Among the sillier critiques of the idea of private charity as a substitute for public, is that there are so few private charities providing all the things that government does.
Savor that for a moment. Roll it around in your mind. No one gives welfare beneficiaries cash. Why could that be? Okay, if you really don't know, answer below the fold.
To be sure, I'm not confident that private charity could fully replace government charity, and I'm certainly not eager to raze our current raft of poverty programs on the odds that private groups might keep children from starving. I think a big part of the problem with the libertarian movement is that it's filled with people theorizing about the new libertarian state, or agitating for it, but very few trying to set up the auxiliary services, like private charities for other causes, that will be needed in the new system. This leaves them vulnerable to the charge that they don't actually care about any of the people that this private charity is supposed to help.
There are great libertarian style charities, like the Children's Scholarship Fund. More of us should be donating to them, promoting them, and most importantly, starting and running them. Not me, of course; I've got better things to do. But someone oughta.
Answer: Because, of course, the cash is income, which means it will substitute nearly 1-for-1 for benefits, doing no good at all; or actually pushing the beneficiaries above the threshhold for stuff like Medicaid. The high marginal tax rate faced by the poor (because of benefit loss) is one of the primary barriers to both work, and private poverty-focused charity.
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