What are the social implications of using either private philanthropy or public programs to help people?

I find it ironic that very wealthy people set up foundations and then start giving their money back to those they may have earned it off of in the first place. Why? Why does it happen this way? I don’t mean why in the sense of how it works. I know how it works. I’m wondering why we choose to do it this way?

A private philanthropists gets to decide on his or her own what they want to support with their philanthropy. They might support the fight against this or that cancer, or support research into better teacher training, or support for housing (Habitat for Humanity) or whatever piques their interest.

What is of crucial importance here is that the philanthropist gets to decide how much money to spend on charity and what charity to spend it on.

The other form of “philanthropy” is public. It might be useful to think of taxes as a form of tithing. Churches tithe and then use that money to run the church and to provide services, usually for free.

The government does the same thing except the “tithe” is not voluntary. It is then called taxes, and we all have to pay them. The government turns around and spends the money on services for us. Most of the money helps the middle class and upper classes, but some also goes to the poor in an effort to help them get out of poverty.

What I want to know is what are the implications of using private philanthropy to provide services to the poor vs using public “philanthropy.” What is the difference between having individuals make the choice of what to support vs having the collective group decide what to spend money on? Do you trust private philanthropists? How about public philanthropy?

Which way do you think is better? Why? Should we cut government services and let private philanthropists do the work? Or should we tax wealthy folks so we can all play a role in the decision about what to do? Or is the balance just fine right now, thank you very much?