very much to have that continue, pause they draw their all-volunteer army from the people at the bottom who don't see any other option in life. so that's my little axe to grind. >> that was great. [applause] >> may i please make a pitch for a local tucson organization? >> i have to close because we have c-span, i can't -- you're going to have to wait a minute. i'm sorry. >> if i may, there is a local organization, the purple mountain institute, and you can find them at purplemountaininstitute.org. they offer free courses for veterans in mindfulness-based stress reduction. you may have heard about it. it's a form of meditation. mbsr. classes are free for vets and their families, and it's offered throughout the year through the community, and i highly recommend it. i'm a veteran, served three tours in iraq.

i've taken the course four times, and it's finally starting to stick. so i encourage you if you are suffering to look at the purple mountain institute. >> thank you very much. >> thank you. >> i just want to -- hey, a big hand for our two authors, david finkel and ann jones. [applause] yeah. the authors will be autographing their books at the sales and signing rare number one at the ua bookstore tent. please don't ask them on the way out, because they have to get there. the festival would like for me to say to please join as a friend of the festival for your tax-deductible donation allows us to offer programming free of charge to the public and support literary programs in the community. you may learn more at the booth on the mall or online at the web site. please you have to actually leave the venue because another group is coming in right away, is please leave the venue and speak to them at the book

signing area. thank you for your support. [inaudible conversations] ..

>> the first is the codirector of the robin hood foundation. he has a phd in mit economics. the director of the greenberg center on foreign relations. probably the reason that i wanted to be a moderator here today was recently had a summit on the subject of how the private sector can help address the issue of poverty. the nobel prize-winning economist james heckman introduced himself on the panel and is indicating the reason he was here with listen to michael weinstein. he knows more about this and all that. the author now, michael weinstein. >> thank you. our other panelists is former chief executive officer of the national public radio, a former litigator in washington dc. he served as deputy general counsel or the clinton-gore administration in 1990 for the campaign.

he has and the senior adviser to the director of the international broadcasting bureau and in his eight and a half year tenure at npr, they were known to strengthen the stability in part from the 200 million-dollar gift and he is the reason author of charity for all. why charities are failing in a better way to manage it. okay, so let me get this started by indicating to you in about a year and a half ago tucson was in a study in the six poorest metropolitan areas in the united states. we are now eight and i would like to take credit for that. but i'm not sure that a couple other cities haven't already done that. but the good thing about it is that the community has now begun

to focus on how to best address the issue of poverty systematically. we live in a time when we know that government either cannot or will not do at all. in my experience, which is only been a couple of years, i would say is parsimonious at-bats. as you know you are here in the state of arizona. so what happens is this issue of poverty falls to the localities of the cities and counties to deal with, as i'm sure you know, the cities around the country are just doing their best to try to continue maintaining their presence services. so i think the recognition from all the private sector has held, yet both of you, i know knew books you have concerned about how the best way is to make this

happen. gentlemen, we are here to listen and learn area. >> i am an economist. so don't hold me too much accountable. that one of the things that the economists preach and i think reach correctly is that issues of poverty, any issue of redistribution is best handled at the highest level of government and not the locality. so that a town would be in rough shape if the choice redistribute income from the wealthier members of that community to lesser members. they will read it if it's tax structures and government policies that favor people above a income or tax people above the median income in favor people blow it. so these kinds of things should be happening at the national level. people are less likely to leave the united states and they are to weave leave a particular city or whatever.

having said that and being mindful of the constraints that you are thinking about, i think i would be satisfied today if i convince you to adopt one conversation and drop another. the conversation then i urge you to drop is the conversation that says that we are going to eliminate poverty. we are going to find a game changer. we are going to radically alter the circumstances of low income residents of arizona or of tucson. all of these large global promises and etc. to assume a different language and a different notion, which is a rate of return. a kind of corporate business with normal corporate rates of return. if the private sector is going to do something is going to be because of marshall's dollars, spending them in a way that does the maximum good if they are philanthropic.

