The Scandal of the Public Non-Profit
23rd December 2024
In order to qualify for tax-deductible donations, non-profits must persuade the Internal Revenue Service that they are a charitable organization. Such organizations, says the IRS, are “organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes.”
But there are two kinds of non-profits. First are private non-profits that get most of their funding from private donors. These are charitable organizations because the donors expect no compensation, dividends, or other rewards other than a tax deduction and the good feelings they get from helping to promote causes they consider to be worthwhile.
Second are public non-profits that get most or all of their funding from government grants. These are anything but charitable because few if anyone put up their own money to fund these non-profits, the staff members are often paid far more than the average American white collar worker, and while the work they do may seem altruistic it is often at a much greater cost than the same work could be done by private industry.
Public non-profits are so different from private non-profits that they hardly deserve to use the same name. But certain groups have a habit of taking the name of a good idea and applying it to a bad idea to give that idea extra credibility.