It’s 3 pm in Houston on a late summer day. Late summer in Houston means October. I am standing on a shadeless sidewalk near the spot where the yellow school bus usually drops off my kids. The ambient air temperature is approaching 100 degrees Fahrenheit. For those of the dear readers who live in Europe and use the Celsius scale, 100 F in American temperature means hot, very, very hot. I look down at my toes and wonder if the cheap polyurethane coating on my Chinese-made Nikes would finally show its true colors and melt. The bus arrives and interrupts my disdainful contemplation. Noise precedes and diesel fumes ensue. The door opens and my kids start filing out down the steps. They are holding socks. Many bundles of colorful pairs of socks. Uganda 1 : Yours Truly 0.

Dad, look what I got today! My youngest one puts a pair of socks in my hands. What is this? Before I could ask aloud, my second bus rider shows up holding several bundles of three pairs each. At this point I know something’s up. My oldest one comes out of the bus last. Being the oldest consigns him to the back of the bus under the latest Covid safety protocols. It takes him a while to get out. But at least we outsmart the virus. Nevermind. He comes out angry and half-crying. Someone at school stole his money that day and he couldn’t buy any socks. At this point, I need to perform parental due diligence. What do you mean they stole your money? Was it all of your lunch money? Did you boys eat lunch today or were you on a shopping spree for socks? What is happening here? I look at them with accusation. Two of them have their hands full of socks. The third one is empty-handed and seems like he’s ready to fight me. Uganda 2 : Yours Truly 0.

My internal investigation concludes on the way to the house. Apparently, the school held a fundraiser. Each student purchased as many socks as they could. Part of the proceeds were earmarked for Uganda. My younger two loaded up on socks. My oldest one tried to buy some, but while he was looking at socks, one of his classmates stole his money from his backpack. Wow. This was my first Eureka moment that day. I could turn the sock-buying fiasco into a teachable moment about human nature. But where do I begin?

So, do you know who stole your money?, I ask. He didn’t know for sure but he suspected it was a boy named Charlie. Did you ask Charlie about the money? He had asked Charlie right away but Charlie said it weren’t him. My son was nonetheless pretty sure that it was Charlie who swiped the cash. Did Charlie buy any socks? No, apparently Charlie did not buy any socks. Uganda 0 : Charlie 1. Look, son, I begin my improvised lecture. Every thief (like Charlie) is also a liar. How so?, he asks. Well, think about what would happen if Charlie didn’t lie and admitted to stealing your cash. He would have to give it back, right. Which would extinguish his thieving career in its infancy. Therefore, if Charlie wants to be a successful money thief, he also needs to be a very capable liar. Thieving and lying always go hand-in-hand. There’s no other way. Thieves always lie. My son looks at me with a relaxed expression. He is not mad at me anymore. His brain is processing my pearls of wisdom. I feel encouraged to continue. Thieving and lying is sort of what our politicians do for a living. They thieve from us and they lie about it, all the time. They get filthy rich, but they call themselves public servants. Sometimes they lie to us just for fun. To keep their lying muscles in shape. Maybe Charlie will become a politician, my son suggests timidly. Maybe he will, son, maybe he will. My parental pride is rising. My kid is clearly getting it. This is real-life education at the price of a pair of socks. Uganda 2 : Yours Truly 1 : Future Charlie : $10,000,000 in untraceable Bitcoin. But that’s another story for another time.

How did they convince you to buy socks in the first place? You kids only have a little bit of money left over from lunch, and the little money you have, you normally want to spend on computer games and tokens. How did someone convince you to spend it on socks instead? Don’t you have plenty of socks at home?

My younger two kids didn’t have any answers. They said the socks just looked cool, and their teachers told them to buy socks, and all the other kids were buying, so there you have it. They followed the herd all the way to Uganda. My oldest one attempts to answer. The conversation goes something like this:

— Well, dad, the money is not for socks, it is for education.

— What education? School is for education and we already pay for it. These socks are for your feet.

— I mean, it’s not for education, it’s for charity.

— Okay, what kind of charity?

— It’s for Uganda.

— Is the charity name Uganda? Do you know what Uganda is? Were you buying socks for students in Uganda?

