If He Defunds It, They Will Come: Charitable Giving Under Trump

President Trump’s proposed cuts to the  The National Endowment for the Arts and the National Endowment for Humanities have left a bitter taste in the mouths of many. Spokespeople on the left predictably jumped to defend these supposedly indispensable programs. After all, if the government isn’t paying for these sorts of programs, who will?

As it turns out, Chance the Rapper has stepped up to the plate by crafting the New Chance Arts and Literacy Fund, benefiting arts education in Chicago Public Schools. And according to the economic theory of the crowding out effect, he probably won’t be the only one.  

For those finding themselves furious with Trumps potential cuts, the crowding out effect can offer a source of comfort. The theory goes that as government becomes involved in a certain industry or other economic matters, private actors will be forced to back out as they are unable to compete.

The inverse is also true, however. As the government backs out from certain areas, such as funding for the arts, private actors will come back in and fill the gaps that the government has left behind. Not only will private actors do the work that the government was previously performing, they will most likely do a better job. Here are three reasons why:

  1. Hard budgets. In the private sector, individuals are strapped with what is known as a “hard budget.” This means that if they go broke, they lose precious funding. It offers a powerful incentive to keep control of one’s financials and make sure that investments are worthwhile. The government, on the other hand, has what is known as a “soft budget,” meaning that if the government runs out of money, they can simply ignore it and do something like raise the debt ceiling. Hard budgets ensure that private investments are more likely to go where they will do the most good, so as not to be wasted.
  1. Local attention. The federal government is notoriously bad at knowing how to address the needs of everyday people. The needs and desires of those living in Detroit are bound to be different than the needs and desires of those living in San Clemente. Federal agencies have a difficult time bending to these realities due to their high-level nature. In the case of the arts, local programs are more likely to understand what specifically those in their area are more likely to appreciate. This local knowledge allows for a better application of the arts than a blanket federal system.
  1. Better art. With local control being brought back, it is more likely that actual connoisseurs and professionals will be involved in finding and funding art. Think about it–Would you rather have a government bureaucrat deciding what to fund, or an actual artist such as Chance the Rapper?

Just because art might not be funded by the government doesn’t mean that it won’t get funded at all. In fact, it may be funded more fully and effectively, such as the Meals on Wheels program. When Trump announced cuts federal aid to Meals on Wheels (which only totaled 3% of their budget to begin with), the headline created a shock spurring record amounts of donations.

Cutting aid also doesn’t mean that the government views art negatively or as something which doesn’t deserve to exist, but rather is something that doesn’t deserve the attention of the government. Shrinking government responsibilities in small ways like this is an important and necessary facet of having a government that is focused at what it should be doing, not on what it could be doing.

Luke Robson

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