[ideonexus]

Summary: The wealthy are using non-profits, charities, and foundations to push political agendas at the expense of taxpayers who are footing the bill because these institutions are also tax write-offs.

The article focuses on these organizations pushing advocacy, but I would also add that many "non-profit" organizations are actually incredibly profit-focused. An early introduction to this for me was growing up next to the Christian Broadcasting Network, a charitable organization that was raking in millions of dollars selling alternative medicines, opening five-star restaurants, hosting luxurious retreats, while also raking in donations from the poor people who would tune into the show seeking god's grace [1].

I see the same thing with Mega Churches, which are springing up like fast food franchises all over the DC-Metro region. These enormous buildings are raking in profits every Sunday while giving nothing back in taxes to pay for the roads, utilities, and emergency services the community provides for them. Taxpayers are losing $71 billion a year in revenues because of these for-profit franchises [2].

It isn't just religious institutions either. I've stopped giving blood to the American Red Cross in favor of donating it directly to my local hospital so they don't have to pay the overhead that comes with Red Cross blood [3]. The DC-Metro area is packed with "non-profits" that are really for-profit companies that pay out their profits directly to CEOs and board members while sending lobbyists to the National Mall to buy expensive lunches for our Representatives.

The article notes that the alternative is the European system of not providing tax-breaks for these organizations--which results in much fewer organizations. It's hard for me to accept that when I think of all the organizations I perceive as doing good in America, but maybe they aren't really doing good and are simply enjoying the good sentiments that come with the words "charity" and "non-profit?"

[1] http://www.starnewsonline.com/article/20070327/NEWS/70327037...

[2] http://bigthink.com/21st-century-spirituality/how-to-make-71...

[3] http://www.nytimes.com/1991/07/07/business/all-about-blood-b...

[daveguy]

1) Non-Profit just means that profits can't go directly to shareholders / founders / investors (except in the form of a salary, which is a giant loophole). Essentially the profits must be re-invested in the company. They can be just as profit-seeking as a for-profit company and do so legally. They can grow just as rapidly.

2) I am pretty sure it is illegal for a non-profit (at least 501c3) to lobby the government. If they are lobbying then they are not the traditional non-profit. There is a different category of "non-profit" that allows lobbying, but the rules are different. I don't think donations are tax deductable to a lobbying-type non-profit and I think they have to pay some taxes.

Of course I am not a lawyer or accountant and it has been a few years since I was involved with a non-profit. If someone more knowledgeable about this can fix my misconceptions I would be grateful.

[lmm]

> The article notes that the alternative is the European system of not providing tax-breaks for these organizations--which results in much fewer organizations. It's hard for me to accept that when I think of all the organizations I perceive as doing good in America, but maybe they aren't really doing good and are simply enjoying the good sentiments that come with the words "charity" and "non-profit?"

You've got to ask how much of those sectors' income is going to organizations that are doing good, and how much is not. And remember that taxes are used for the public good, so the bar to be tax exempt should not be merely "is this organization doing good?" but rather "is this organization doing more good per dollar than is done with general taxation?"

[barney54]

Is the government "doing good?" There is some good, but there is a case that non-profits such as the Red Cross, churches, food banks, are more accountable and do more good.

To me non-profits do far more good per dollar than the government does through general taxation. The biggest reason why is that non-profits have a much more defined scope and mission.

[jellicle]

> There is some good, but there is a case that non-profits such as the Red Cross, churches, food banks, are more accountable and do more good.

There isn't any such case, if approached realistically. Government agencies spend trillions of dollars each year on helping the poor, the old, and the disabled in various ways. They do so in ways that are fantastically accountable (compared to the private sector), including but not limited to the fact that basically any document about anything written by anyone working at these agencies can be requested by a member of the public and the government must give them a copy. The executives working at government agencies are paid frugally, their books are audited regularly, and they are subject to dismissal for even minor transgressions.

Total charitable giving in the U.S. is an order of magnitude lower (even assuming that every cent was spent on something good, which is far from the truth), their accountability consists of (at most) a mandatory report every year and nothing else (often not even that), and their executives are now hitting 7-figure salaries.

It's not even close.

[lmm]

> Is the government "doing good?" There is some good, but there is a case that non-profits such as the Red Cross, churches, food banks, are more accountable and do more good.

I'd say they're less accountable. There's no democratic oversight, FOIA doesn't apply to them, journalists have less incentive to go digging for dirt. They have to keep the donations coming, but that's as much a question of PR as of how much good they're actually doing.

I've no doubt there are effective NGOs and wasteful parts of government, but I suspect a large proportion of NGOs (not those on your list perhaps, but the money-weighted average) are less effective.

[countrybama24]

Well they are good at different activities. Charities are good at things that can be done on a small, decentralized scale, like giving away food. Regulating massive industries, correcting the issues in our healthcare system, setting up a program of cash transfers, on the other hand, are all things that often require the scale of the government.

[eli_gottlieb]

I find it very difficult to believe that the Red Cross does more good than Medicare and Medicaid, or that food banks do more good than Food Stamps.

[dignan]

You're comparing an organization with a budget of about $3 billion to one with a budget of over $1 TRILLION. It's a nonsensical comparison.

[jimbokun]

This all just boils down to the general question of how you feel about the relationship between taxation and personal freedom, and the trade off between them.

Do you value the ability to personally decide where your money can do the most good, or would you rather delegate that responsibility to a powerful centralized authority?

Of course, many people (including some commenting here, apparently), are willing to cede important decisions about how to spend money to the government, because they are more afraid of their fellow citizens making poor decisions about how to spend or give away their money.

(Personally, it also reminds me that, despite the idiocy of the current Republican party, I still identify as "conservative" or maybe libertarian. I have personal beliefs and reasons for how I chose to give away my money, which I know are not necessarily shared by the majority. So I'm a bit taken aback at how cavalierly some are willing to cede those priorities to a central government.)