Single payrr is failing all over the world ..

Posted on: August 7, 2017 at 12:06:38 CT

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"Using government data Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents
of each dollar budgeted for government assistance goes not to the
poor, but to the members of the welfare bureaucracy and others serv-
ing the poor. Michael Tanner (1996, p. 136 n. 18) cites regional stud-
ies supporting this 70/30 split.
In contrast, administrative and other operating costs in private
charities absorb, on average, only one-third or less of each dollar
donated, leaving the other two-thirds (or more) to be delivered to
recipients. Charity Navigator (www.charitynavigator.org), the
newest of several private sector organizations that rate charities by
various criteria and supply that information to the public on their
web sites, found that, as of 2004, 70 percent of charities they rated
spent at least 75 percent of their budgets on the programs and serv-
ices they exist to provide, and 90 percent spent at least 65 percent.
The median administrative expense among all charities in their sam-
ple was only 10.3 percent.
The basic reason for this large differential in costs between pri-
vate and public agencies is not difficult to see. Depending largely on
voluntary contributions, most private agencies are under strong
pressures to operate efficiently and keep costs low. Benevolent citi-
zens naturally wish a large fraction of their donations to reach the
needy, and many will not keep donating to an agency that does not
accomplish that. Donors can select among private nonprofit chari-
ties, and competition between charities for donations tends to insure
efficiency. Public aid agencies, in contrast, are budgeted their funds
by Congress, which obtains them through compulsory taxation.
These agencies are not under competitive pressures to keep costs
down that are remotely equivalent to those of private charities."

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