Matt Yglesias

The Case Against Pandas

Giant Panda (wikimedia)

Englishman tries to earn the ire of panda-lovers everywhere:

Conservationists should “pull the plug” on giant pandas and let them die out, according to BBC presenter and naturalist Chris Packham.

“Here’s a species that, of its own accord, has gone down an evolutionary cul-de-sac,” Packham told Radio Times magazine.

The 48-year-old believes that money spent on conserving the panda would be better invested in other animals as the species is not strong enough to survive alone.

I think that’s probably true in some kind of narrow sense. And by the same token, one might argue that it’s wrong to expend funds on restoration of architectural landmarks when the funds might be better spent improving infrastructure in poor countries. But there isn’t actually a lump sum of charitability in the universe and not hard to understand why it’s easier to raise funds for preservation of cute animals than non-cute animals. The question is whether panda-related endeavors generate a net surplus or a net deficit of funds for non-panda conservation activities. My understanding is that it’s a net positive, that programs for “flagship” famous animals help subsidize work on lesser-known species.

Still, on an individual basis I think the critique holds up. I own some stuffed pandas, I like to visit the pandas in the zoo, I used to have a panda-based Twitter icon, but personally I try to donate money to more high priority causes.

America’s Mad Obsession With Giving Money to Already-Rich Universities

Via Felix Salmon, an eye-opening chart:

If you can’t think of a charitable institution that could use your money more than the already-richest university in the world—one that overwhelming educates the children of prosperous people—then you’re obviously not thinking very hard. If you want to support worthwhile education endeavors, find a charter school or an obscure local college that’s doing a good job with kids from underprivileged backgrounds. Or give money to improve public health in the third world, or to an effective politics/advocacy organization working to improve American public policy. Anything, really. Just not an outfit that’s already got way more money than every other nonprofit in the country.

HMC FAIL

When I was in college, people used to joke about Harvard being a gigantic hedge fund that just happened to run a university as a sideline. These days, the university still has its faculty, its students, and (most importantly of all) its reputation, but the hedge fund seems to have run into a ton of trouble. It’s not only—or even especially—that they’ve lost money in the downturn. Rather, the crux of the matter is that some of their more exotic investments seem to have got them stuck in a nasty liquidity squeeze that’s forcing budget cuts.

Felix Salmon remarks:

And maybe Harvard’s alumni might start giving a lot more now than they have in the past. After all, until recently, any giving from alumni was dwarfed by the investment gains of the endowment, and so the incentive to add another drop to the bucket was greatly reduced. Now, by contrast, cash from alumni is desperately needed to meet the university’s annual liquidity requirements. It might even feel better, giving money when you know it’s going to actually be spent, rather than giving money simply to augment some gargantuan endowment.

My advice to my fellow alumni would be: Don’t.

If you want to give money to an educational institution, do some research and find a charter school in your metropolitan area that’s obtaining good results with a demographically unfavorable group of kids. Or find help our a regional public college of little repute that provides valuable educational services and could really use the money. Sure, if your checkbook is fat enough to finance a research endeavor that could make a major contribution to discovering an HIV vaccine or something it might make sense to invest in a world-famous university. But as a general matter, fancy schools that are already rich and famous and overwhelming serve students from privileged backgrounds are not a good target of charitable giving.

Obama Budget’s Impact on Charitable Giving Will Be Minor

Barack Obama has a plan to limit itemized deductions for people in the very top of the income tax brackets. This will only effect a very small number of people and the primary impact would be to reduce the extent of the tax break that very rich people get for living in very large houses. But there’s no denying that it would also reduce the extent of the tax break that very rich people get for giving money to charities. Naturally, the very rich and their political allies prefer to emphasize the charity angle over the big house angle. But as this Center on Budget and Policy Priorities analysis makes clear the impact on charitable giving would be small. Their basic math goes like this:

Itemized deductions as a fraction of total charitable giving (0.622)

x
Fraction of itemized charitable contributions affected by proposal (0.182)
x
Increase in after-tax price of giving for those affected by proposal* (0.113)
x
Elasticity of giving with respect to a change in its price** (-1.00)
=
Reduction in total charitable giving (-0.013)

So you’d be talking about a slightly larger than one percent decline in charitable giving. Against this, they observe that the budget contains two major provisions that should be favorable for charity groups. One is affordable health care for all Americans. CPBB observes that “Health reform will greatly reduce the burden on non-profit organizations to provide free health care, thereby offsetting to a significant extent the overall drop in contributions.” The other is the restoration of the estate tax. Rich people dying has always been an important source of big-dollar charitable giving, and the taxation of very large estates has added an extra incentive to dedicated more funds to legacy-building charitable contributions rather to one’s progeny. So what the Obama tax plan taketh away with one hand, it giveth back with the other.