Outsourcing government services to either non- or for- profits is a way of faking small government at a high price. That includes lots of corruption. Non-profits also maximize spending as opposed to efficient service delivery. The government is probably even worse at vendor management than service delivery. A good article (and also highlights the SFO TODCO issue):
Even shiny non-profits that most people probably like have issues. Two that immediately come to mind are university health systems. And Division I football and basketball.
Of today's GDP release, page 8, in Table 2 which shows which components added what to the 1.30% of the total figure, is line 24: "Gross output of nonprofit institutions".
It was a non productive +0.64% of that 1.30% for the quarter. That would include all the FEMA money Catholic Charities is getting to import all those helpful new immigrants everyone's been talking about.
Now, if I can just find a paper trail for all the apartments getting donated to the Houston Archdiocese, there might even be a way to wrap abusing the tax code into it....
Bingo. Exactly right. Non Profit doesn't mean non profit for the people who work there, especially at the top. They usually profit pretty damn well out of it.
Some time ago there was a brouhaha about the salary a non-profit (Red Cross?) was paying its president or CEO. It was in the six figures and she was already wealthy.
If it's really a nonprofit the people at the top should take $1.00@year.
Some years back I gave money to a certain non-profit that did work I supported. Turned out the Chairman of the board filled the board with relatives. All well paid. Very well paid. I think the IRS or someone stepped in but no matter I stopped giving to them and went somewhere else.
On another note you touched on, one thing I've wondered about is why there are so many help the veteran nonprofit organizations that basically do the same thing? Seems to me they are trying to do good work but wouldn't it be more efficient if there were fewer of them and more money actually went to what they were trying to do? The VA is probably a total screw up in terms of actually helping them but you get all of these late night TV commercials with this "famous guy" or that "famous guy" asking for money to essentially do the same thing. Can't help wondering what the overhead is and what the breakdown is.
Too few people who have the means act like John Profumo did after the scandal.
I have become very disillusioned with charity work. I used to give regularly and thought it was an important civic contribution. Then I see the corruption and the cynical uses of these funds, and I slowly started finding reasons to not give to almost all of them.
I don't like that feeling, that everything is just a cynical exercise in rent-seeking or profiteering under a different name. This isn't the America I grew up in, or is it? Are we just more aware? Did our parents go through this same enlightenment of cynicism?
At a broader level, we have seen a "gradually, and then suddenly" loss of trust in our institutions. Covid and the NGO/government response was a huge eye opener for me.
I also gather that this is one reason so many wealthy people are creating their own foundations, rather than just contributing to others. I know they use it as a vehicle to assess who is for real and who is not.
Part of the way to rebuild some trust is to get the government to competently do the work that people pay for. Check out the link I posted above. Government outsourcing has been mostly a failure in both service delivery and cost. Non-profit orgs filling the gap was often a way for both Ds and Rs to agree. The for-profit outsourcing has been just as bad. Look at the IRS leaker. He was a Booz Allen consultant. Booz Allen is better at sucking the government juice than any non-profit.
Government and competence. Do those words belong in the same sentence? My answer would be less govt, fewer if any govt grants for things other than military defense.
They often don't. But outsourcing is not the same thing as 'less govt'. When you say 'less govt' you are talking about scope. Which I'd agree with 100%. But once the scope is set, even if you don't agree with it, the answer is to be as efficient as possible. Strangling the government has not and will not reduce the scope.
It is possible for even some Chicago government to be competent. My lefty, progressive alderman is doing it. He's made tree trimming and pothole filling an efficient area activity instead of an inefficient by request one. He's also cutting the red tape for new housing development. https://x.com/40thforward/status/1795986088399368345
And there are examples of broader competence in government. Carmel, IN comes up as an example.
Finally, there are no larger taxpayer rip-offs than in military outsourcing.
And Chicago alderman do NOT act altruistically. That "red tape" elimination has a guiding hand behind it. That's why the Cook County (IL, idunno about MN) "Scales of Justice" come with a thumbrest on one side.