and so you want them to spend their dollars that have the biggest impact in raising the living standards of the poor citizens they are trying to help. that doesn't mean that they have to be the biggest in town. they don't have to have a wreck will project or a silver bullet and they don't have to be a game changer. but what they have to do is spend dollars smartly. and i will say a few words and i will not. what we have done at robin hood, it's an organization that gives away about $150 million per year fighting poverty in new york city. to put that in context, the rockefeller foundation will give away about to 2.5 times that. and they operate around the world. we operated in one city. the very different model of having an effect. in the way we set ourselves up as we promised our donors, we have put in sophisticated sense of accountability and we view

that as a relentless application of benefit cost analysis as an undergraduate. putting in a sophisticated system that we take account for as to how these dollars are used no matter what we've used them. whether it's a micro learning program or a prekindergarten program or an afterschool program and emergency food. whatever we are doing, we measure the effect of that on the low income residents of new york city. to bring these together we wrestled the following thought. we spend $150 million per year. if you look at our website and the materials that we put out, i like to believe that we can convince you for every dollar that we spend on average we raise the living standards were

between 10 and $12. that is what we can do. that is what private sector can do. and we can put people in a better situation than they were without us. that brings these two conversations together and we leave it for public policy. we leave it for the political entity to adopt the kinds of policies that can have heart-wrenching, if you will, more sweeping and more citywide impacts and that is not what a private charity can do and that is not in our case what we attempt to do. smith wanted to save the great pleasure to be here. i will start off with this from this morning. i was with my wife back in washington and she asked what i was going to do today and i said i would be on a panel about whether private dollars can alleviate poverty.

because she thinks about these issues. like what you think i should say. and she says, to say that they haven't yet been a microphone down and walked out. [laughter] and i'm tempted to do that at times because it's actually a fairly good formulation of the situation we are facing today. and i think that the challenge that we face, mike was essentially alluding to it. the problem of poverty is not just of income or education. it's not just a problem of transportation or housing. it is all of the above. those are problems that often higher full-scale solutions. i frequently write about charity and people often come to me and say that private solution, private giving is a better solution than government programs. i think that afflicts a lot because of people's dissolution with government, often with good reason. but the scale and the challenges

of this in this country is enormous. so if you think about the problem with education. public spending on k-12 spending each year is about 1.32 in dollars. for whatever cause only about $250 billion. so if the gates foundation, the nation's largest foundation decide by tomorrow to empty out its entire coffers, it went out of to this and don't quote me on the map, one 10th in this country. the scale of money that they currently put into alleviating poverty is really just a drop in the bucket compared to spending the government does. and i think that that helps us

talk about the issue of redistribution. but it doesn't mean -- i'm really a guy that tells stories, it doesn't mean that smart investments can make a difference. because in some ways they have an opportunity to make a difference and, i think, do things with flexibility and speed that is difficult for the government to do. and i will tell you a story of one guy. not just any guy. but a very rich guy. but the story that despite his problems speaks to some of the if the story of a guy named tom cousins. you've probably never heard of him. he's a very rich guy now in his 80s. back in his heyday he was one of the two developers responsible

for downtown oil. in 1991 he wrote an article mcgurk times it was actually sort of an extraordinary article. and even to this day i find it hard to believe. the article said that 80% of the prisoners in the state of new york come from this neighborhood in newark city. and tom read that and send that can't possibly be true. so tom being the kind of person to find out if that is true and they than this to "the new york times" can actually report as accurately. he said that is an amazing thing. i welcome if that is true. so because of the chief of police. the kind of guy that can do that and they read the this story in "the new york times."

