This week Blizzard Entertainment announced a new World of Warcraft virtual pet for charity. Last November they had introduced a $10 pet and promised to donate half of the proceeds to the Make-A-Wish foundation. The results were:
- They raised $1.1 million for Make-A-Wish.
- Bloggers everywhere were outraged that they would dare do such a thing.
Why such anger? A part of it stemmed from the fact that Blizzard only offered 50% of the proceeds rather than 100%. To some people, you either do something for profit, or you do something for charity, and you should never mix the two. A similar type of outrage gets directed toward nonprofit CEO’s for making, say, a $500k annual salary when they could easily make twice or more in the corporate world. “You only took a 50% pay cut? Imagine how much good you could do if you took a 95% pay cut and lived at a $50k level like the rest of us!”
I find this kind of black-and-white thinking unhelpful in trying to address real-world problems. To illustrate the shades of gray, let’s consider the following scenario — a disaster has struck a neighboring town, and they need food badly. You want to get involved, so you buy food and bring it to the stricken residents. How do you price the food?
- Free / no cost.
- Your cost basis (no profit).
- 10% markup for your own profit
- 200% markup for profiteering
- 200% markup and sabotage other relief workers to drive up demand for your food.
We’d all agree that the list goes in decreasing order of goodness, and at some point it stops becoming charity and crosses over to evil. But for someone who was planning one course of action, moving a notch up the list is an improvement. It might not be charitable in an absolute sense, but it’s more charitable.
In his post Just Lifestyle: Four Options, Gary alluded to this story about Mother Teresa. A rich woman was moved by Mother Teresa’s work and wanted to follow in her footsteps. Sensing that it would be too big of a change and hard to keep such a commitment, Mother Teresa asked how much the woman spent on her sari. “800 dollars.” Mother Teresa then suggested the woman spend only $700 on her next sari, and give the remainder to the poor. And slowly reduce from there.
Giving is not an all-or-nothing affair — just move in the right direction. Lately I’ve been thinking about how to reallocate investments, and I came up with the following list in order of decreasing goodness:
- Direct charitable contributions
- Invest in kiva.org, making no profit and creating microloans for the poor
- Invest in microplace.org, making some profit and creating microloans for the poor
- Invest in stocks, bonds, and CD’s, making profit (possibly)
- Squander it in a historical reenactment of The Prodigal Son
Hey, we all gotta start somewhere.