There have been a number of interesting pieces on charitable giving this holiday season. Peter Singer estimates how much individuals ought to feel morally obliged to give. Arthur Brooks argues that conservatives and the working poor are more inclined to charitable giving than society at large.
All of these news stories, as well as the supernova of Buffett-benevolence, tend to focus attention on charitable giving to the poor. However, some estimate that only 10% of all charitable giving in the U.S. helps the underprivileged. This has led to Congressional hearings on the topic, with some Republicans complaining about the nonprofit status of hospitals with low rates of charity care, and some Dems questioning donations to elite universities:
Representative Thomas and others are particularly vexed by nonprofit hospitals, often noting that data from the American Hospital Association calculated that their average spending on uncompensated care was 4.4
percent of their costs in 2002, compared with 4.5 percent for their commercial cousins. Representative Charles Rangel of New York, the senior Democrat on the Ways and Means Committee, has asked whether a better target may be universities, which sit on tens of billions of dollars in assets while tuition increases are outpacing inflation.
A big question here is: what’s behind these dynamics? As I suggest below the jump, a lot has to do with a pernicious interplay between increasing inequality and pervasive use of ranking systems as measures of quality for credence goods. In fields like education and health, where the quality of one’s experience is very difficult to evaluate objectively, ranking systems are forcing leaders into an arms race to acquire ever more resources.