Popular Science Monthly/Volume 55/June 1899/Abuse of Public Charity

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ABUSE OF PUBLIC CHARITY.
By BIRD S. COLER,

COMPTROLLER OF THE CITY OF NEW YORK.

TEN per cent of all the human beings who die in New York city are buried in Potter's Field at public expense; but the records of organized charity, official and semiofficial, show that less than one per cent of the living are paupers or dependent persons. There are two explanations of the difference between the number of living poor and penniless dead. The chief one is that abuse of public charity has grown to such proportions that the city has become the Mecca of the chronic idlers and tramps of the entire country. It is easier for an industrious and shrewd professional beggar to live in luxury in New York than to exist in any other city in the world. No magic wand of ancient fable was ever more potent to unlock the gates of castle or prison than the name of charity is to open a way to the public treasury. The liberal and well-nigh indiscriminate giving of the money of the taxpayers for the relief of sickness and poverty has been commanded by law, sanctioned by custom, and approved by public opinion until the possibility of checking or reforming the abuse grows more and more remote as the burden increases and the evil results multiply.

The city of New York gives annually to public charity more than $5,000,000, and contributes indirectly $2,000,000 more. Of the money raised by taxation for city purposes proper (State taxes, interest, and county expenses eliminated), almost twelve per cent is properly chargeable to relief of poverty and sickness. Of this expenditure more than $3,000,000 is paid to private institutions and societies over which the city authorities have no control or supervision. The payments are made in compliance with the provisions of acts of the State Legislature. The only provision in these laws that enables the city officers to protect the treasury from fraud is a clause under which the comptroller is permitted to verify the bills of the institutions for the care of committed persons. There is a constitutional safeguard against outright swindling of the city, in the requirement that charitable institutions shall be inspected and their bills approved by the State Board of Charities, but the system is open to many abuses where the public officers are powerless.

The present comptroller of the city has found that a number of alleged charitable institutions and societies receiving money from the city apply nearly all their funds to the payment of salaries of officers and employees, while their relief work is very limited and of doubtful character. Other societies, he found upon investigation, really encourage professional beggars without in any case relieving deserving poor. A few cases where so flagrant in their abuse of public charity that the further payment of city money to the societies was refused. In one case he found that a society which claimed a board of directors and numerous officers was really managed by one person, who in one year had received $1,500 from the city and $70 from all other sources, and had expended $1,300 of the amount for salaries and $40 for the relief of the destitute.

The Department of Public Charities, for the maintenance of which the sum of $1,941,215 is appropriated for the year 1899, is controlled entirely by the city. The balance of the $5,000,000 appropriated annually for the same general purpose is divided among more than two hundred societies and institutions managed by corporations or private individuals. In theory none of these private institutions is supported by the city, the municipality merely paying to them a fixed sum, which is supposed to be supplemented by private donations. In reality nine tenths of them could not exist six months without the money they receive from the public treasury. Very few of these semipublic charities have an income from all other sources equal to the appropriation from the city.

The city pays for the support of a child in a private institution the sum of $110 a year, and the average allowance for the maintenance of an adult is $150. The percentage of children among the dependent persons is almost three to one, so the $5,000,000 public charity fund would feed and clothe more than forty thousand persons each year if applied directly to that purpose. In the distribution of this great sum of public money, however, fully $2,000,000 of the amount is absorbed in the payment of salaries and expenses, and therein exists an abuse of public charity so great that the present comptroller of the city some months ago appealed to the Legislature for relief in the form of legislation which would enable the local authorities to stop payments to many societies. There are numerous small institutions, some of them having the indorsement and moral support of leading citizens, that spend from sixty to eighty per cent of all the money they receive in the payment of salaries, and in one case discovered by the comptroller the expenses absorbed ninety-four per cent of the total income of the society!

There is no evidence that any of these societies are deliberately dishonest in their dealings with the city and the public. They are as a rule conducted by men and women whose motives are good, but who have no experience or practical knowledge to fit them for the management of a charitable institution. They are easily imposed upon by professional beggars, and in most cases fail in their well-meant efforts to reach and relieve the deserving who are in actual need. Most of the small organizations that waste public money in misdirected charity are controlled by women of eminent respectability, but with no knowledge whatever of the details of the work they have undertaken. The result in many cases has been that they employ enough help to absorb the bulk of the money received without realizing that they are doing more harm than good.

