Arnold Kling  

Another Reason to Distrust Non-profits

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Reihan Salam quotes John DiIulio, Jr.,


About three-quarters of non-profit organizations, including most faith-based ones, spend under a half a million dollars a year and receive little or no government grant or contract money. But the quarter of the sector's organizations that boast its biggest annual budgets are highly dependent on direct government funding, meaning that one-third of all non-profit dollars are from government, paid through grants or contracts. For instance, in 2009, Catholic Charities USA alone spent $4.2 billion -- and about two-thirds of that money came from government grants and contracts.

[UPDATE: Tim Worstall forwards the link fakecharities.org a UK web site, which he hints is an idea that might also be of use in the former colonies.]


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CATEGORIES: Political Economy



COMMENTS (6 to date)
Robert Evans writes:

There is a mixture here of statistics. While 35% of all charitable dollars go for religion in the U.S., other sectors in the nonprofit arena account for most of the dollars spent on services, facilities, and programs. Whether or not the NPO's receive government funding, they are increasingly needing to be more transparent in reporting their finances and procedures. Increasingly, donors are placing demands on the nonprofits they support -- including houses of worship -- because of some improper actions. But let's remember, too, that our governments and elected officials have not always behaved honestly and in a forthright manner. Operating with high ethical standards and proper demeanor are increasingly what we talk about and people associated with all types of organizations -- government, nonprofit, or for-profit -- need to be honest. And with this being said, giving is going up again and donors are increasingly engaged!

jseliger writes:

Nonprofits that want to scale seek government funding because that's where the real money is. My family's consulting business provides grant writing services for nonprofit and public agencies, and we get hired by organizations who have have figured this out.

If you want to know more about some of the bizarre practices that result, see the link with my name, or start with this post: Why Fund Organizations Through Grant Applications At All?

IIRC, a while ago Bryan Caplan wrote that more right-wingers should read left-wing ethnographic research. They should also consider learning more about the world of federal grant funding.

Becky Hargrove writes:

"This is why I consider regulation a more pressing issue than taxes."

I couldn't agree more. Taxation is but a drop in the bucket compared to the scope (economic parameters) that regulation defines.

daniel writes:

Donors also tend to spread their giving around to many different charities instead of one or two. So a charity of $20 million with annual giving of $800,000 might spread that around to 20 different charities. This multiplies the number of grants, of grant officers, of grant applications, etc. That grant money could be given to one worthy charity and all the middle men squeezed out, but that makes too much sense.

blsdaniel writes:

By this argument, conservatives / moderate libertarians would wind up getting vouchers started in education...only to turn around and immediately cease to trust them.

Westie writes:

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