— Of course, I know Uganda (note: unlike his brothers, he actually does know Uganda). Well, dad, Uganda doesn’t need socks. The people in Uganda are educational. I mean, they are educationally-minded. And we are sending them socks.

— Why are you sending them socks if they don’t need socks? Why not send them educational books? Or why don’t you just send them your sock money directly to their school?

— Well, that’s not charity.

— We need to talk about charity then.

And so we begin.

In the United States, charity is a major industry. A lot of people make a living by working for charitable organizations. There are two main types of charities in America. One is church-based spiritual charities. These have a basis in history and tradition, but they nonetheless operate in reliance of the same tax-exemption rules as the rest of the charitable industry. The other type of charities are cause-based organizations. These are the likes of “let’s feed the kids in Africa” or “raise awareness of breast cancer” charities. There is also a third type of charity which is government welfare. For some reason it is viewed differently than the other two. But that is also another story for another time and it may one day involve our friend Charlie.

The typical private charity setup includes a cause, a solution and a proposed budget. The cause has to be something which is perceived as socially significant. The proposed solution is typically irrelevant except for marketing purposes. And the budget has to be as obscene as the donors would bear.

Many charities are meaningful and necessary. They serve a useful purpose. I am speaking from the standpoint of someone who has never had to use the services of a charity, even though I have been a starving pedestrian in the months and years after my arrival to the US. So it is easier for me to dismiss their social utility. Yet, I believe that every civil society needs to have and encourage charity. At the same time, I do not know anyone who has been materially benefited by a private charity. I know people who have benefitted from government money. But I am yet to meet someone whose life was materially impacted by private charity. We hear stories in the media about people whose lives were turned around by some charitable organization. These stories are as abstract and distant as the freeway billboard images of people who won a lottery jackpot.

Universities and large corporate hospitals are two types of very suspect charities in America. They operate within the tax environment for regular charities, but the majority of them are large money-making operations with lots of high-end assets, huge bank accounts, prime real estate, intellectual property and extremely long payrolls. The non-profit status in their case means that they do not distribute their profits to shareholders, but instead spend the profits internally for the benefit of their stakeholders which usually means their upper management and a few other select employees. Hospitals actually could have shareholders, in which case they set up charitable foundations on the side to collect and manage donations. The foundation then spends the income at the hospital for treatments. It would be the same as a lawyer setting up a charitable booth and then using the donations to pay himself for legal services. What the hospitals are doing is no different than soliciting another revenue stream in the form of donations for people who would not be able to be their customers otherwise. It is quite clever. These solicitations intensify every Christmas season.

The world is full of misery and no amount of money can make a meaningful difference in the general outcomes. Some of the stories put forward by charities are phony. Others are over exaggerated. At the same time, there are real stories out in the world in which suffering is beyond any comprehension. You won’t see these brutal stories in the media except in the form of statistics. Don’t drop hard-earned money into an obscure cash collection bin or bank account. Take care of your own needs first, then make provisions to help your own children, then make provisions to help your other immediate family and your friends (in that order). Only when all of these needs are securely met, then you can open up your wallet to charity.

Clearly, there is a psychological benefit to charity. Doing good makes you feel good, even if it involves some unseen act toward a stranger. But always remember that if you are in good shape today, it doesn’t mean you will be in good shape always. Provide for yourself first, and only then think about helping others. You can’t help anyone if you are in need of help yourself.

The conversation with my son had actually ended many paragraphs ago. I had taught him enough. I usually try to keep unhappy topics away from him. There is very little happiness to be taught when the topic comes to money changing hands. Whether for-profit, or not-for-profit a/k/a charity. Kids instinctively avoid lessons in unhappiness. They don’t need to be told that the socks will not change the educational picture in Uganda. They won’t believe it, but will take a mental note and assess your teaching motivations. As they should. And they will rightfully conclude that the person teaching them is sus. What ‘sus’ means is another topic for another time and it may again involve our old friend Charlie.

Written by : Ivo Djambov

Ivo Djambov is a lawyer focused on corporate transactions and investment matters. He has been in private practice and in-house corporate roles since 1998. His career first started in Europe and since 2004 he has been working in Houston, TX, USA.

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