When charity meets capitalism

Lee Kaplan-Unsoeld, Staff Writer

On Nov. 28 and 29, the 27th annual Teletón will begin to take in donations for children with muscular dystrophy, just as the Telethon in the United States does every Labor Day. The event is a mark of pride and solidarity for many Chileans, yet this year the United Nations condemned the Teletón for stereotyping disabled people, and a handful of disgruntled Chileans claim that this critique is only scratching the surface of a corrupt corporate tax evasion scheme posing as a charity.

Having started five years after the start of General Pinochet’s military dictatorship in 1973, Mario Kreutzberger, popularly known as Don Francisco, brought the Teletón to Chile thanks to Jerry Lewis, the TV personality who originally hosted the American Telethon. According to Don Francisco, the host of the TV program Sabados Gigantes that airs in Chile as well as on Spanish speaking channels in parts of the U.S., he brought the program to Chile to give back to the country that has made his success possible.

Despite the seemingly good intentions of the Teletón, critics claim that the charity event may take more than it actually gives back, including a widely circulated rumor that Don Francisco earns up to five percent of the donations. With the amount of donations totaling over $40 million in 2012, that is not a trifling sum. The Teletón has denied such accusations as false, yet has neither given specifics as to how much Don Francisco makes, nor clarified that he in fact does not profit from the solidarity event.

Aside from rumors though, money from the Teletón does go into able-bodied pockets, over 50 percent of the received donations are destined for people who do not suffer from muscular dystrophy – the employees of the Teletón. In 2012, $13.6 million was paid out in salaries, along with $8.6 million for administration, and over a million more for vacation and travel expenses.

Additionally, the Teletón partners with a number of corporations who offer products during November that are linked with the event, telling consumers that their purchases will contribute to the charity. Unsurprisingly, consumer decisions are changed by these partnerships, and Chileans end up buying more products associated with the Teletón than they do during the rest of the year.

While this fact by itself shows that the publicity generated by the publicity of the Teletón pays back into the pockets of the corporate donors in the form of increased consumption of their products, companies have other tactics for getting more bang for their buck. A carton of milk that would normally cost 800 pesos (about $1.40) gets raised to 1000 pesos (about $1.75) during this period of increased consumption, and the amount of money earned by the company increases significantly.

The companies then turn around and make seemingly huge donations to the Teletón, which captures the hearts of the consumers who are buying the subtly overpriced products, and the increased consumption tangibly lasts for a month or two after the event concludes.

What is more, for every 10,000 pesos that a company donates, they get to write 2,000 pesos off their taxes. For a company like the Grupo Luksic, a business owned by the Luksic family that has made their fortune from copper mines, their donation of 1.5 billion pesos in 2012, or about $3 million, means that they were able to write off $600,000 on their taxes.

That $600,000 is money that could have gone to schools, infrastructure, healthcare, or fighting the poverty that runs rampant here in Chile. Additionally, $3 million donation accounts for about 0.016 percent of the Luksic families $13.8 billion fortune. For an average Chilean earning 200,000 pesos per month, or about $350, a proportional donation would be equivalent to about 3.2 pesos, or less than a cent.

However, some Chileans are aware of this reality yet keep donating to the Teletón because of the good services it provides for kids with muscular dystrophy.

As Ignacia Ugalde, a 23 year old business administration student at the Universidad de Francisco Santa Maria, says,“…the law has an infinite number of loopholes that can be taken advantage of to evade taxes without helping anybody, I would prefer that they evade taxes and help kids who nobody else helps.”

While Ugalde’s analysis of the situation rings true, she acknowledges nonchalantly the fact that these children do not have many other sources of medical help unless they have wealthy parents. General Pinochet’s dictatorship famously derailed the overthrown President Salvador Allende’s transition to a socialist government, and where there would have been universal healthcare under the socialist plan, now there is a lucrative private healthcare industry, and meager public health resources.

For children with muscular dystrophy, going to one of the understaffed, underfunded public hospitals is almost worthless since these hospitals have none of the necessary technology or treatments required to treat muscular dystrophy. Their only option is to go to one of the 13 treatment centers run by the Teletón throughout the country.

Yet, as is often the case, these centers are far from where many afflicted children may live, and transport is not always available or affordable. Furthermore, for some children who have degenerative diseases like muscular dystrophy, the treatment that the Teletón offers is not even free.

It is somewhat similar to federal financial aid in the states, if you are lower middle class, your parents may earn enough to disqualify you from financial aid, yet not enough to actually pay tuition. Instead of being denied a college education however, these kids are denied basic medical attention.

Despite all this, Alejandro Hernández, President and Executive Director of the Fundación Nacional de Discapacitados (the National Handicapped Foundation), has soberly commented, “To applaud the Teletón is to celebrate the discrimination and segregation that people with disabilities live in in our country.”

The United Nations condemned the Teletón for promoting stereotypes this year, and given the publicity that can be seen throughout Chile, it is not hard to understand why. Using kids with disabilities makes it very easy to capture the attention of people because they are drawing on a basic human emotion: compassion.