The city does not spend its own money cheaply. Of the appropriation of $1,941,215 for the support of the Department of Charities for the current year the sum of $529,626 is allowed for the payment of salaries of commissioners and employees. No private business could long endure if conducted on such a basis. Some of the institutions where hundreds of homeless waifs from the streets are cared for—institutions semipublic in character, managed by men of more than local reputation as experts in such work, societies founded by men and women whose lives have been devoted to doing good— show by their annual reports that more than half their income is paid out in salaries. One institution that received $30,000 from the city in 1898 and $20,000 from all other sources, reported a salary account of $31,000. Another, receiving $100,000 from the city and $120,000 in donations, had a salary account of $115,000. For every five persons supported by public charity there are three persons employed on salary in the work of relief. Of every five dollars paid out by the city treasury to relieve the sick and destitute, two dollars is absorbed by the salary and expense accounts.

The theory of the law under which city money is paid to private charitable institutions is that they relieve the municipal authorities of the care of a certain number of persons who would otherwise become public charges to be maintained in the hospitals, asylums, or homes owned by the city. It is also a popular theory that young children who have become a public charge will receive better care and training in a home controlled by a private society than they would in a public institution. Appropriations and legislation are also obtained by private organizations on the representation that for every dollar paid to them by the city or State an equal amount will be contributed by founders and subscribers. This representation is not always true, and in many cases it happens that when a society begins to receive money from the city private contributions fall off. When the city authorities first took up the question of caring for homeless and destitute persons and found that they had to deal with a grave problem, some of the private charitable institutions were already in existence and came forward with offers to share the burden. At that time it was considered a good business arrangement for the city to use private societies in the work of relief. This plan, it was expected, would save the city considerable money, because the officers of the societies would contribute their services, and the cost of applying public charity to necessary relief would in that way be reduced to a minimum. That expectation has not been realized. With the rapid increase of necessity and demand for public relief the expenses of administration of the societies have increased out of all proportion to the work accomplished. In the beginning the city authorities shirked a public duty, and by giving city money to private persons who were willing to relieve them of a burden they invited the creation of new societies and a steadily increasing demand for more funds.

Of the two hundred and twenty charitable societies that receive money from the city more than one hundred have been organized during the past ten years. The records of the finance department and the annual reports of these new organizations show that many of them have received from the city sixty to ninety per cent of all the funds they have handled, and that almost the same percentage of their total income was charged to expenses, the chief item of expense in every case being the payment of salaries to officers. Year after year the promoters and officers of these small organizations appear before the city authorities when the annual budget is to be passed, and, attempting to excuse the poor showing they make, say, in pleading for a larger appropriation, "We hope to do better next year." The most liberal-minded defender of indiscriminate public charity would find it difficult to excuse the existence of some of these societies.

There are scores of small organizations helping to spend public money that are unknown to the general public. In fact, some of them are never heard of except when their officers appear before the Board of Estimate once a year to ask for more money. There is a society, organized for the purpose of supplying clothing to ship-wrecked sailors, which for several years obtained a small appropriation from the city. When the officers requested an increase of the amount allowed, the city authorities asked for some particulars of the work done. The report submitted in reply showed that the society had received, in addition to the money obtained from the city, several donations of second-hand clothing and one box of wristlets (knit bands to be worn on the wrists); had sent to a sailor shipwrecked on the coast of Oregon a suit of underwear, a pair of hose, and a rubber coat; to a crew wrecked on the reefs of Florida some shoes and oilskin caps. There was no report of relief or clothing supplied to a sailor or any other person in the city or State of New York, but there was a charge for salaries that almost balanced the amount received from the city treasury.