i can be true and he laughs and says of course it is true, everyone knows it's true red poor neighborhoods that provide the bulk of this in the state of georgia. so all of these neighborhoods are terribly impoverished and oppressed neighborhoods and the worst is one called eastlake area tom actually help to old some of the properties here and it was a terrible neighborhood. i've seen pictures. not because of asian population but because it was a shooting gallery. the employment rate there was 13%. monthly unemployment rate. but the employment rate. so eastlake woods replaced with where hope went to die. so tom and the cousins foundation made a commitment. they were like many donors and i think his previous giving characterized how he spread the money around. a lot of well-known individuals

in this state, they said we are going to change this. we are going to make this part of bullet investments and we are going to create a new model and that is sort of an extraordinary thing. not a lot of money relative to a government has the time and place like this. so over 15 years he had to convince shirley franklin who now runs his foundation the department of housing and urban development to do something they have never done before. will literally blow it up with the promise that only some could come back. he was able to persuade not only the powers that be that the

residents themselves that this was the right thing to do for the community. not through his own coffers but through leveraging and the relatively small dollars that would bring in the job training services regarding this. they made a lot of mistakes along the way. but over a timeframe of 15 to 20 years, really reinventing the community and the city ended up closing down a poorly functioning public school and replaced it with a charter school. so i went there last year and i promise i will come to a conclusion of this long-winded story soon. visit eastlake. and so rightly so they are very proud of these and it is

something that his daughter craved over the years. because it's not what we know of the pictures of eastlake, which are actually through wire, it's a lovely neighborhood and still low income. and you can't walk through it without really being inspired. largely with federal dollars and upon their private investments. it's a beautiful place. kids are uniformed. i sat in a first-rate engineering class in the right amazing. then they brought us back into things and for those of you who have read my book, i will tell you it's a skeptical book about why stories don't really prove the case for charities and that

you need a return on investment and you need measurements and proof. so i said to them, you know, this is evil. thank you for your time. but how do we really know that this area is okay with the promise that you set out for them 23 years ago. so they went to the whiteboard and i opened it up and they show the test results there and i was there with a young woman and a colleague of mine who went to sarah smith elementary. she's local from atlanta. none of you have probably heard of her. but you know her because it is an elementary school with him middle-class area where all of the colleges bring their kids to the best schools. and the most extraordinary thing was that every grade on every test true outperformance of

this. and it actually outperformed every school in the city of atlanta. so this would not have happened and it's not because the more money in the federal government for the city government. they were able to buy incentives and by hint of persuasion and by leveraging on what they had to create something that was very different then before. shirley franklin is actually the president of the foundation of what they called the communities and her job is actually to take the model of eastlake and evangelize it across the country. because those are types of projects that i think actually show the potential of how these investments have held by them else. >> on i'm going to ask the same question. opening up for anyone in the

audience. whoever wants to ask questions. but i think that we all have the fundamentals and that we can do more together than alone. the government by collecting taxes and using it appropriately does things like environmental services and transit and in our community we took by vote $18 per taxpayer and created $100 million to start to fix our roads. i don't have anyone in this community was going to fork over this money for a particular project or it given that that is the case and i think it was in your book that you said taking even the largest gifts, ms. moss gives, people give approximately $2000 per year on average. how does a community like this in a group like this figure out what to do best and how to do it and how to measure it and michael, i know you've done a lot of work in this area.

>> we do tens of millions of dollars of partnerships with the city of new york. one of the things that we can do in private philanthropy is to impose standards of the kind you're referring to sue in the city knows that they are doing a partnership they know two things or they know that we can take rest that many often can't. because many claim they are paying with their own money. so we can take rest out of public authority that is generally reluctant to take. and we can also set standards a lot higher than government agent can. there is the famous comment that they needed mediocre just as it is because most of us are mediocre. and you know, you don't have to take that too seriously, but it is true that public authority

has a lot of time setting a standard so high that most offices would fail them. so private philanthropy when partnering with a government agency can do things that neither can you buy them else. let me give you an example. and i'll say something very concrete about how we write poverty in new york. we were on, robin hood runs, 90 sites around the city. running a program called to talk which brings to bear a free social worker and a tax preparer in bringing this team of people together and anyone who comes in we sit down and help them. one of the things that we do this to complete the tax forms of 60,000 low income, low-paid new yorkers. and on their behalf we covered about $120 million in tax

