I read at the abcnews site that Warren Buffett and Bill Gates have been on a crusade to convince some of the billionaire families to give half of their vast fortunes away to charities.  Apparently they were successful.

Some of the money being given away is even old money that has been in families for generations.

You might think that this is great, but I don’t.  It’s not that I think those extremely rich families and individuals should hoard that money.  No, it’s more that I hate do see people become more and more dependent upon others.  Our country is already creeping toward socialism (unless some big changes happen in the next elections), and I’m afraid that the people of the U.S. and the world for that matter are become more and more dependent upon handouts.

I can see us losing a decade or longer, when people become lazy by being too dependent on other.  What if those charity dollars actually prevent some great things that would have happened but won’t now?  How can a small fledgling company compete with the dollars that a big charity with pocket stuffed full of dollars?

You can think of a charity as a business that already has made its money and now is trying to create the product.  There is no sense of urgency and no risk.  But with a small company without the dollars… well, they would be hungry and desperate to make things happen.

The problems with charities is that you never see that effect they have on such small businesses.  I think in small business cases (and farmers), charities are the dream killers.

Now I could be wrong, maybe I’m being too heartless…  I just think that we really don’ t know the true casualties of the various charity organizations.

An example of the potential damage is that continuous charity giving to Haiti (not the earthquake charity work!), has kept the Haiti people dependent on handouts.  Some Haitians claim this has actually hurts the Haiti farmers and other local economic development!

I know this is a controversial viewpoint, and I don’t expect many people to agree with me, or that even I agree 100% with this viewpoint.  My goal with this post is to make you just wonder if it’s a possibility.

Do you have any stories where charities have done more harm than good?  Do you think my theory is way off base?

UPDATE:  After some more focused thinking about what bothers me.  I think it’s the spending the money then it’s gone.  Currently, I’m trying to build up dividend funds to provide a small stream of income, and the giving away of this money sounds like a spending spree.  The frugal side of me thinks that the money should be invested, then a portion of the dividends push towards charity.

Along with most of the commenters below, if the charity does something constructive with the money, I’m okay with the spending.  But of 70 to 90% of the money goes to the running of the charity or wasteful spending, that’s what bothers me.

I really like Sandy L.’s  and BFS’s idea about the money going towards the creation of infrastructure and something constructive… where the charity teach people to fish, instead of giving them a handout.

-MR