Kieran Madden

By Kieran Madden - 20/08/2014

Kieran Madden

By Kieran Madden -

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Digging Deeper | Understanding Poverty

Most of us are swimming in ideological waters without even knowing it, and this immersion shapes to some extent how we approach social and policy problems like poverty. In a time where policy is often based on “what works” and “the facts,” understanding theory can be seen as an unnecessary and indulgent distraction from “getting things done.” But theories are better viewed as devices or tools, only useful to the extent that they illuminate and reflect something about what it means to be poor so we can eventually do something to help.


Concepts are abstract ideas that are essentially about meaning and form the building blocks of theory. The two diagrams in Figure 1 are representations, clusters of concepts that when taken together begin to describe what poverty might mean.Despite their differences, both diagrams exhibit three common and crucial ideas:

  1. Poverty is multi-dimensional: poverty isn’t one dimensional; while income is important, for example, poverty is not merely about money.[1]
  2. Poverty has both physical/material and social/ spiritual aspects: as Nobel laureate economist Amartya Sen put it, human lives are “battered and diminished in all kinds of different ways.”[2] People are not isolated material beings; they find meaning, identity and fulfilment in social relationships.
  3. At its core poverty is about unacceptable hardship: labelling the very heart of poverty “unacceptable” means that, as London School of Economics Professor of Social Policy David Piachaud writes, the “use of the term ’poverty’ carries with it an implication and moral imperative that something should be done about it.”[3]



We can’t talk about poverty unless we first talk about yet another concept: well-being. The World Bank, for example, has previously defined poverty as “pronounced deprivation in well-being.”[4] If we take this as our working definition of poverty for now, it begs the question: what exactly is well-being?

Well-being for most of the twentieth century had been seen and applied as an economic idea based on production (measured by gross domestic product (GDP)) or utility. However, in recent years calls have been made locally and internationally to measure for and to look at a more holistic picture of well-being.[5] Like “poverty,” “well- being” is a term that can be defined in many different, and sometimes competing ways.[6] Therefore, there are many approaches to understanding what well-being means:[7] economists bang on about utility, sociologists about welfare, and moral philosophers about virtue or the good life. They are all, however, grasping for answers to the questions: what does a good life look like, and what is the fundamental nature of human need?[8]

The good life

Let’s start with “the good life.” There is a great divide among moral philosophers on what it looks like, and what we need to pursue it. Two schools of thought dominate: perfectionism and pluralism.

For perfectionists, like moral philosopher Alasdair Macintyre in the tradition of Aristotle a life can be “lived well”—that is, it can flourish.[9] Aristotle called this state eudaimonia, which can be loosely translated as “a virtuous life of judging and acting.”[10] Conversely it also means that a life can go badly—the pursuit of wealth for wealth’s sake, for example, is a vice, and results in a state of life that is morally “bad.” Virtue is to be promoted by law and culture which means remaining neutral in a moral sense is not an option.

Pluralists, like political philosopher John Rawls, on the other hand, reject this idea and argue that it is impossible to make a moral judgment on how good or bad others’ lives are. Rawls expressed this by saying we must acknowledge “a diversity of conflicting, and indeed incommensurable, conceptions of meaning, value, and purpose of human life (or…conceptions of the good).”[11] Under this approach one way of life is just as morally good as any other, provided it was rationally chosen.[12] Protecting the freedom to choose is of utmost importance. Both New Zealand and Australian Treasuries hold to this view.[13]


Needs perhaps form a bridge between this perfectionist- pluralist divide. Both Aristotle and Rawls claim that people need resources to draw on and to enable them the opportunity to pursue “the good life.”[14] Aristotle claimed that eudaemonia involved not only the moral life described above, but also a material life: that people need a sufficient amount of material goods, health, wealth, and honour in order to flourish.[15] Rawls too, argued that “primary goods” were needed for this, like income and wealth, rights and liberties. It is worth examining these needs more closely.