refunds almost entirely from the federal government. so my point about raising the is when he put $5000 in tax refunds on the table of low-paid new york family. you have added something somewhere between half to a third of their incomes that they earned and added to that. and that is the amount of money that they need that now has cover their rent and now they can buy a close in books and schooling materials and anything that they need that they want for their kids. this has an enormous difference. he put it in the total amount of poverty contacts that exists in new york. even the difference in how much income you must add over and above to bring him up to a non-level of income, that is small. to 110,000 new yorkers and the 60,000 that we help, these differences are huge. so again i urge you to change your focus from thinking that you have to be talking about one

thing that solves the whole problem to something that takes whatever resources are going to be made available, private and public, and squeezes the most impact out of those dollars. for that you need sophisticated framework and i don't think that that is probably the interest of people sitting here. >> so there is actually a fair -- it's an extraordinary fact that the average american household gives about $2500 per year in charitable giving. it is by far and away the most giving her household in the world. and i think there is a question about that which i will sort of raise. it's so large because attack rates are much higher elsewhere and there is such a different respect to investments in public

goods. but the u.s., there's a lot of charitable giving and in a community like tucson, there's going to be hundreds of millions of dollars and are given every year that is going to be spread over tens of thousands of charities. 1.1 million charities in the united states. it's an amazing number. so what i have observed in my time is the power of relatively small amounts of money to leverage cooperation and to create incentives for people to work together in different ways. and i will tell you a story. oddly enough it's a story about of british pharmaceutical company called glaxo smith kline, which couple of years ago when i was an advisor to the project decided we wanted to make an investment in public health. in the united states and a couple key market, st. louis and

philadelphia and big operations there. one reason to give back to the community. so they had a series of listening sessions around the country and they brought together government leaders from the public health field. a lot of nonprofits and a lot of experts. and i would've thought they would've said this is a big honking check. but they didn't. so help us work together. and i thought it was actually an extraordinary thing for community leaders to kelly british pharmaceutical company that they wanted help in learning how to work together. so what they have done, and they have question the issue, they have set up a pool of money with

incentive grants that are tied entirely to the nonprofit organizations and government organizations on community health programs and i've always thought it's been very interesting when they create incentives for them to work together and what those communities want and help them to sort of rethink how to make a difference in their communities. again, i think that is the targeting nature of ivan investments that they hopefully will make a difference with in success. >> and would open it up to the audience. if anyone has any questions or want to ask you government about their work. we have two microphones. if not, i will go have a mass questions you. >> i will start it off very and

coming back to the atlantis story, it sounds wonderful. great education standards raised. but what about jobs? to any of you guys think about creating jobs where people can gave the cycle of poverty and sustain those jobs? >> we do, about 30 or $40 million a year in funding job training programs. and they take on all kinds of colorations. the social science literature and were paid for by an employer. so it's pretty discouraging. so job-training just as a concept is a very hard task to pull off. nonetheless we do a lot of it. and because we tried to be very opportunistic.

so inside the city of new york there is another city and its called new york city public housing in a has about 380,000 people living in that city within a ready in apartment houses and etc. so what we do is train the resident to do jobs of the public housing project. cable-tv, maintenance, things of that sort. public housing authority under the contract to hire these people back. so we trained a number of people, mostly women, to do these electrician jobs and etc. because we do contract with the unions to take on the trainees and make them part of the union and placed them in jobs. it's tough and it's grinding, there are no silver bullets to this business grade but it is the right thing to do. and it's all positive. we do get returns on these. positive returns could we make

progress. it's not spectacular progress. >> i will actually add to this and some of the details of the eastlake story, which is if they did bring in job training programs but it doesn't actually solve the issue. and so they have a lot of poor neighborhoods nowhere near where the jobs are. so we have a lot of single mothers with children need childcare services great so they created a whole is that sort of multi-services approach to it. for the precise reason i think you suggested, tom cousins had no interest in supporting this for the rest of his life. i don't know what the job -- it was an employment rate was 14%. i should know what it is today but i don't. but i can guarantee you that it is many times higher than it was 20 years ago.

