Reprinted from "Fanatics and Fools: The Game Plan for Winning Back America" with permission of Miramax Books, a division of Hyperion.

I have no greater heroes than the men and women who are working up close and personal--sometimes wrenchingly so--to turn lives around. But they will be the first to tell you that even if they never slept, they would never on their own be able to turn around the tragic realities that surround us--including the fact that America has more homeless children today than at any time since the Great Depression. The bottom line is that the task of overcoming poverty is too monumental to be achieved without the raw power of government appropriations.

Yet programs that help the poor are all too often the first to be scaled back when self-styled "compassionate conservatives" take office--whether in George Bush's America, where the House passed a bill requiring working mothers on welfare to work forty rather than thirty hours a week to qualify for assistance, or in Arnold Schwarzenegger's California, where the very first spending cut announced by the new governor was a freeze on cost-of-living adjustments for welfare recipients.

During the recall campaign, Schwarzenegger was asked if he trusted the private sector. "Oh, absolutely," he replied. Although my faith was never that unwavering, I too once believed that the private sector--especially Republican multimillionaires who talk incessantly about less government--would rise to the occasion and provide the funding needed to replicate and sustain on a large scale the many private social programs that have proven successful. But I found out firsthand that it's much easier to raise money for fashionable cultural causes and prestigious educational institutions than for homeless shelters and mentoring programs for at-risk children. The annual $3,500-a-plate, black-tie ball for the Costume Institute of the Metropolitan Museum of Art raises enough money to buy plenty of warm winter coats for children in New York City. But instead the funds go to preserving and displaying the evening gowns of the social elite.

And there is, of course, no consistency in charitable giving. It fluctuates depending on the economy, the stock market, and the philanthropists' mood. Donations by the country's top sixty philanthropists for example, totaled $4.6 billion in 2002, down from $12.7 billion in 2001. These drastic fluctuations are not the only problem. If the private sector is to play a serious part in addressing social crises in America, we need to stop defining charitable giving as any tax-deductible contribution to any old 501(c)3-a classification that lump together a struggling soup kitchen and a university with an endowment larger than the GDP of the poorest one hundred countries. There's a compelling reason for the government to not reward these donations equally. Just take a look at the Slate 60, the online magazine's answer to the Forbes 400. It's an annual list of America's top charitable givers. Year in and year out the list is dominated by those giving to already flush universities and museums--often to fund buildings bearing the giver's name.

After I wrote about my objections to the buck-is-a-buck-is-a-buck standard of the Slate rankings, its then editor, Michael Kinsley, suggested I come up with a formula for adjusting the list-correcting for true philanthropic spirit as one might correct for inflation. So in 2000 I devised a compassion index, or as Slate dubbed it, "the Slate 60 Huffington Virtue Remix." The Slate 60 is based on the principal of praise, but those on the uncorrected list got plenty of that. I thought it was time for a little humiliation.

The virtue remix awarded minus points for self-aggrandizing gifts that only serve to make the world of the superrich just a little nicer, and plus points for gifts that help overcome poverty, alleviate suffering, and turn lives around. For example: minus 10 percent for investing in buildings instead of people (with another 15 percent deduction if the gift goes to a building named after the donor); 20 percent off for "self referential giving" directly connected to the donor's business interests; and a sliding scale of demerits based on the age of the donor at the time of giving--a.k.a the "What took you so long?" factor. A 10 percent bonus, on the other hand, was awarded for giving to K-12 education, where the crisis is, rather than to Ivy League colleges, where the prestige and the big bucks are. And there was a 15 percent bonus if giving time went along with the gift of money.

The effect of the index on that year's list was telling. Forty-three donors had more points taken away than added, while only four gained points A few donors dropped more than twenty places, and one moved up thirteen. The biggest hit was taken by William Porter, founder of the Internet brokerage E*Trade, and his wife, Joan. Their $25 million gift to MIT had placed them in a tie for the twenty-seventh spot on the original Slate 60, but they dropped thirty sports for donating a) to a building at b) an already well-endowed institution that c) is related to Mr. Porter's business and d) was named after himself.

Also feeling the sting of the index was Robert G. Mondavi, chairman of the Robert Mondavi Winery, who was docked 30 percent for his self-referential gift of $20 million to the American Center for Wine, Food, and the Arts in his hometown of Napa, California. After sniffing and sipping (and yes, spitting), I found the donation cheeky and vainglorious, with strong notes of venality, and a hint of disingenuousness. Then there was Elmer E. Rasmuson, the former chairman of the National Bank of Alaska, who was penalized 20 percent for waiting until his ninetieth birthday party to announce a $50 million gift to the Anchorage Museum of History and Art. Did Elmer hit eighty and think, I'd better wait, there might be a $50 million emergency just around the bend? On the brighter side of the remix, cell phone mogul Craig McCaw and his wife, Susan, moved up thirteen places for their $15 million to the Foundation for Community Development and the Nelson Mandela Foundation, striving to being health care, economic development, and peace to Africa.

The original catalyst for the Slate 60 was Ted Turner's warning that the "superrich won't loosen up their wads because they're afraid they'll reduce their net worth and go down on the Forbes list." His corrective was "to honor the generous and shame the stingy." The next step is for us all to acknowledge the obvious: Not all generosity is created equal, and so we need to honor those among the generous whose sights extend beyond their own enclaves. Compassion and philanthropy can't fix America's problems on their own. But they fill an even smaller portion of the gap between rich and poor when they are directed where they are not urgently needed.

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