Can We Incentivize Charity?

Last week, Oral Roberts University in Tulsa, OK, hosted Religious Liberty Week to support the Green family of Hobby Lobby in their fight before the United States Supreme Court. Tony Perkins of the Family Research Council, Dr. Timothy Shah of the Religious Freedom Project at Georgetown University, Dr. Daniel Dreisbach, author of “Thomas Jefferson and the Wall of Separation between Church and State,” and yours truly, among others, held forums on faith and freedom.

For Values & Capitalism, I had the privilege of conducting a student forum with ORU faculty and student leaders that focused on how free enterprise leads to flourishing in individual vocations. I also participated in a community forum with local business leaders and elected officials which discussed how principles of our Christian faith coincide with free enterprise.

In both events, we talked about one of the most redeeming qualities of free enterprise—that it enables individuals to use their God-given gifts to productive ends, and in turn to bless others with the fruits of the productivity through charity. I call this redeeming, not because it is rescuing the reputation of capitalism, but rather because it redeems us in a manner that reflects the redemptive power of grace. As we discussed last month:

We are made in the image of God. While imperfectly so, we can emulate Him in many ways that benefit those around us. God created everything out of nothing, which in turn means we can create economic value out of scarcity. God redeems us from our sins, and we work towards redeeming others from poverty, ignorance, and disease.

Once we agreed that individual charity is a positive feature of free enterprise, the conversation turned to this question, paraphrased from Twitter: “Given the nature of capitalism, how can we create incentives for profit-driven private owners to ‘share’ their wealth for the good of community?”

Understanding incentives can be a tricky business, primarily because it involves people. Each of us is different, created by God with unique talents, desires, hopes, and dreams. As a business professor once cautioned me, “you can never motivate someone; you can only hope to find what motivates them already.” Uncovering what drives a large population of people and creating a mechanism to properly trigger that motivation is, I will be so bold as to say, impossible.

One of my favorite explanations of why this is impossible comes from the authors of Freakonomics. Economist Steven Levitt tells the story of potty training his daughter. His wife was getting frustrated, so he told her, “I’m an economist, I understand incentives, let me take over.” Watch the video to see what happens next:

As Levitt says, “If an economist can’t trick a three-year-old for more than three days, what hope does the economist have of tricking a whole country of people for even three hours?”

Not only is this task of tricking a whole country of people into being charitable impossible, it also defeats the Christian purpose of charity. We are encouraged to be charitable by observing the individuals in community around us, identifying their needs, matching their needs with our abilities or resources, and finally choosing to intervene in a charitable way that builds Christ-like characteristics within us.

“Free enterprise itself doesn’t make people charitable, but it allows for charity to exist in its purest form.”

This process also develops a relationship between the charitable giver and the receiver that enforces accountability and points the receiver to the real Redeemer. For example, when I was a student at Oral Roberts University, the school was enduring a financial crisis. We wondered if, as students, we would need to find a new school, which undoubtedly would disrupt our education and careers. A donor came forward with a significant financial donation, saying simply that he had known ORU alumni to have great work ethic and honor and wanted to see the school’s mission continue.

I have never met this man, but as someone whose life has been impacted by his charity, I strive everyday to have the work ethic and honorable character that would be worthy of his gift. This relationship and accountability is the unique nature of individual charity that government redistribution can never achieve, and that policy incentives can never recreate.

The man whose charity redeemed my alma mater was Mart Green of Hobby Lobby. Without free enterprise and religious freedom, his act of charity would not have been possible.

Free enterprise itself doesn’t make people charitable, but it allows for this powerful act of charity to exist in its purest form this side of Christ’s Kingdom.

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