[Grovenet] Reflections on Minority Rule

Fri May 18 16:11:50 PDT 2007

Were those really "public philanthropies"? 

I ask because there was a bit of a scandal in California some years back: in
the 1980's or 90's. A very much up-front for-profit company was selling
collection devices to be displayed at the cash registers of restaurants and
stores. They were eye-catching gadgets such as a big funnel-shaped device
into which you dropped a quarter and is rolled on edge around and around in
plain view for quite a while before dropping into a receptacle below. 

The companies sold those devices to private individuals who then added
signage and placed them in restaurants. The signage declared that the device
was for the purpose of collecting contributions some worthy cause. Under
California law at the time it was perfectly legal for as little as 2 cents
of every dollar collected to be actually passed on to the charity. The
remainder was income for the individual purchasing, placing and servicing
the collection devices. 

All quite legal and above-board. If one asked what percentage of his/her
contribution was going to the charity they could easily find out. Some of
them even said so in the fine print on the label ("...$0.02 of every dollar
collected goes to ....") 

Of course, most people don't ask the important question about how much of
their money goes to the cause. After all, it is only a quarter or a dime or
whatever coin was required, and it's cute. 

The end result was a bunch of new laws that mandated larger percentages go
to the organization. That resulted in lower contributions to those
organizations, because the people handling the devices simply quit doing it.

At least one fellow in Sacramento did keep his devices in the restaurants in
the area and he did not give one penny to charity quite legally. He simply
took the charity's name off of the device and didn't pretend it was for
anyone's benefit but his own. He reported that his collections didn't drop
one penny doing that. People still dropped their money in for the
entertainment or in the belief that it was going to some worthy cause even
though there was nothing mentioned. 

I don't know how long that lasted because a bunch of stores and restaurants
bought their own devices to collect money with! As I recall that did result
in some customer backlash when a few journalists blew the whistle on the
practice. I also suspect that "blew over" and those who wanted were able to
keep right on collecting odd change. 

The one who never missed a beat and made lots of money was the company sold
the devices! 

On the other hand when I lived in Santa Cruz, CA a good friend had a teenage
son who needed a heart transplant. He had been born with a defective valve
and  was slated for valve replacement after he finished growing, but the
valve failed completely and he lost a great deal of heart muscle - too much
to survive on for long. Dad was self-employed and had no medical insurance
(familiar story?). His friends launched a campaign with collection boxes at
restaurant and store cash registers and raised close to half a million
dollars in about six months. People are generous when they understand the
need and have confidence in the process. 

That's a huge lesson for government. People will fall all over themselves to
help if they believe in the process, even if it costs them money, lots of
money. But they won't give a single dime without protest if they feel
they're being robbed. 

That's part of the sickness that's blighting the whole forest we call
America that I was talking about before. Cure that, and money for important
services and programs won't be a problem, ever again.

Ron D'Eau Claire

-----Original Message-----
From: grovenet-bounces at rdrop.com [mailto:grovenet-bounces at rdrop.com] On
Behalf Of David Morelli
Sent: Friday, May 18, 2007 1:50 PM
To: Forest Grove local interests list
Subject: Re: [Grovenet] Reflections on Minority Rule

On May 18, 2007, at 11:20 AM, Martha Khoury wrote:

> Maybe we should go back to the subscription fire service that they
> used to have. That way, those who are willing to foot the bill will  
> get the service. --Martha K.

That does work, and it is fair.  Likely it would be more expensive  
than the current system.

For example, I just did some research on a category of public  
philanthropies.  They solicit donors and provide a service to their  
target group.  In this case the target group was American veterans.   
The veterans received anywhere from $0.02 to $0.60 from every dollar  
collected.  The rest went to the administrative overhead and the cost  
of solicitation.

They were the "free market's" response to taking care of our service  
heroes.  Private donations and direct support of our people without  
the inefficient hand of government intrusion.  And thanks to the  
efficiencies of the free market, the people who put together the  
program, and the people who advertised and solicited the donations  
got to keep anywhere from 40% to 98% of the proceeds.

So, while it does work, it isn't necessarily less expensive.  I doubt  
that the percentage cost of collecting our city taxes and the whole  
of city administration is as great as the percentage cost of  
soliciting/collecting the donations and the administration of the  
program.  One was a $121 million per year organization and the  
director pulled a $230,000 salary plus benefits.

David
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