Give Wisely: How Knee-Jerk Donations Can Cause Harm

It seemed like the perfect story.

A woman ran out of gas and was stranded alongside a New Jersey highway at night. That is, until a man came to help—a homeless man…who gave her his last $20.

So thankful the woman (and later her boyfriend) were, they started an online fundraiser to help this Good Samaritan who himself was in such need. The goal according to the campaign: “…to get him first and last month’s rent… , a reliable vehicle, and 4-6 months’ worth of expenses.”

In this Nov. 17, 2017, file photo, the homeless man (left) and couple pose at a Citgo station in Philadelphia.

The public responded. Big time. Countless donations accumulating to a whopping $400,000.

The story made headlines across the nation.

Now about a year later, this story takes a sharp turn for the worse: All three individuals have been arrested for fraud.

The story about running out of gas? According to the prosecutor, it was made up. (A text to a friend retrieved from the woman’s phone read: “I had to make something up to make people feel bad.”) Also revealed were extravagant purchases and trips to the casino made by the couple.

From what appeared to be an act of selflessness from a man with nothing, the narrative took a jarring reversal into acts of decadence fueled by exploiting people’s generosity.

One CNN commentator excoriated this couple on air. Seeing the rush of headlines across the country once again, I suspect many people have similar sentiments.

Today I’m filming a documentary-series about homelessness and the rise of the Minneapolis tent city.

Minneapolis tent city in October

As such, I’ve followed the above saga with interest. Yet despite understanding the anger about this alleged fraud—how it can harm others holding legitimate fundraisers—this hasn’t been my main concern. Instead, my curiosity has been aimed toward why people gave so much money. Being compelled to give is wonderful, but once seeing the campaign had raised tens of thousands of dollars, why did thousands more people follow suit with hundreds of thousands of dollars to requests not exceeding $25,000?

We know a large sum of money suddenly in hands unfamiliar with such wealth often leads to a bad outcome. But the psychology of giving and the power of a good story sometimes has us dismiss the practical in favor of the desire to help. So, people give to fulfill that desire even if reason would suggest it a bad idea. This kind of knee-jerk giving, I believe, ironically contributes to the problems meant to be addressed. This has been pointed out in bloated, under-performing, highly-financed school districts across the country, whose communities continue to support tax increases thinking more money will improve things. And I see it in the work I’m doing with homelessness now, where—just as was the case with the story above—people give vast amounts of money, goods, and time whether needed or not. It’s a point I’ll address in my upcoming documentary, because of the harmful role misallocation can play.

In the story above, the factor of the $400,000 did more than just add drama to this saga. (It’s more attention-getting when the couple spends $60,000 on a luxury car rather than $600 to pay bills.) It potentially took money from others in need. And the small fortune may well have played a part in actually creating this saga’s turn for the worse.

Seen in another portion of the texts retrieved from the woman’s phone was the statement, “…the gas part is completely made up, but the guy isn’t.”

She and her boyfriend knew the man and knew he needed help. So they made up the gas story. They didn’t know the campaign would go viral. When it did, I could imagine how a well-meaning plan could morph into them justifying their large cut by thinking, “Well, we’ve still raised $100K for our homeless friend.” In other words, they may not have gone into it thinking of the riches they’d swindle. They became swindlers when the money overwhelmed them.

I don’t know this to be the case. Perhaps the true motivations will come out in the trial. Either way, it’s important to resist the knee-jerk judgement of these three people for this reason alone: Focusing scorn on them has us avoid the potential role (in this story and many others) of knee-jerk giving.

As we approach the holidays, as we receive year-end fundraising letters in the mail, and as the need grows for donations and volunteerism with our modern economy and technologically-connected world, take a minute to assess whether your giving is allocated wisely.

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