>> i know that this is kind of a generalization question. but what has been the track record of religious institutions in this country. and if you might be pacific, can you talk about what would be a factor in eastlake. and i will keep speaking, because that's what i do. because the one involved in any specific way. ..

lever the church has exercised on the east coast, philadelphia, and new york, which i know intimately, is that they run their own school system in effect, and in philadelphia, if you were black and lived in the west philadelphia, what we used to call ghetto, or the north philadelphia ghetto in philadelphia, that was your only escape valve was to get into he catholic schools and get a high-quality education. many of those systems have eroded over the years. we try to partner with religious organizations and the parochial schools in new york, and we mind up mostly not doing this, not because of religion one way or the other, but because when you're running a private school,

you cannot pull any taxpayer money, and so if you think of a charter school, other kinds of schools that provide competition in the traditional school system, they pocket the 13, 14, $15,000 a kid being spent on public school students and then a charity like ours can add another $2,000 to provide schooling prior to the opening bell of the school, july programming, on and on and on. you can build on the taxpayer money, and then add some money to get the job done. particularly with long hours. if you're a private school that 13, 14, $15,000 has to be raised before you do anything extra, and that's a very high mountain to climb and one, frankly, that doesn't get climbed very well anymore. so, there's a glorious tradition that the churches have played historically but that's a

struggle now. >> yes, ma'am. >> many cities recently have had very good luck providing homes for the homeless, and finding that they're saving money doing that which can be used for other services. seems to me this is -- sounds as though it would be the public sector that would take care of something like this, put seems to me it would be a good opportunity for both public and private to work together here. too you have any thoughts on that? >> i'll act like i know something. here in tucson, we accepted the president's challenge to try to end veteran homelessness by 2015. programs have been going for seven months. we have housed 500 formerly homeless veterans. that comes about as a partnership between our city of tucson housing department, where we streamlined some processes to get folks in faster. also came about because of the

veterans administration also focusing, and then we have in this community -- just happen to have a community that is very supportive of veterans. we have, one, very large veteran population, and, two, a social service structure that has been attempting to help the homeless population for a long time, but the bringing together of all those forces is helpful, about i will tell you, we can do a lot more with some focused private assistance. >> you can take your story and change the names tucson with new york and add a zero and we have a similar story. we have come very close to reducing the rate of veteran homelessness to zero, and that was done entirely by coordinated efforts with the federal authorities, mostly city, and private philanthropy, especially ours. >> i think one of the

interesting underpinnings of the question was, this are actually a lot of social programs, at least a number of social programs, which have a door figure associated with them but have been shown to actually have saved money in the long run, often extraordinary amounts. and it often puzzles me how the public system, which i would include also the private funding system, also struggles to make those early investments. i think people actually don't really -- when you talk about private and public investment -- understand how deeply intertwined the private charitable system is with the public? system. 500 billion of the charity comes from the federal government, directly or indirectly. so, just remember, private giving 3 billion, government,

55 billion. there are programs -- 5 billion. there of programs from the federal government showing extraordinary rate of return, early childhood training, one i followed out of colorado, the nurse family partnership, which provides prenatal nursing advice, to at-risk mothers, usually sickle mother-first-time mothers o. who -- on who don't have jobs. and keeps mothers at work, saving taxpayers and the public billions of dollars, actually funded by the federal government, one of president obama's early promises to allow the nurse family partnership to scale nationally, and that money is going to be lost in the next budget round. and it's extraordinary to me when you know programs that actually save money long-term, how bad public conditions can

be. >> ma'am? >> have either of you had much experience in microlending, and how effective do you think it is? >> i'll give you my telephone number. call me in five years and i'll give you an answer to that question. microlending is a really fascinating topic. if you -- it's why god invented economists. if you look at the programs and -- microlending started in its modern version in bangladesh and other third-world countries. the idea was lend people a small amount of money, let them become entrepreneurs can set up their family in local businesses and let them take off. i you look at the literature carefully, if you listen to -- listen to the people who do the microlending in the third world,

they will cite gaudy stack -- statistics how wonderful they are and those statistics are invariably 1% of the borrowers repay their loans in full. the numbers are gaudy. goes on and on. but if you asked them, so what? what is the income of the typical borrower compared to what that borrower would have earned without the loan, and that conversation resolves because they won't look, resist asking the question, which is the only question a poverty fighter cares about. so what we're doing in new york is as follows. you take away from the literature this is probably not a very smart way to proceed. on the other hand, if you can figure out how to make it proceed, you'd have a fantastic antipoverty weapon. robin hood could call its donors and in 10 minutes raise a gaga