When Shakespeare observed that “the art of our necessities is strange,”[16] he was on to something. The word “need” has a similar moral force to the word poverty because unlike wants, desires or preferences, unmet needs result in harm or suffering.[17] Philosophers have identified universal basic needs, which they call “categorical needs.”[18] These are seen as preconditions to well-being rather than well-being itself, and they often include physical health and autonomy, the latter understood as the ability to choose what one does and how one does it.[19] For these basic needs to be met, they require certain other things (called satisfiers) like basic education, work and physical security.[20]

Surprisingly, people generally agree about needs when asked. Despite the seemingly irreconcilable views of poverty in modern countries, evidence from the UK suggests that within that society at least, there is a “broad public consensus on the necessities of life – a consensus that cuts across social divisions such as those relating to class, gender, ethnicity and age.”[21] In other words, while people tend to disagree about the meaning, causes and consequences of poverty within a particular society, they broadly agree about the necessities of life, both material and social, that no one should be without.


New Zealanders today see themselves as a country of “doers” rather than “theorisers,” free from the shackles of ideology.[22] And yet, while given a bad name of late, ideologies are a helpful tool to understand the different perspectives people have on poverty. By nature, ideologies simplify a complex reality where the political, social and economic intersect.[23] Like constellations in the stars, ideologies emphasise both the brightest, most influential ideas and the logical relationships between them.[24] They are a set of examined or unexamined ideas that together critique the existing society and cast a vision for a better one with a strategy for getting there.[25] Given that poverty is a moral problem in need of a solution (or, at the very least, a band-aid), this makes ideologies particularly relevant to poverty.

The ideologies of poverty: state and market

Various strains of liberalism and socialism have traditionally dominated the ideological landscape in New Zealand.[26] A brief history is illustrative.[27] Nineteenth- century liberalism brought capitalism to New Zealand’s shores, and with it a sense of individualism and notions of the deserving and undeserving poor.[28] The long depression in the 1880s and the Great Depression highlighted that even under a market economy this “new society” could be plagued by poverty like the “old world,” and not solely because of moral failings.[29] Social liberals, democratic socialists and social democrats all helped lay the foundation of the welfare state in New Zealand in the 1930s to protect New Zealanders from increasingly volatile international pressures.[30] Full employment by a male bread-winner supporting his family was the primary goal of this welfare system, achieved chiefly through a minimum wage, protected economy and state-owned assets—a system known in academia as a “wage- earners’ welfare state.”[31] Both Labour and National governments incrementally built upon this foundation in the prosperous post-war period.[32]

The Labour Party, despite early socialist beliefs about restructuring the capitalist economy, shifted towards a more social democratic outlook that sought to humanise rather than abolish the market, harnessing the power of the state to do so.[33] The 1972 Royal Commission reflected this shift in social vision by recommending a more generous welfare state based on the ideas of citizenship and “belonging and participation in society.” Only a few years after the Commission, however, a failing economy due to oil shocks, rising inflation and unemployment signified the beginning of the end for the wage-earners’ welfare state. Influenced by free-market liberal ideas, the Fourth Labour Government swiftly dismantled the economic structure that supported the system, primarily by opening up and deregulating the economy. National went a step further by significantly reforming social policy in the 1990s, cutting benefits, contracting out services to the private sector and reforming the labour market.[34] The market gained primacy and a “minimalist safety net” was put up in place of a “cradle-to-the- grave” system for those who were unable to participate.[35] Tackling dependence on welfare became a priority for government too.

Conversely it also means that a life can go badly—the pursuit of wealth for wealth’s sake, for example, is a vice, and results in a state of life that is morally “bad.” Virtue is to be promoted by law and culture which means remaining neutral in a moral sense is not an option.

Both ideologies presume a market economy and some role for the government in the provision of social security,[26] however they differ as to what roles the market and the state should play when fighting poverty. Free-market liberals tend towards solutions promoting economic growth and reducing unemployment, while social democrats are more likely to promote redistribution in the name of social justice. The ideologies also differ on the causes and consequences of poverty. As Lister argues, “[i]mplicit in definitions are explanations of poverty and its distribution, which generally reflect individualistic or structural perspectives.”[37] The individualistic perspective usually associated with the “right” tends to blame the character of the poor, their family, or the sub-culture for their circumstances, while the “left” blames structural problems or lack of resources beyond control of the individual—in other words, the system.[38] This clash is primarily the result of contrasting views on individual responsibility versus social rights.