Using pictures of children with muscular dystrophy on posters all over the streets, as well as using Teletón patients in the 27 hours of the live televised show that forms the base of the Teletón, these individuals are made to seem helpless to society and in need of our paternal care. The Teletón depends on these people seeming helpless, or else there would not be a need for the foundation.

Yet none of the large companies involved in the Teletón seem willing to step forward and provide jobs for people with disabilities, a step that would incorporate them into the society instead of separating and stigmatizing them.

Angela Barraza, a journalist for the independent Chilean publication called El Ciudadano (The Citizen), writes in a recent article,

“The Teletón, in order to sensitize people, put on a macabre spectacle of over-exhibition of children with serious problems. It is a morbid show that links the difficulties [of the children] to an activity that is like begging.”

At this point, one might ask themselves just how exactly the Teletón has survived so long doing what it does, but Chileans love the Teletón almost as much as they love avocados, and Chilean Sociologist Alberto Mayol has a theory to explain why.

Mayol, who works at the Centro de Investigación en Estructura Social (CIES, or the Center of Investigations in Social Structure), in speaking on the subject of the Teletón, characterizes Don Francisco as the “king of the focus of the expenditure”.

As part of his Sabados Gigantes show, Don Francisco changed the Chilean marketplace by making people collect raffle tickets that went along with associated products, giving the consumers the chance to win houses through the contest. Stores or products that did not come with tickets lost popularity, and in that way his influence was peddled.

The Teletón logo is recognized throughout Chile, and products with it increase in sales. According to Mayol, Don Francisco has linked the companies directly to the hearts of Chilean consumers, and the solidarity that they feel when purchasing a product of the Teletón. Yet while the consumers may feel in solidarity with disabled children, they are arguably helping the companies even more.

During the 1970’s, General Pinochet worked with the “the Chicago Boys”, a group of economists trained by Milton Friedman in a University of Chicago program, to implement an experimental breed of free market capitalism as an alternative to the socialism that President Allende had put into action.

Although Don Francisco never came out in support or in opposition of the dictatorship, he was a friend of Pinochet and played a crucial role in the creation of the triumvirate of the state, industry, and the consumers. After the terror and scarcity of goods during the dictatorship and the years leading up to, the general public took right to consuming when the foreign goods came sweeping in with opening of the Chilean market to the international marketplace.

The board of directors of the Teletón is full of top Chilean businessmen, many of whom contribute large sums of money to politicians, while the state gives its blessing to the Teletón to continue its tax-evasion charade, and people keep contributing millions of hard-earned pesos to take care of people who the government does not take care of.

This powerful trio exemplifies the social structure that Pinochet and the Chicago Boys left in their wake after the regime killed and tortured thousands of students, political activists, and artists during the bloody dictatorship. A system in which average citizens work hard for meager wages while paying taxes that their wealthy employers are able to avoid, while still having to pay for things like healthcare for disabled children that would have been funded by the government had President Allende not been killed in the process of the military coup.

Of course it is good that there are some people being helped by the Teletón, however we cannot ignore the fact that the amount of help that is generated for people with muscular dystrophy pales in comparison to the amount of help that large businesses, employees of the Teletón, and the state receive. The businesses receive good publicity, the employees get healthy salaries, and the state is not expected to provide universal healthcare that would include an integrated treatment system for people of all ages, with all sorts of debilitating diseases.

As it is now, kids with muscular dystrophy are used by the Teletón to gain attention, effectively ostracizing and stigmatizing them in the eyes of the society. They are then given treatment that they sometimes have to pay for, only until they become adults, all as part of a grand television program that causes people to consume more of certain products while companies reduce their taxes.

The answer for a situation as complicated as that of the Teletón is never simple, but a good start would be to stop viewing people with disabilities as special cases in need of pity. Instead we can work towards an integrative society in which the needs of all citizens, disabled or not, would be met as a standard practice.

This would include the companies that annually donate small amounts of their immense fortunes to the Teletón working on affording equitable employment opportunities to people of all types, and the government developing a healthcare system that would provide sufficient attention to people with all types of disabilities, sicknesses or diseases.

With these guidelines in place, corporations could simply pay their taxes to help the society out, consumers could buy the products they normally would, and Mario Kreutzberger, or Don Francisco, could survive on his estimated $100 million fortune without his annual Teletón salary.

Due to the nature of the complex nature of the article and the number of different sources, citations will be furnished upon request.


  • Tell Milton (sad he’s dead) we’re no longer “free to choose” since the Chicago Boys returned Chile to build their paradise (with a little help from a dictatorship).
    A Chilean.

  • I’m chilean and this article summarizes what many people think about the teletón but are unwilling to tell. Recently, the national attorney have been showing us the intrincated, forbidden-by-law marriage the right wing politicians and the wealthy built over time. This included illegal campaign funding, tax evasion among other illicits. In short, we’ve been shown how the economic elite (mostly Chicago boys) sequestered the economy and the political order. No surprise they are also using the teleton to evade taxes. Please tell Milton Friedman (sad he’s not alive to see his magnum opus) that since the Chicago Boys built their paradise here with a little help from a dictatorship, we’re no longer “free to choose”.

  • Great article!

    It would be great to know what the sources are. I’m doing a report and I would really appreciate it


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