zillion dollars because they love the idea of funding entrepreneurs and let them take off. so we put in place, started in the fall. we're running what is call a randomized control study. we eave a treatment group of borrowers and identical group of'em who don't get loops. we'll follow the borrower and nonbow roars for at least three years and maybe as long as five. then we'll have the positive evidence whether microlending can work in a first-world industrialized country like the united states, at least in an urban -- heavily urbanized low-income neighborhood like new york and newark and other parts of neighboring new jersey. so it's an alluring idea. we'd love to figure out the way to make it work. the evidence notice there yet. in fact the evidence is looking pretty bad. but as i said, call me in five years and i'll give you the

right answer. >> anything else? >> i'm going to call mike in five years. >> yes, sir. >> i wonder if you can address a problem of the presence of drugs in poor communities and i guess drugs are both causative and an effect of poverty, but how can we get meaningful leverage on this problem? >> i just want to say no nobel prize winner ever asked me my views on poverty so i'm passing it to mike. >> we do a lot of work in the largest penal colonial colony in the world, rikers island prison in new york. overwhelmingly the people in -- that we deal with, we try to help, trying to set them up when

they leave, medicaid, food stamps, in order to give them a chance. overwhelmingly the problem is substance abuse. mental illness and substance abuse represents a large part of the problem. we have programs that deal with that. we train convicts who were convicted of drug abuse and drug possession, drug selling, et cetera, et cetera were detrain them as drug abuse councils and hope they can relate to the people in their community who are attracted to the same ultimately self-destructive way of life that has been on. i must tell you that i can't point to a single one that, again, is a powerful beacon of success. this is a tough business. some of these programs work. they work better than not. they're worth the deals in the sense of a payoff but there's no

model that rears up and says that's the way to do it. none of the 12-step programs, et cetera, however you try it. the overwhelmingly important problem and i wish the hell i had a model of a program that tells you, this is the way to address it. we have small, small victories. >> the one drug program i wrote about in my book, a program that many of you are fame with, called d.a.r.e. and over the years it had become the largest drug education program in the country. something that -- estimated costs 1.2 billion in its heyday, and is in most school systems. i heard yesterday no longer in tucson. and the thing about d.a.r.e. it exceeded and flourished despite

20 years of testing and research, including randomized controlled tests, that showed that d.a.r.e. was in fact a drug education program, taught kids how to use drugs. and it just -- it was actually -- ended up on the surgeon general's list of programs that don't work. i read about it not just to sort of point out, d.a.r.e. does not work. actually goes to the complex advertise -- complexities of solving social problems, and some ideas have unintended consequence. >> this this the community college will be holding a -- the anniversary of the second chance act, a job fair for people who are returning from prison. the hurdles these folks face is

amazing. but if we can get them cleaned up -- i know michael has had success in new york particularly with women as opposed to men coming out of the penal system -- that job is everything. >> let me add this. a few data points. if you have job training programs for prisoners who committed felons and were sentenced to 10, 520 -- 10, 15, 20 years and then they're released, you'll have good success. they're older, no longer kids. you can get to them and give them a skill and if they can turn that into cash for themselves and, more often, more important, for fir family. that can work and those programs are okay. the incredibly bly hard population to reach are the 18

to 25-year-olds. most of them are coming out of jail rather than prison. we take prisoners on the day they're exiting rikers island prison, and whisk them off to a community college and puts them to work on the maintenance crew, and they get cash wages at the end of the day, and i've gone on the bus that takes them from the prison to the community college a couple of times, and it's really an eye-opener for those who may not have much contact with these problems. you will be chatting with these folks, all of whom -- they're lovely, engaging, warm, entertaining folks, and you say, have you ever been at rikers before? is this your first time? nah. >> think you're going to be back? >> of course. >> has your neighbor been to -- >> of course. >> the idea that rikersss