As we’ve seen, ideologies, like political parties and the people in them, can be contradictory at times. Accordingly, most of New Zealand’s parties are “hybrids”—politics here can be largely populist and vote- driven where parties are ideologically flexible: policies are often made to win elections rather than elections won to make policies.[39] Nevertheless, ideologies remain a useful tool to explain a complex political reality. Aside from competing views on the roles of the market and the state and the causes of poverty, each ideology also has distinct beliefs, values and principles around concepts like justice.[40] As poverty deals with the “unacceptable,” views on justice become important. Just what is unacceptable, why is this so, and what should we do about it?


Different ideologies emphasise different aspects, or principles of justice.[41] Where we stand as a society determines which principles will be reflected in our cultural norms and governmental laws, how social goods are distributed, and how societal outcomes judged.[42] As philosopher Robert Nozick argued, “to fill in the blank in to each according to his ________” has been the ongoing concern of theories of justice.[43] Leading contenders for the blank, that is principles of justice, are the distinct and yet related aspects of merit, equality and need.[44]

A thought experiment highlights how each of these principles of justice might make a legitimate claim.[45] Suppose three children—John, Emma and Christine— are arguing about a flute. Christine says it’s hers because she made it with her own hands, and should at least have a play before the others take it from her (merit). Emma says it’s hers because while she has other toys, in her family everybody is promised a flute and she hasn’t one already (equality). Finally, John says it’s his because he hasn’t any other toys, and this will give him something to play with at least (need). Underlying each of these claims is a sense of how to treat others fairly, and none can be dismissed out of hand.
However, with respect to reducing poverty and enhancing well-being, meeting basic needs is of key concern.[46]


If ideologies are the drivers that compel and shape policy, institutions are the vehicles. The design and workings of various welfare states can tell us a lot about how a particular society thinks about poverty, justice and the proper role of the state.[47]

Perhaps the most famous and influential classification of welfare states comes from Danish sociologist Gøsta Esping-Andersen.[48] In The Three Worlds of Welfare Capitalism Esping-Andersen theorises how the institutions of state, market and family interact to produce work and welfare, making distinctions between the different worlds of conservative, liberal and social democratic welfare states.[49]

New Zealand is most commonly classified as a liberal welfare state, as the table highlights, although given our history some contest this.[50] Countries do not always fit neatly into one of these boxes however, because they can have features of other regime types.[51] New Zealand, for example, has a strong emphasis on means-tested benefits which is a characteristic of liberal regimes, but at the same time has a universal pension (New Zealand Superannuation), a feature principally associated with social democratic regimes. This reflects the ideological mix both between and within political parties in New Zealand discussed earlier.


Figure 3 ties ideologies, principles of justice and welfare state regimes together and shows what it might mean for policy direction. The three-step process from ideology to policy type is not as straight-forward as it may seem, however, it is perhaps more accurate to describe principles as informing rationale for policies

While a social democratic view will tend towards more equal outcomes and opportunities through redistribution, a liberal perspective will generally attempt to distinguish those in need of benefits through means-testing. There is some overlap between principles here too. New Zealand Superannuation serves again as a useful example. It rests on a sense of equality and universality, but also to some extent on the assumption that those receiving it have contributed to society for many years, and deserve to be looked after. Incidentally, promoting and protecting well- being through work has been perhaps the strongest and most persistent theme in New Zealand’s welfare history.[52]


Tracing how competing concepts can influence policies has shown how influential ideas can be, even in pragmatic New Zealand.[53] We have seen how competing ideas about well-being and needs are filtered through ideologies with their conceptions of justice, and finally channelled through the welfare state, out-flowing in policies to help the poor. The question then is not whether values and ideas matter, but which values and ideas should matter.

If we return back to the World Bank’s broad definition of poverty from the start of this section as a “pronounced deprivation of well-being,” anyone lacking in basic needs like meaningful relationships, education or shelter could be seen as being deprived of well-being and subsequently poor. But while improving well-being or “advancing the richness of human life” for everybody is a legitimate policy goal,[54] it doesn’t quite get to the “core” of poverty. For this we must focus on the definition process.

