Sophisticated Selfishness: Selflessness

Judge Smails: “I’ve sentenced boys younger than you to the gas chamber. Didn’t want to do it. I felt I owed it to them…”

http://www.youtube.com/watch?v=MA2NDf9LdDE

Caddyshack, 1980

Nature, depending on who you are, can look like a divine symphony replete with harmony, or a heartless jungle where survival of the fittest allows for the predation of the weak. Warning:  the appearance of the outer world bears a striking resemblance to your inner world (think: holograph). So, if you think dog-eat-dog, you see dog-eat-dog. Conversely, if you think rainbows and butterflies … well, you get the point. And, while this may not always be the case, it is pretty close. One thing that appears to be apart from perspective is survival. Often this natural mandate is confused with selfishness. But because all life exists as a matrix of interdependent connections, what an organism does for its own survival (selfish as it may seem), contributes to the whole of nature. This, by the way, appears fractal as you span from a single cell, to humans, to the internet connecting all of us making us in a way, a single entity. This natural ‘selfish’ motive is the mechanism whereby free market capitalism functions: The predictability of all parties wanting to serve themselves allows for an order whereby an entire economy can function. This leads us to this thesis: The most evolved and sophisticated form of selfishness, which is the natural order of things, is being charitable.

One way that we humans create beauty for ourselves (which of course translates to witnessing beauty in our world) is to be of service. Being of service most often comes in the form of being charitable,. That is: giving in some way to another life form or organization. The most common forms of charity are giving time and/or money to what appear to be ‘worthy causes,’ like the Kony 2012 campaign, for instance. It should be noted, however, that unlike Elvis Costello, not everyone’s aim is true. While most enjoy seeing positive results stemming from charitable contributions, there is an archetype which is only concerned about appearing to give, or meeting a quota based on social expectations for giving. But, as long as the giving is given, does the quality of the selfish motive behind the giving matter? It does indeed, as those whose goal is altruism rather than posing tend to be more elegant in their approach to being charitable. The sophisticated selfishness that leads to the giving tends to lead toward sophisticated approaches to giving.

There is another human truism that is often counterproductive, which speaks to well intended actions – ‘a path paved to hell with good intentions’ – and the harm that is often done as a result.  For example, there is an extremely fine line between helping and enabling.  Parents dance around this line when helping kids with homework.  Too much doing, and sure, the kid gets an A, (if my wife helped anyway) though they might not have learned the material.  No help at all and the child might never grasp what the necessary knowledge to keep pace with the rest of the classmates.  In my hood, Santa Cruz CA, we have many programs and services for the homeless folks, a function of the electorate out here being largely comprised of bleeding heart liberals.   The noble goal is to help them get off the street in a best case, and provide food and shelter in the cases where the street is where they are destined to be.  Santa Cruz is sophisticated in it’s methods with an eye for not enabling in deliberate ways:  Identifying the homeless using the services, establishing requirements for continued help (drug tests, no criminal activity, etc), raising money, food and awareness from the community to keep the programs going, just to name a few.  But those who fall out compliance with these merciful and rehabilitative programs end up as panhandlers in the outdoor mall that anchors the commerce in the city.  And they wouldn’t panhandle if they weren’t successful.  So those that give the people money are truly hurting them, enabling them to buy drugs, do crimes, and/or not follow through with employment opportunities.  Not sophisticated giving!

So at this point, it would not be hard to conclude that I am bastard, right? I am saying that charity is selfish, since often we are charitable in order to feel better about ourselves. And, I’m suggesting that you think twice before giving, since you might be inflicting harm… Well, while it is true that I can be an bastard (I am human, after all), it is not true that I want to discourage you from giving. What I am advocating for is that you be sophisticated in your method of giving, in a couple of ways: 1. If you are giving to a larger organization, be mindful of how much of your donation is hitting the target and how much is supporting the administration of the ‘nonprofit’ entity. Do you know what you are supporting when you throw money at the Kony 2012 campaign through ‘Invisible Children’? Ideally you want as much of your money going to the cause as possible. Sites like http://www.charitynavigator.org/ can give you this information, and you will feel even better about yourself when you know
you were effective in your charitable donations. 2. Be mindful about enabling. At the risk of alienating you with parables, the point here is not to hand out a fish for dinner at the expense of a fishing pole for dinners. Charity must be more sophisticated in rehabilitating underlying habits of people, villages, towns, etc. To the degree that we the people can do this, our world will improve … quickly.

As it is the theme of Occupy Finance to find solutions to problems through bypassing large institutions, benevolent as they may be, there are some outside-of-the-box methods of being charitable that can do tremendous good. If you anticipate running into hungry homeless people in your travels, bring some apples with you. When you feed a starving homeless person, 100% of your charity is received by the one in need, hence very effective charitable giving. This is a trend that you can start in your own neighborhood. Ask yourself: Are you feeding, or enabling?

When kids are selling candy or magazine subscriptions to subsidize books, facial tissues, sports, arts, etc., by all means help them. BUT! Rather than purchase their goods, donate the money directly to the school or the entity within the school, so that 100% of your donation goes to the cause, rather than the production and distribution of the goods, thus being effective in your charitable endeavors!

