A Question

An old though, prompted by this article in the NYT:

Holly Leonard has been homeless on and off for years. There was a stint in jail and, more recently, a period in a women’s homeless shelter, while her husband slept in their car.

But last month, the two moved into a one-bedroom apartment in San Jose, Calif., complete with a small garden. Ms. Leonard found it on Craigslist while using her Nexus 5 smartphone — a donation from Google that she got from a San Jose nonprofit called Community Technology Alliance.

“People don’t put out ‘for rent’ signs anymore, so the Internet is the best way,” Ms. Leonard said. “You can’t even go get a paper application for a lot of things. You can’t get a job unless you get online.

“Before I got a free phone, it was like you’re almost nonexistent.”

The smartphone giveaway program, though small, typifies the way Bay Area tech companies have started to respond to the glaring homelessness problem right outside their luxurious company campuses: not by donating clothes or serving food, but by using technology.

Now, here's the thing.  While I might take issue with the idea of a government agency doing this, that is based on the premise that government should not be taking money by force from one set of people and giving it to another group without a compelling reason.  In my mind, keeping someone alive (food, shelter, clothing) meets that standard; providing smart phones, no matter how useful, does not.

That said, I do not have any problem at all with the idea that Google or a non-profit organization is doing exactly that.  I think it is commendable in this case; they are taking their money (or, money given to them voluntarily) and using it in a way that they think helps them meet the needs of others. If they believe that buying smart phones for the homeless is the way to go, I would not only say "more power to them", I would absolutely agree. A smart phone, as the article points out, is a game changer.  It gives people not only the chance to survive, but the ability to improve their lot and prosper.

Now, here is a scenario for you to consider.

Suppose that another individual - Joe - and I are discussing this issue.  Joe and I both happen to think that providing smart phones to those less fortunate is a Good Thing.  We disagree on how this should be accomplished, though.

Joe favors the idea of a government program to provide smart phones for the less fortunate.  What level of government we are talking about does not really matter to him.  He thinks that there is a compelling interest in such a program, and that the government should spend up to $X a year supporting such a program.

I point out to Joe that there are already private organizations - Google and the CTA, for example - that are doing exactly that.  I think there are obvious advantages to having a private organization continue to do this type of work, and would rather see their efforts encouraged and expanded upon. To that end, I propose that instead of the government spending up to $X a year supporting a smart phone program, they could instead offer $X a year in tax credits to those who make contributions to existing programs.

Why a tax credit instead of a tax deduction?  A credit is a 1:1 reduction in the amount of taxes owed, which is a much stronger encouragement that a deduction.  More importantly, it makes the amount of spending in each case identical.  Either individuals are making $X a year in contributions to these programs, or the government is taking $X a year and using it to fund their own, equivalent program.

There are two major differences in these competing proposals.  One is the reliability of funding.  Joe can argue that a government program will generally be fully funded, while a program of voluntary contributions may fall short of the desired funding.  US charitable giving ran to over $316 billion in 2012, though.  I think it is safe to say that if there is private funding to be had, these types of programs will be able to find it.

The other difference is who is in control.  In Joe's proposal, control of the funding and the program resides with the government.  In my proposal, control of the function and the program excludes the government.

Here is the question: all other things being equal, why would an individual choose one proposal over the other?

I suspect that there are a number of folks out there who honestly want to help the less fortunate, and would be happy if either proposal was implemented.  If $X a year is going to be spent on smart phones, the important thing is that $X a year is spent - not who has control of the program and the spending.

I also suspect that there are a number of people who would fight, tooth and nail, to see that one proposal or another was accepted, because for them, the issue is not whether or not homeless people get cell phones, but who gets control.