Market Power

Musings by an academic economist on the power of markets and the power over markets.

Saturday, January 01, 2005

Private Fundraising

We have been called stingy. President Bush's original public donation was ridiculed by columnists throughout the country. $35 million - what a paltry sum, many said. That works out to be about 12 cents per person. President Bush has upped that amount o $350 million.

Regardles of the amount, these donations understate the total donations given by the US because it only counts the public donations given by the federal government. It does not include private donations and it does not include donations from local and state governments in the US. Bloggers, such as myself and Russell Roberts at Cafe Hayek have made private donations. Roberts wondered:

"It will be interesting to see how it (Phil - the size of private aid) compares to the government aid. Even though that $35 million will discourage some private giving, I'm sure it will be a sizeable number."

Some numbers are starting to come out. From a recent Wall Street Journal article from 12.31.2004 entitled "Global Aid Effort Gains Momentum:"

"Gifts of cash and vital supplies from foundations and corporations continue to stream in. Coca-Cola Co. said it would donate $10 million to relief efforts. The Bill & Melinda Gates Foundation has pledged $3 million. The charitable foundations of J.P. Morgan Chase & Co. and Citigroup Inc. said they would donate $3 million each, while health-care company Cardinal Health Inc. pledged $2 million in cash and personal-hygiene and medical supplies. Northwest Airlines has offered to carry as much as 200 tons of supplies during the next 60 days for relief group AmeriCares.

"Exxon Mobil Corp., which employs about 5,000 people in India, Indonesia, Malaysia and Thailand, said it was contributing $5 million and will match additional employee gifts. The Wal-Mart & Sam's Club Foundation said it would give $2 million to the Red Cross, and will collect customer and employee donations in all U.S. Wal-Mart and Sam's Club stores."

Not counting the Northwest Airines offer, these donations from these private American companies/foundations total $28 million alone. has taken much of its website and transformed it into a centralized website where people can give donations. This is a donation of resources to help raise funds.

Here is an article from this morning's LA Times that lists donation amounts given to various charities. Here's an important quote pertinent to this post:

"The big question is whether people will consider this (their private donations to help the tsunami-ravaged areas) an additional gift or whether it's replacing one of the charitable gifts that they would otherwise have made."

I only speak for my family. The donation we made was in addition to our other charitable contributions.

Just because the federal government in a wealthy country does not initially donate what some people think it should does not make the people in the country stingy. Before judging us, please consider how much we are privately giving in addition to what our governments are publicly giving.