And if you want to get the MOST sophisticated bang for your charitable buck, be on the lookout for ways you can help to financially rehabilitate people. When you contribute to the financial rehabilitation of an individual, you contribute to the community as well:  with a means to bolster their standard of living, it helps many others as well, through the economic multiplier effect.  Micro loans are one of the most exciting developments enabled by the internet for third world countries, and they have excellent repayment records. So your most sophisticated charitable gift ends up not being a gift at all, but a loan. A lesson in how to fish with a borrowed fishing pole.  Giving without enabling. And, if you give in this way – this sophisticated way – you deserve the interest you can charge on your loan,. After all, this preserves borrower dignity. It went from a handout to a business transaction. For Micro loans, check out http://www.kiva.org/. And, don’t feel limited to just help out distant third world countries. Peer to peer lending is opening  the door for would-be philanthropists to become a new kind of banker, an altruistic agent of development in their own back yard, their own social group, their high school graduating class, or just about any affinity group that resonates with this new age banker.

And lastly, a tip for those who look at the world and only see a jungle: Look to your belief systems to eradicate those that are incompatible with beauty. The sooner you become the change that you want to see, the sooner the world will change. But be careful, wondering around the dark recesses of your psyche is dangerous business, like wandering through a dark alley alone at night. You could get jumped!

Tim Handley

Feel Good Story

Willy Wonka: Where is fancy bred, in the heart or in the head?

Willy Wonka and the Chocolate Factory – 1971

STANFORD GRADUATE SCHOOL OF BUSINESS—In rural India, a loan of $50 can spell the difference between poverty and economic self-sufficiency for an entire family. Such is the power of microlending, a form of finance that is helping to eradicate poverty in countries all over the world. Vinod Khosla, founding CEO of Sun Microsystems and a partner at the venture capital firm Kleiner Perkins, calls it “one of the most important economic phenomena since the advent of capitalism and Adam Smith.”

Speaking at the conference on Global Business and Global Poverty at Stanford Graduate School of Business, Khosla used the Indian organization SHARE Micro Finance Limited (http://www.sharemicrofin.com/) to illustrate microfinance. SHARE targets rural women in India whose per capita income is less than $8 a month—well below the World Bank poverty line of $30 a month. The organization lends each woman $50 to $100 to fund entrepreneurial projects proposed by the recipients. For example, a woman might open a market tea stall or small grocery or buy a rickshaw or bicycle to transport the wheat grown by her family to market. The rickshaw would allow her family to retain 50 percent of the profits from the wheat that would have gone to pay another transporter. On the high-tech end, some women have opened Internet kiosks that have become profitable within the first three months and have provided a livable wage within six months. “There are hundreds of examples like this,” Khosla said.

In what Khosla calls a “virtuous pyramid scheme,” SHARE lends money to eight-member women’s groups. Because they are all part of the same community, the group members are under strong social pressure not to default. “It’s embarrassing to default, and if one person does, the others have to make up for it,” he said.

In part because of this sense of community, SHARE has an impressive repayment rate on the more than $71 million it has disbursed in more than 3000 villages of India since 1994. Of its 197,000 clients, 77 percent have experienced a significant reduction in poverty over the past four years, and 38 percent are no longer considered poor, statistics representing a snapshot of 10 years since it’s inception, while the positive trends have since continued.

“More important,” said Khosla, “if you talk to these women, they’re empowered. People who are first-time borrowers are always looking down, their head covered with a sari. Anyone who has been borrowing for more than three years looks you straight in the face, eye-to-eye. So a few years of this not only changes their financial status, but also their mental attitude. I have no doubt that this will have all kinds of other consequences.”

What should make microfinance attractive to investors, Khosla said, is that lending organizations such as SHARE operate on strictly commercial terms, make a profit, and are scalable. “For a small amount of equity, such organizations are leveraging a lot of resources, not only in India, but in Pakistan and all over the world,” he noted.

Critics had argued that lending money in $50 increments would be uneconomical and would lead to even greater burdens for the poor. The success of the more than 6,000 institutions doing some form of microfinance today has proven this wrong, said Khosla. “The phenomenon can draw economic resources on a worldwide and competitive basis,” he said.

Khosla urged listeners to join in the movement to remove regulations currently prohibiting microfinance organizations from obtaining necessary credit.

Khosla said his own attitude has come a long way since 1993, when he first went to India to address global poverty and felt overwhelmed by the magnitude of the problem. “It’s taken only a few people to dream the dream of having an impact on half a billion people, and to follow through and start making that happen. It’s tremendously exciting and I think all of you should get involved,” he urged listeners.

It is amazing to think that lending $50 to $100 can make such a huge difference to a single person’s whole life, but this is the reality, and the opportunity that exists with microlending.  In an area where wages are in the neighborhood of $7 per week, you do the math.  You are injecting two months worth of income that can be used to create a business that increases their personal wealth, which increases the quality of life for all those living in the poverty stricken village… for $56 dollars.  And you get paid back.  With a handsome interest rate.  And this is the ultimate form of charity.

Tim Handley