This is an extract from Kieran’s research series “The Heart of Poverty | Matching Passion with Precision for Struggling New Zealanders” Issues Paper. (Released 2014) 





[1] B. Nolan and C. Whelan, “Working Paper: Using Non-Monetary Deprivation Indicators to Analyse Poverty and Social Exclusion in Rich Countries: Lessons from Europe?” (2009), 3. Although, as Paul Spicker writes, “[o]ne of the most widely used approaches to the measurement of poverty is in terms of income, to the point where some social scientists have started to think that poverty is low income.” P. Spicker, Idea of Poverty (Bristol: Policy Press, 2007), 232. Income is an extremely important aspect of poverty, however, and should in no way be dismissed entirely.
[2] A. Sen, “A Decade of Human Development,” Journal of Human Development 1, no. 1 (2000), 18.
[3] D. Piachaud, “Problems in the Definition and Measurement of Poverty,” 161.
[4] J. Haughton and S. Khandker, Handbook on poverty and inequality (World Bank Publications, 2009), 1.
[5] J. Stiglitz , A. Sen, and J. Fitoussi. “The measurement of economic performance and social progress revisited” Commission on the Measurement of Economic Performance and Social Progress, (2009), 12. In New Zealand, Treasury acknowledged that “while income and economic production are important,” there are drawbacks from using just GDP as a proxy measure, so following the lead of the OECD, IMF and Australian Treasury they developed a multi-dimensional “higher living standards framework.” New Zealand Treasury, Working Towards Higher Living Standards for New Zealanders (Wellington: New Zealand Treasury, 2011).
[6] M. McGillivray and M. Clarke eds., Understanding human well-being (Tokyo: United Nations University Press 2006), 3.
[7] Researchers from the UK-based Family and Parenting Institute identify at least six different approaches to understanding what well-being means: the fulfilment of human needs; the achievement of human capabilities; the availability of resources; the realisation of social and political goals and values; research evidence; and quality of life approaches. I. Wollny, J. Apps, and C. Henricson, Can government measure family wellbeing? (London: Family and Parenting Institute, 2010), 18-19.
[8] H. Dean, Social Policy (London: Polity Press, 2006), 12. For a brief history/overview of the process of well-being see J. Hall, E. Giovannini, A. Morrone and G. Ranuzzi, Framework to Measure the Progress of Societies, Working paper No. 34 (Paris: OECD, 2010) 7-9.
[9] A. Fives, Political and philosophical debates in welfare (Palgrave Macmillan, 2008) 2-4. Cultural Traditions, institutions and conventions in a particular society reveal what a life lived well looks like. P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory (Wiley-Blackwell, 2008), 350, c.f. W. Kymlicka, Contemporary Political Philosophy: An Introduction, 209-21.
[10] T. Fitzpatrick, Welfare Theory, 2nd ed., 6.
[11] J. Rawls, “The Idea of an Overlapping Consensus,” Oxford Journal of Legal Studies 7, no.1 (1987).
[12] J. Rawls, A Theory of Justice (Cambridge: Harvard University Press, 1971) 424-5.
[13] In New Zealand: “Improving Living Standards (or well-being) is about increasing the freedoms of individuals to enjoy the kinds of lives they wish to live,” and for Australia: “In understanding its mission, Treasury takes a broad view of wellbeing as primarily reflecting a person’s substantive freedom to lead a life they have reason to value.” G. Karacaoglu, Improving the Living Standards of New Zealanders, presentation at Wellbeing and Public Policy Conference, Wellington (2012). “Social and economic wellbeing” is the phrase usually used in New Zealand to describe “the good life.”
[14] This resonates with what is called the “basic needs approach” to development prominent in the 1970s, that “the objective of the development effort is to provide all human beings with the opportunity for a full life. However a “full life” is interpreted, the opportunity for achieving it presupposes meeting basic needs.” P. Streeten, First Things First: Meeting Basic Human Needs in the Developing Countries, (World Bank Publications, 1981), 21.
[15] Aristotle noted that we need material goods before we can develop virtue: “it is impossible, or not easy, to do noble acts without the proper equipment” Nicomachean Ethics, I. 8, 1099a30, cited in A. Fives, Political and philosophical debates in welfare (2007), 2-3. See also J. Hall, E. Giovannini, A. Morrone and G. Ranuzzi, Framework to Measure the Progress of Societies, Working paper No. 34, 8.
