The Most Dangerous Kind of Charity Is the Kind That Makes the Giver Feel Good
By Mike DiGiovanni | The Builder’s Mindset
The building industry is filled with generous people, companies that donate millions of dollars, executives who serve on nonprofit boards, employees who volunteer their time, and builders who regularly contribute homes, materials, labor, land, and money to communities that need help. Most of it comes from exactly the right place, which is why one of the hardest questions we can ask about generosity is also one of the most necessary: what if our help is actually hurting the people we are trying to help?
That question emerged during my recent conversation with Matt Baehr, executive director of Homes for HOPE, and it came through a story that should make any business leader uncomfortable. The organization traces its roots to builder Jeff Rutt of Keystone Custom Homes, who in the 1990s was working through his church to send containers of aid to a partner church in Ukraine after the fall of the Berlin Wall. The effort was compassionate, the need was real, and by almost any traditional measure of charitable giving, sending desperately needed goods into a struggling community would have looked like exactly the right thing to do.
Then the pastor in Ukraine told him to stop.
The message was essentially that their helping was hurting because local businesses could not compete against free. The donated goods were meeting immediate needs while simultaneously undermining some of the very economic activity the community would eventually need if it were ever going to become stronger, and that forced Rutt to confront something we rarely want to admit about generosity: good intentions do not guarantee good outcomes.
We Have Become Very Good at Measuring What We Give and Not Nearly Good Enough at Measuring What It Produces
Rutt responded the way many successful businesspeople would respond when told that a solution was not working: he designed a better one. The area had abundant sunflowers, so he developed a business plan around a sunflower-processing machine that could produce oil, provided the plan and equipment to the church, and returned later expecting to see a functioning enterprise. Instead, the machine was sitting essentially where he had left it,
gathering dust, because he had solved the first problem without understanding the deeper one.
He had stopped exporting goods and started exporting his ideas.
That distinction deserves far more attention than it receives because it applies well beyond international aid. Successful people are particularly vulnerable to believing that because we know how to solve our problems, we know how to solve someone else’s, and the more successful we become, the easier it is to confuse experience with universal understanding. We walk into companies, communities, families, ministries, and sometimes entire cultures carrying solutions developed through our own circumstances and then become frustrated when the people receiving them do not produce the outcome we expected.
Homebuilders should understand this better than almost anyone because we know that a product that works exceptionally well in Phoenix may fail in Atlanta, a specification appropriate at $800,000 may destroy affordability at $350,000, and an operating process that works for a 500-unit builder may collapse inside a company building 5,000 homes. Context matters in business, yet somehow we can forget that context matters just as much when we are trying to help people.
Dependency Can Be Created With the Best of Intentions
The breakthrough in the Homes for HOPE story came when Rutt discovered microfinance and began asking not simply what could be given to people in need, but how capital, training, accountability, community, and opportunity could help them build something for themselves. As Matt explained through the concept of “toxic charity,” repeated handouts can gradually move from appreciation to expectation, entitlement, and ultimately dependency. That does not diminish our Christian obligation to show mercy or provide immediate relief in times of genuine crisis; it challenges us to think beyond the emergency. Once the crisis has passed, the harder question is whether our compassion continually removes responsibility or helps restore the capability, dignity, and opportunity for people to move forward on their own.
Dignity Is More Difficult to Give Than Money
Homes for HOPE eventually built its model around something the homebuilding industry understands well: capital should be productive. Builders and trade partners generate contributions that help fund small loans averaging roughly $400 to entrepreneurs with little or no access to conventional financing, while also providing biblically based business training, accountability, and community. Because repaid capital can be put back to work, approximately $450 million raised over 27 years has helped enable more than $2.3 billion in loans, with a reported repayment rate of roughly 97 percent. At an estimated cost of just $25 per family per year, a $100,000 contribution from one builder relationship can potentially serve about 4,000 families. That is not simply charity. That is leverage.
The Building Industry Should Stop Thinking About Generosity as Something That Happens After Profit
Business often treats philanthropy as something that happens after the work is done: generate the profit, determine what remains, and decide how much to give away. Homes for HOPE offers a different model by making the operating platform itself part of the giving mechanism. Homebuilding is uniquely suited for this because every home represents an interconnected network of builders, trades, suppliers, manufacturers, lenders, and service providers capable of turning relatively small individual contributions into something much larger.
A trade can contribute labor, a supplier can discount materials, a service provider can reduce a fee, and the builder can contribute profit—allowing the same network that creates economic value to create charitable value. The specific mechanism can vary by company, but the larger principle remains: what would happen if generosity became part of the operating system rather than an allocation made after the operating system had finished its work?
Christian Business Leaders Should Be Especially Willing to Measure Outcomes Instead of Intentions
This became personal for me as Matt and I discussed what it means to be openly Christian in an industry where faith is often kept outside the professional conversation. I can write about the cost of building a house and generate tens of thousands of impressions, then write about what Christ has done in my life and reach a fraction of that audience. But becoming frustrated by those numbers would mean I was measuring the wrong thing. After decades of measuring performance through margins, closings, revenue, followers, and growth, I have to remind myself that if one person moves closer to Christ because of a fellowship, conversation, article, or post, the metric that matters most may never appear on a dashboard.
Matt described a similar shift at Homes for HOPE. An objective once focused on making the organization more “top of mind” in the building industry was changed to helping more people become aware of what God is doing through Homes for HOPE. It is a subtle change in language with a profound difference in purpose: the difference between promotion and stewardship.
An Industry Under Pressure Needs More Than Another Business Strategy
Matt also raised something homebuilding rarely discusses openly: the people leading these companies carry enormous pressure from capital, margins, market cycles, employees, family, and succession and professional success does not answer the deeper questions of faith,purpose, and responsibility. That helps explain why the Prayer Breakfast at IBS grew from roughly 4 –50 attendees its first year to nearly 200 at its most recent gathering. Our industry has countless conferences devoted to making builders better operators, but the person making those decisions is still a person, and no operating strategy can answer the question of what all that success is ultimately for
The Most Important Return on Capital May Never Appear on a Financial Statement
Every disciplined builder asks whether capital, land, people, and time are being deployed where they can create the greatest return. We should bring that same discipline to generosity. The question is not whether we should give, but whether our giving leaves people stronger preserving dignity, building capability, multiplying opportunity, and ultimately empowering people to help themselves and others.
Our industry already knows how to turn disconnected resources into something valuable, and Homes for HOPE demonstrates what can happen when that ability is applied beyond the next closing. We should never confuse how generous we feel with how much stronger someone becomes because of our generosity. The strongest evidence that we helped may eventually be that they no longer need our help. That is not the end of generosity. It may be its greatest success
