The Problem with Charity

There’s been a number of articles lately, exploring charitable impulses of the rich and powerful. There was one article describing people deliberately picking high-paying jobs so that he can give money to charity.

I think such people are self-deluded. Moreover, I think that modern day charities with its black-tie galas and names attached to the donated amounts are simply great tools for self-promotion. Felix Salmon has a similar idea about charities. In short, it’s all bullshit designed to make a giver feel important.

When I was several years into my career on Wall Street and when a certain career trajectory, routine and expectations have set in and certain goalposts have been achieved, I, as I’m sure many thinking, self-aware people at this stage, began to think what’s the point of all of this? Why am I doing what I’m doing and if this is all about money what would I do if I had enough in the bank to not have to work again? A thought of a passive retirement and a move to warmer climates was depressing and nauseating. One can’t just switch from combative and aggressive mental disposition – a Wall Street unspoken desideratum that takes years to nurture and develop – to a laid-back beach bum, hippie worldview. That kind of mental switch just doesn’t exist, not for Wall Street breed anyway. Ideally, I thought, it would be nice to open and run a charity with an asset-management arm. Charitable impulse is a natural evolution path for a seasoned and somewhat jaded and battle-weary Wall Street professional who would like to think of self as a progressive, benevolent and a good-hearted person deep inside. That’s what I thought of myself. However, a sober observation of industry and its business model would compel an honest and introspective person to question the “allocating assets and providing liquidity” rationalization, a popular line of defense among financial professionals justifying their existence to Main Street. This is where, for many, the urge to show the world one’s better side begins to kick in, and it is manifested in an attempt at making obscene amount of money now, so one can demonstrate his generosity and good nature later. I remember the mood on the street back in 2007: many felt something very ugly was coming and wanted to exploit the market to the fullest in order to set themselves up financially, just in case. The worse the things became, and even though I had the right trade on, the more I became burdened with the emptiness of the whole exercise, perhaps even the public damage, however small or indirect, of my actions. With the tools at my disposal (certain synthetic indices) I wasn’t “providing liquidity”, and I wasn’t helping businesses “raise capital”, I was merely placing a bet as one would in a casino with someone else’s money. Thoughts of future charity provided poor refuge: are the people whom I would potentially target with my benevolence – the disadvantaged kids, the poor girls in need of a scholarship, the hungry, the homeless – the very people I’m, however indirectly, fleecing now? Many on Wall Street could easily disassociate the two sides of the same coin – either by willful ignorance or a set of self-rationalizations or a mental block. I tried very hard to do that myself. For Christ sake, my entire career and by extension my entire personality was vested in this industry, the decade of long hours, wasted weekends, all-nighters, personal life structured around work, forgotten hobbies and interests – how could I not seek a justification for my sacrifices and hard work? But there came a point where I couldn’t convince myself anymore.

Those who successfully separate those two sides of the coin but still maintain and cultivate a hint of humanistic streak throw themselves into the charity circle. It is usual for people celebrated for their ruthlessness to want to show their kind and generous side at an opportune time. But let’s be honest: charities depend on whims and moods of the powerful and the powerful tend to be more interested in preserving their legacy by giving $100mln donations to business schools and art causes, than in sponsoring a soup kitchen or a homeless shelter. Those that need charity the most are simply not good at providing Kodak moment opportunity.

I don’t think I’m alone and I’m not the first in thinking about charity from this angle, but perhaps many don’t have much time to put further thought into it: why there are increasing number of people and causes that need charitable help? Why such misallocation of resources in the first place? Food for thought for the powerful and benevolent.


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