[16] W. Shakespeare, King Lear (III:3:70)
[17] D. Wiggins, Needs, Values, Truth: Essays in the Philosophy of Value, 3rd ed. (Oxford University Press 1998).
[18] L. Doyal and I. Gough, A Theory of Human Need, (The Guilford Press, 1991), 5.
[19] L. Doyal and I. Gough, A Theory of Human Need, 53.
[20] See the work of Manfred Max-Neef and Abraham Maslow for more. Maslow believed basic needs must be met before ascending to higher needs, while Max- Neef believed they were overlapping and interdependent, and trade-offs must be made to satisfy them. M. Max-Neef, Human Scale Development: Conception, Application and Further Reflections (Apex Press, 1991); A. Maslow, “A theory of human motivation,” Psychological review 50, no. 4 (1943).
[21] Several surveys suggest that there is not merely consensus, but “virtual unanimity of opinion” that items such as a damp-free home, two to three meals a day, heating and warmth and some social activities like visiting friends or family in hospital are necessities. D. Gordon et. al. Poverty and social exclusion in Britain (London: Joseph Rowntree Foundation, 2000), 98, 112.
[22] P. Moloney, “New Zealand’s Ideological Tradition” in R. Miller ed., New Zealand Government and Politics (Oxford University Press, 2006), 36.
[23] G. Taylor, Ideology and Welfare (Palgrave Macmillan, 2007).
[24] P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory.
[25] T. Ball and R. Dagger, Ideals and Ideologies: A Reader (HarperCollins Publishers, 1991) cited in T. Fitzpatrick, Welfare Theory, 2nd ed., 126. See also P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory and G. Taylor, Ideology and Welfare.
[26] P. Moloney, “New Zealand’s Ideological Tradition” in R. Miller ed., New Zealand Government and Politics. While there are many other possible ideologies to include, these two were chosen because of their relevance to time and place and ability to influence and recruit advocates. M. Freeden, Ideology: A very short introduction (Oxford University Press, 2003).
[27] It is certainly not exhaustive, however. See M. O’Brien, Poverty, Policy and the State, 13-37 for a broader historical overview of the social security system (focussing on income support) in New Zealand.
[28] M. Belgrave (2012), 7.
[29] M. Tennant, M. O’Brien & J. Sanders, The History of the Non-profit Sector in New Zealand, (Office for the Community and Voluntary Sector, 2008), 9.
[30] G. Taylor, Ideology and Welfare, 151; R. Miller, Party Politics in New Zealand (Oxford University Press, 2005), 154.
[31] F. Castles, The Working Class and Welfare: Reflections on the Political Development of the Welfare State in Australia and New Zealand (Sydney: Allen and Unwin, 1985).
[32] R. Miller, Party Politics in New Zealand, 155.
[33] R. Miller, Party Politics in New Zealand, 153-4.
[34] M. Belgrave, “Needs and the State: Evolving Social Policy in New Zealand” in B. Dalley & M. Tennant eds., Past Judgement: Social Policy in New Zealand History (Dunedin: Otago University Press, 2004), 36.
[35]R. Stephens and C. Waldegrave, “The Effectiveness of the Transfer and Tax System in Reducing Poverty in 1998,” Social Policy Journal of New Zealand, 16 (2001), 78.
[36] Some, like Francis Fukuyama and Thomas Friedman, have heralded that this structure signifies “the end of history” in a “golden straitjacket”, where globalised, liberal democracies are “the end point of mankind’s ideological evolution.” All developed democracies, regardless of the dominant ideology, have converged and developed welfare states. M. Hill “What is a welfare state?” in The Routledge Handbook of the Welfare State (Routledge, 2013), 11-19.
[37] R. Lister, Poverty, 35.
[38] See P. Spicker, The Idea of Poverty, 111 for the “six main classes of explanations as to why people become poor.” The “right” might also blame the state for overreaching into people’s lives and causing dependence.
[39] A. Downs, An Economic Theory of Democracy (Harper Collins, 1957), 28 cited in R. Miller, Party Politics in New Zealand, 168-169.
[40] P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory , 3-7. Along with justice, Christine Cheyne, Mike O’brien and Michael Belgrave suggest there are six other key dimensions used to analyse well-being: equality, freedom, need, risk, resilience and citizenship. C. Cheyne, M. O’brien and M. Belgrave, Social Policy in Aotearoa New Zealand 4th ed. (Oxford University Press, 2009), 10.