Another of the minor institutions is a society that is engaged in an original method of charitable work. The agents of this society, or the members themselves, go out into the slums of the city on Sunday mornings and gather in a number of tramps. The homeless wanderers are assembled in a room hired for the purpose and supplied with a warm breakfast, after which they are compelled to listen to a sermon and a lecture. They are then allowed to depart and live as best they can until the following Sunday. For a number of years this society has received a small appropriation from the city on the ground that it is a useful public charity. To all of these small societies, no matter what may be their alleged field of charitable work, city money is appropriated without specific knowledge of the exact purpose to which it is applied. By legislation or petition, backed by the influence of prominent citizens, scores of these petty organizations, some of them merely a fad or whim of an idle man or woman, have been placed on the list of semipublic charities to be aided at the expense of the taxpayers, and there they remain year after year without so much as a serious inquiry as to their merits or the work they accomplish. The city authorities who grant the appropriations do not and can not know how the money they give to such societies is to be expended, because they have no legal authority to investigate the conduct of such institutions. The city officers, therefore, are not to blame. The fault seems to rest primarily upon that condition of public opinion that is cheerfully tolerant of any fraud committed in the name of charity, and secondly upon the members of the Legislature who vote without question or investigation for all legislation asked for by any benevolent person or society.

To the large charitable and correctional institutions of established reputation, to which children or pauper adults are committed by the local authorities, city money is appropriated on a business basis. A fixed sum is paid for the support of each committed person, and the taxpayers may know what they are getting for their money. While the city authorities can not regulate the expenses or salaries in these institutions, they know that the city is paying for a specific service and that the work is performed. That it might be done better or more cheaply need not concern them. But to the institutions and societies that do not undertake to support dependent persons, but engage in indiscriminate charitable work, the giving of city money is as doubtful a method of relieving the deserving poor as throwing coin in the streets.

The appropriation of city money made for 1899 direct to two hundred and fifteen charitable and correctional institutions and socities amounts to $1,784,846. The appropriations from the excise funds to institutions that support pauper children and adults will slightly exceed $1,000,000. The county of New York pays to State and private charitable institutions for the same period the sum of $118,682; Kings County, $82,669; and Richmond County, $4,845; all of which comes out of the general treasury. The money received for licenses for theaters, concert and music halls, amounting to $50,000 a year, is divided among eighty-two private societies and institutions. This makes an aggregate of $3,000,000 paid out of the city treasury annually and expended under the direction of private organizations. With the exception of less than $100,000 it is all appropriated under the provisions of special acts of the Legislature, or sections of the city charter, and the city officers have no control whatever over the methods of expenditure or the work undertaken by the societies that receive the money. Under such a system the possibilities for abuse of public charity are well-nigh unlimited.

These direct appropriations of money do not represent all of the city's contribution to the cause of charity. The property of all the charitable institutions and societies is exempt from taxation and from assessments for public improvements. The tax commissioners report that the assessed value of the property of such organizations is $70,781,990. At the present rate of taxation this means a loss to the city of more than $1,400,000 a year. The assessments upon the same property for public improvements exceed $100,000 a year, which is paid by the city. These exemptions materially affect the tax rate as well as the bonded indebtedness and annual interest charges of the city, so that the yearly contribution of the taxpayers of New York to charity is nearly if not quite $7,000,000, or about fifteen per cent of the direct expenses of the city government.

Some figures from the budget for 1899 will show the relative cost of caring for the poor. The city will pay for public education $13,040,052; for police, $11,797,596; for the fire department, $4,443,664; for the health department, $1,110,538; for lighting, $2,000,000; for water, $1,450,817; for cleaning the streets, $4,575,800; for parks, $1,729,235; for paving and repaving streets, $2,520,099; and for charity direct and indirect, $7,000,000.

The chief abuses of the present system of public charity are the extravagant, expenditures for salaries and the steady and rapid increase of pauperism due to the misdirected efforts of the inexperienced persons who control so many of the smaller societies that receive city money.

One of the oldest and most important charitable organizations in the city is the Children's Aid Society. The report of the treasurer for 1898 shows the following expenditures:

Industrial schools—
Salaries of superintendent and teachers $106,265.71
Rent of schoolrooms 5,119.26
Books and school supplies 5,178.54
Provisions 8,509.70
Clothing and special relief 5,512.56
Fuel, gas, repairs, etc. 20,497.88
 