deterrent -- the fact that jail is deter rent, no. jail taught them everything they need to know about taking drugs, selling drugs. unintended consequences but it's incredibly difficult problem that -- again, one step at a time. >> yes, sir, over there. >> sort of a straight line for michael but an answer from any of the panelists. if you woke up tomorrow as the chief economist for wal-mart, what would be your recommendation to the waltons regarding -- considering their corporate as well as their philanthropic role, what would be your advice to wal-mart regarding the 10.10 minimum wage >> ah. i was about to say that was a great question because i was going to answer and it tell you i've been working on wal-mart -- i wouldn't say with -- for many years.

wal-mart is not in new york city, but they looked like they would break their way in. what i wanted to do, and will not give this up -- give this mission up -- is to locate single stop sites with lawyers and financial accounts and tax preparers gathered together. a lot of what we do is connect people with tax refunds they're eligible for, and if you want to -- sight this at wal-mart, day have a fantastically large low income consumer base, and if we can get them the refund the and they walk the aisles of wal-mart and get the best prices available to low-income consumers, that makes my day. on the minimum wage, it's really hard. the tradeoff is as follows. you can fault wal-mart, perhaps, if you're of that ilk, false wal-mart for paying low pages and providing skimpy benefits, et cetera, although there's been some real changes in that over

the last couple of years. but please don't do so unless you're also willing to indict them for charging low prices, because the two are integrally connected in and in some ways wal-mart this best news every for a low-income consumer. they really have the lowest prices possible, and they get that in part by paying their workers relatively low wages and providing low benefits, et cetera, et cetera. so it's not the easiest thing in the world. i have to say, wal-mart, pay an extra dollar or two an hour for your workers but then they have to turn around and raise the prices, and exactly where that baseball lie -- balance lies, don't have any cheap answers. >> i'm going to answer a related question -- first, if i woke up at wal-mart's chief economist tomorrow, wal-mart would be in big trouble. i took two econ courses,

undergraduate. by the way, mike was professor at my college, and i studiously avoided his classes because he was considered to be hard grader. but one of the underlying questions, not the one you actually asked, related to the wal-mart foundation. wal-mart is a -- i studied corporate giving, and wal-mart i think this year is the largest corporate donor in america. something like 300 mental a year -- $300 million a year. that sounds like a lot but corporate giving has gone up a lot over the years, but has declined precipitously as a percentage of corporate profits, which is the right way to look

at it. as corporate profits have skyrocketed, corporate pratt giving has gone up but nearly the same amount. that's the first question i would put to them is, how do you benchmark and start thinking about reinvesting even a modest 1%, which some think of as the benchmark, back to the community and very few 0 of the major corporations reach that level. >> i think a lot of the younger people now are scared there will be no social security later on and don't feel they can give charitable donations right now, but are looking for social investing. what drew think of the effectiveness of things like community loan funds and are you involved in them at all? >> well, first things first. social security will be there. social security is not in a difficult financial situation. it's been long shown by scores of experts that minor tinkering

with social security system will bring into balance for all. health care, medicare, medicaid, that's a different issue. controlling medical costs is something we have to prove we can do. i wouldn't -- there's no reason for the younger generation to worry about social security. it is not a particular problem. community loan funds. we do a lot of things along those lines. let me suggest one novel think we do and has become a model for other cities but it gives you a flavor for what is possible if you're a little creative. we -- new york has terrific private nonprofit real estate developers in the business of building buildings to support low-income new yorkers. and what we have done with mcarthur and rock feller and ford and several other foundations, we created a