[41] Paul Schumaker likens this to Manfred Steger’s analogy of the blind men and the elephant. In this case, the blind men represent ideologies, and the elephant justice. Each blind man feels a particular part of the elephant (the trunk or ears perhaps) and claims this is the whole thing, while in reality they are only feeling part of the whole. It follows that the blind men, like ideologies, are grasping the truth, but only a partial truth. P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory, 435.
[42] P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory, 5-6.
[43] R. Nozick, Anarchy, State and Utopia (New York: Basic Books, 1974), 159.
[44] This framework is based on the work of Allyn Fives and David Miller. See A. Fives, Political and philosophical debates in welfare, 1-20 and D. Miller, Principles of Social Justice (Harvard University Press, 2001).
[45] Thought experiment here is a modified version of Amartya Sen’s flute thought experiment. A. Sen, The Idea of Justice (Harvard University Press, 2009), 13-14.
[46] Paul Streeten writes that there is: “nothing wrong with an abstract moral objective, but if policies are judged by the evident reduction of suffering, meeting basic needs scores better than reducing inequality. See P. Streeten, First Things First: Meeting Basic Human Needs in the Developing Countries, 17-18.
[47] A. Fives, Political and philosophical debates in welfare, 2.
[48] G. Esping-Anderson, The three worlds of welfare capitalism. (Princeton University Press, 1990). Esping-Anderson’s classification is only one of many. Classifications are also called welfare state regimes, or typologies. They are, as Kees van Kersbergen explains, a “a meaningful reduction of complexity for analytical and comparative purposes that necessarily simplify reality.” K. van Kersbergen, “What are welfare state typologies and how are they useful, if at all?” in The Routledge Handbook of the Welfare State, 145.
[49] The Conservative Welfare State is included for reference, but it is not relevant to the New Zealand context due to our history. It could be argued, however, that a traditional maori understanding of welfare, with a strong focus on whānau relationships rather than individuals (low individualisation), could fit into this category more easily. See Families Commission Families and Whānau Status Report for well-being frameworks for both Pakeha and Maori. Families Commission, Families and Whānau Status Report (Wellington: Families Commission, 2013), 117-131.
[50] Table adapted from the synthesis of Esping-Anderson and Richard Titmuss’ Welfare Regime typologies by Christian Aspalter. C. Aspalter, “Real-typical and ideal- typical methods in comparative social policy” The Routledge Handbook of the Welfare State, 301-302. See also K. van Kersbergen “What are welfare state typologies and how are they useful, if at all?” in The Routledge Handbook of the Welfare State, 141, for a good overview on Esping-Anderson’s theory.
[51] Francis Castles, for example, offered an alternative approach to Esping-Anderson that grouped nations into “families” based on “shared geographical, linguistic, cultural and /or historical attributes’ [that] may lead to ‘distinctive patterns of policy outcomes.” This explains why English-speaking countries have similar systems. F. Castles, Families of Nations: Patterns of Public Policy in Western Democracies (Dartmouth Publishing, 1993), xiii.
[52] C. Aspalter, “Real-typical and ideal-typical methods in comparative social policy” in The Routledge Handbook of the Welfare State, 293-307
[53] M. Belgrave, Social Policy History: Forty Years on, Forty Years Back, 16.
[54] P. Schumaker, From Ideologies to Public Philosophies: An Introduction to Political Theory.
[55] This is the goal of “development theories.” Some describe this in the negative sense as reducing “ill-being.” A. Sen, “The concept of development” Handbook of development economics 1 (1988), 9-26 cited in UNDP, Human Development Reports, About Human Development, (accessed Jan 24 2014). Even the idea of reducing “ill-being,” the opposite of well-being, are too broad and may or may not be related to poverty. R. Lister, Poverty, 18.

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