Sick Children's Mission $655.48
Children's Summer Home 9,405.37
Health Home 8,307.45
Farm for Boys—Summer Charities 2,719.59
Brace Memorial Lodging House 12,914.13
Elizabeth Home for Girls 10,366.33
Tompkins Square Lodging House 7,546.38
West Side Lodging House 9,079.26
East Side Lodging House 1,848.06
Forty fourth Street Lodging House 7,948.56
Fogg Lodging House 1,942.26
Brace Farm School 12,150.64
Reading rooms 402.96
Medical examinations 812.00
Salaries, executive officers 8,659.92
Immigration, fares, food, clothing, etc. 30,162.69
Reinvestment, bonds sold 29,902.50
Amount due treasurer, November 1, 1898 435.71
Printing, stationery, car fares, and incidental expenses 3,551.85
$309,394.79
 

This shows a total salary account of $114,925.63, or about thirty-seven per cent of the expenditure. The society received from the city $100,764, and from general subscriptions and donations $119,768. The balance of the income was derived from legacies, endowments, special trust funds, and sale of bonds.

One of the private institutions in the city for the instruction of deaf-mutes receives city, State, and county pupils under the provisions of special acts of the Legislature. The report of the treasurer for the fiscal year ending September 30, 1898, shows the following receipts:

Balance on hand, October 1, 1897. $2,885.03

New York State 44,216.74
New York County 27,179.54
Kings County 12,697.05
Queens County 1,217.19
Westchester County 1,060.94
Various other counties 2,727.02
Paying pupils 791.75
Donations 11,754.46
All other sources 613.89
$105,143.61

The expenditures for the same period were $102,570.64, of which $33,613.56 was for salaries and wages. This is a private institution exempt from city or State control, subject to no governmental supervision except examination by the State Board of Charities, yet ninety per cent of its income is public money, and almost one third of the cost of maintenance is charged to salaries and wages. These two cases are mentioned not in criticism of the work or methods of the institutions, but as representing a fair average of the salary account of all the larger private charitable societies. They also fairly represent the two extremes in the source of their income, one receiving ninety per cent of public money, the other a little more than thirty per cent.

Recent investigations conducted by the city comptroller and supplemented by the agents of the State Board of Charities disclose abuses in the expenditure of public money by certain small societies so flagrant that the appropriations for the current year have been withheld. In these cases the salary account was always the chief expenditure, but it was also discovered that whatever relief got beyond the headquarters of the societies went to professional beggars, who had no difficulty in deceiving the persons in charge. It was found that persons in good health had lived comfortably for months, perhaps for years, on public charity dispensed through private organizations. These professional beggars would obtain food at one place, clothing at another, coal at a third, small sums of money from all three perhaps, then reverse the order of application or appeal to newer organizations if detection threatened. Relief was extended in many instances with little or no effort on the part of the societies to ascertain the merits of a case or the honesty of an applicant.

One small society was found to have expended practically all of the money received from the city in the payment of the living expenses of the person who had the entire management of the organization. The charitable work of a year consisted in the distribution of a small quantity of cast-off clothing and a few bushels of potatoes. The reports of the society contained the names of directors who had never served and knew nothing of the true condition of the organization. They had merely consented that their names might be used as a guarantee of reliability and to aid in the work of soliciting contributions.

One case has been found where a mother and daughter lived comfortably by selling coal given to them by charitable societies. One private institution, now abolished, boarded committed children and received two dollars a week from the city for each child. The children were fed on fish and potatoes at a cost of forty-four cents each per week. After these facts were discovered the city authorities could not remove the children until the Board of Health condemned and closed the building under the provisions of the sanitary code. The minor abuses in the way of aiding undeserving persons extend to nearly all the private societies that receive city money. Those that exercise care and have been long established are often deceived by professional beggars.

After his investigation of the subject the city comptroller established in his office a bureau of examination for the purpose of placing a check on the many small societies that indulge in indiscriminate charity at the expense of the city, but he soon found that he was powerless to correct all abuses. The present condition can not be corrected and public charity placed upon a practical basis and limited to the real necessities of the deserving poor until the city government begins to deal with each society and institution upon its merits. Changes and reforms to the present system will come in time, but progress will be slow because charity is a valid excuse at the bar of public opinion for the reckless expenditure of city money, and for that reason it appeals strongly to the average politician and lawmaker. Charity will cover with a mantle of commendation a multitude of abuses and crave pardon for gross frauds. It is the pastime of the rich and their gratuity to the poor. The magic of the word seems to move a Legislature and open the treasure vaults of city and State.