$40 million risk pool or guarantee pool would be more accurate. so, we put up $40 million along with our partners, and when a developer of low-cost housing sees a property they can buy and fix up, they don't have to then start the process of getting a loan because they'd never get it and some for-profit develop we're buy the land and build expensive apartments. instead we create this guaranteed pool. the developer of low-cost housing can then go to the bank, chase or citibank, and get a loan immediately because the philanthropies -- robin hood and the partners, have guaranteed the loan. so just a way of getting together, supporting the community trust, if you will, generalizing from that term -- getting money to nonprofit developers, to create the housing that we so desperately need in new york for low-income consumers. a lot of ways to do that and you

don't have to necessarily build it yourself. there are ways to do that by using money in a particularly clever way to show you how clever this is, for robin hood we didn't spend a time. we just gave them a letter of credit. we told chase, we're good for it, and if the loan defaults, knock on our door. so they're really, easy, simple, creative ways to get help for low-income consumers, low-income renters itch you put your mind to it. >> go over here, i will try to get back here, we're short on time. >> two questions. what's the biggs issue that nonprofits -- biggest mistake nonprofits make, and where do you -- >> not taking economics. >> okay. and where do you personally put your charitable contributions? >> i'm going to ken first. >> it's a great question. i think the biggest mistake that mon profit -- nonprofits make is

listening to the public discourse about overhead. so, one of the things -- one of the myths out there, i think probably most dangerousing my out there, is people should only invest in organizations that spend all the money they can on services and less on overhead. and i think that's actually been completely debilitating for many because the investments that an organization -- any organization, for profit, not for profit, needs to make in research. mike talked about randomized control testing. how too you know if your plan works. organization is built on human capital, training, infrastructure. those are things that define great organizations, for profit or not for profit. it's hard to invest in that as a not for profit an because of lack of capital and because the

marketplace has -- put all your time and expert money into services and not into yourself, and that's not how you build a great organization. the organizations write about, the ones i admire most, are those invested over -- often over 20 years into really building great organizations. building and retaining great staffs, to doing research and benchmarking their services and often strategizing and any great company would do, and that's the most important for any organization, for profit or not for profit, to think about. the organizations actually i invest in are those -- i -- $250 billion a year is investment in the future of our country. i invest only in the charities that can show through research, third-party research, that they

have been able to prove they can make a difference. prove you can make a in people's lives. relatively few organizations can muster that type of evidence, i'm sad so say. so i look for those organizations and consult organizations like "give well." the -- evaluator of companies and try to follow what they know because they know more than i do about who is doing intel who is not. >> i'm going to the last question. >> what do you think of the concept of going back to poor farms like we had in the 1930s and '40s and '50s. >> the poor farms? >> you don't know publish. >> i remember the civil conservation corps. >> los angeles county we had poor farms where people that couldn't support themes, they were provided with cattle, cows,

did their own milk, grew their own food, they lived in -- the city of downey was almost all poor farms, surrounded by a fence, and they had baracks -- barracks for single men and single men and housing for married people. very successful. that was during the '30s. >> the biggest difference in the american economy from the '30s to now, one could argue, i guess give a lot of -- we'll keep it at argumentative -- is the fact that we have reduced the price of a calorie to zero. if you go back and ask economic historians why do the u.s. became the leading economy in the world in the 19th century and 20th century, it was all about the incredible food belt, farm belt, and how cheaply we were able to produce food, therefore released people from

the farms to enter manufacturing and other sectors. that process has become so unbelievably successful that, if you think about what is the price of buying a calorie, the calories we need to live and sometimes live too well, that number is getting close to sear how. so the last thing i would be doing, i think, is driving people who are poor into food production and whatever, except in niche ways. if you look at new york city, which i know something about. i don't know much about tucson. we support a lot of soup kitchens and food pantries. but most of the people going into the up so kitchens kitchend pantries are not going because their hungry. they're going because their poor and if they can get their food free, that releases dollars for

other necessities they need to buy. so, that -- is that the kind of intervention i'd be sending them to about local food production? that's awfully expensive and very high priced and costly and not an economic way i would advice. ...

>> one of the organization i write about is a group called give directly which is built, only about five years old, but it's an entire service built on the notion that it actually makes a lot more sense instead of setting up aid programs to go into poor neighborhoods in places like kenya and uganda and just give people cash. when i first heard it, i said, that's absurd. that's why we need rules and aid organizations, we need to tell people what happened to do with the -- what to do with the money we give them. but it turns out there's a lot of data that, in fact, people make in those situations -- and no one claims this is a recipe for every problem -- that if you give people cash and you're able to track it and