincing dismissals of Marx, Pikkety, and all governments in the space of a page.