Freakonomics in the Times Magazine: Bottom-Line Philanthropy

In their March 9, 2008, column in the Times Magazine, Dubner and Levitt ask: why can’t a charity be run more like a business? They look at two philanthropies that have adopted unorthodox business models. Smile Train, which performs free cleft-repair surgery for poor children around the world, started training local doctors rather than flying in U.S. surgeons; this has helped make Smile Train one of the most productive charities, dollar-for-deed, in the world. The second philanthropy, proposed by a world-class poker player, wants to create a $10 billion “cure cancer” prize with a hitch: a cash dividend paid to the people who donate the $10 billion. Below is some of additional information about the column.

1. Smile Train has performed more than 280,000 cleft surgeries around the world in the past eight years. Here is a country-by-country breakdown. Below is a photo of Smile Train president Brian Mullaney and “Soccer Boy,” who was the catalyst for Mullaney and others deciding to change the way a cleft-surgery philanthropy is run.

soccer

2. This paper by the economist Robin Hanson (“Patterns of Patronage: Why Grants Won Over Prizes in Science”) and this masters thesis by Jüri Saar (“Prizes: The Neglected Innovation Incentive”) chronicle some famous prize incentives, from the Longitude Act of 1714 to the X-Prize. This interesting article by the Times‘s David Leonhardt discusses Netflix’s effort to improve its “Cinematch” rating system by offering a $1 million prize to whoever beats the existing system by at least 10 percent.

3. Rafe Furst, a World Series of Poker champion and proud member of “the Tiltboys,” explains his vision for a new kind of philanthropy on his blog. Dubner wrote previously about Furst’s new prediction market “Truth Markets.” Furst has also contributed to this blog on the subject of why there are so few Indian-American poker players.


AaronS

Government, run by endless compromise and committess, is inherently incapable of making breath-taking, breakthrough programs. It is left up to the common man. That's why I am excited about the development of "prizes."

A $10 Billion Cancer Prize is just the sort of advanced thinking we need. My only addition to it would be that such a cure not go through the standard pharmaceutical process of being very expensive until it becomes generic. Instead, the cure would be provided relatively cheaply (perhaps no more than a 15% profit, say?) and that and the $10 billion would be enough to make everyone happy (except the pharms!).

I can only shake my head in wonder at President Bush.... We can spend BILLIONS each year in Iraq...but we can't put together a $20 Billion Alternative Energy Prize? One that is clean, renewable, safe, and--get this--implementable within 3 years?

Nope. Apparently not. That might mess up our need for oil.

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anna

Countless doctors in other countries help patients around the world, but their own co-patriots have decent civilized lives. In other words, one doesn't have to victimize millions to help someone else.
One just have to have a civilized set of values, instead of utterly barbaric "the rich are rich because they deserve to be rich."
Look at the street of New York and the roofs of New Orleans, hypocrites.

Mike B.

You know what would encourage philanthropy? Remove the tax exempt status of organizations that spend disproportionate amounts of money on meaningless/wasteful enterprises (such as building magnificently useless churches), acquiring land or other long-term assets, or who spend significant percentages of their funds on staffing and overhead.

anna

Nothing is more repulsive than money-laundering scheme - you squeeze Bangladeshi children, you squeeze American workers, then drop your dirty underwear to your victims for taxes, self promotion and self gratification.

Andrew Wexler MD MA FACS

Smile train is a wonderful organization that raises money to help fund other organizations cleft missions. It is not an independent surgical provider. To credit Smile Train alone for the surgical correction of cleft children is to undercut the multitude of pre exsisting cleft organizations whose dedicated volunteers actually do the work. As for training foreign surgeons This concept has been integral with many of these organizations for many years and is not a new concept.

Carey Ellis

I pity the little boy,..but I guess he's still happy,.. just seeing him, I can feel that everything becomes uneasy to him..

Carlos Abadi