I read the article. ‘Outsources the most’ is exactly my point. Successful outsourcing requires competent vendor management. The outsourcees, whether NGO or for profit know how to rip off the government. The people managing vendors aren’t exactly Apple quality professionals. And Apple figured out it shouldn’t outsource core functions like chip design. I understand all the roadblocks, but we’d all be better off with higher competence and higher paid government leaders. Those salaries are getting paid, just to people like those at Booz Allen.
"The non-profits that scale take on 'current thing' type problems that never seem to go away."
The nonprofit problem extends to those dealing with ideas.
I worked for 3 right-leaning nonprofits. At one a senior staffer told me, "If you think that if the [redacted problem] goes away, that [famous conservative] will just pack his tent and go home, you've got another thing coming. There's way too much money in [redacted cause]."
At another, literally 3 deep-pocket donors kept the entire Potemkin Village going until they found a charismatic person skilled at massaging donors to acquire more funds. This person essentially tells false stories of success based on vanity metrics. Everyone talks about how successful they are. It's essentially a 'golden ghetto,' a fantasy-based enterprise designed to make certain wealthy people feel they're changing the world.
Some nonprofits do good - like Kiva.org. But be very skeptical about supporting nonprofits seeking political change. They essentially exist to keep staffers in the style to which they've become accustomed.
Stick to the Catholic concept of Subsidiarity. All charity should happen at the lowest possible level. .. family first, church, local community and so on. Big is bad and ends up corrupted. Do good, but at the ground level where it's most effective.
Yes. The biggest nonprofits are mostly tax free money laundering propaganda outfits for lefty policies and parties. There’s a lot of money to be made sucking the lifeblood from the American Middle Class, while claiming to help. Pissing down our backs and telling us it’s raining.
These criminals give my own local MN 501(c)3 volunteer firefighter relief association a bad name. The non-direct-benefit-to-the-organization rules are followed scrupulously.
One of the basic tenets of social technocracy, is to put "non-profit" status on a pedestal of worship and trust, while treating those honest enough to state their intent to profit with perpetual suspicion and the application of restraints in a manner reminiscent of Gulliver.
And it is often "justified" by simplistic takes on Scripture ... "The love of money is the root of all evil" is often morphed into "seeking profit is evil" in the minds of some, as they ignore Proverbs 31 and the Parable of the Talents. People nod approvingly that we should "bear one another's burdens", in Galatians 6:2, then ignore the next three verses, that end with "but each one shall bear their own load" - the difference being between the unforeseen/unavoidable "burden" and the foreseeable "load" that is within the capability of the individual to deal with.
And Christ's reminder of "For unto whomsoever much is given, of him shall be much required", is often used by those who think they have the discernment to accurately perceive what has been given (and not by them), and the Divine authority to set the requirements.
As am I - my comment is regarding the attitude of misplaced trust in entities perceived as “non-profit”, including government, labor unions, and academia.
That attitude leads our society astray, repeatedly.
I covered this in my pioneering book on this exact subject from 2013. Heavily satirical, and very serious, pseudonymous novel. 'Sustenance Through Starvation.' Findable on Amazon. Shows how far this stuff can go. Key player is wealthy, owns nothing at all. The book spends a lot of time in Africa, and a lot of time with lifestyles. Presages 'virtual signaling' with recurring theme of IDIC - (I'm Different, I Care).
Recalling the curious business practice of the Archdiocese of Chicago of getting rebates on contracting jobs. So they want to fix the gutters on St. Spivens Parish Church, and the bid is $100K. They calculate in expected rebate, a 'donation' from the contractor, that gives him a tax shield on his work.
Hard to crack that kind of trading. The Archbishop would have to put his foot down, as this has been going on for well over 100 years.
I worked for a start up out of SV for four years that was a Cabbage/SOFI but for NPO's. We only lent to NPO's. I was their CCO, designed a PD and LGD model for them and collectively we took the steps to actually function somewhat like a lending institution by taken liens on collateral. But, we were completely beholden to people willing to put their money in and invest in traditional style commercial loans to these NPO's. The most amazing part of it for me was the complete and utter lack of how to run what they were tasked to run. Everything from financial malfeasance to outright theft and above all, a whole lot of heart and almost zero head. I did have the opportunity on several occasions to truly counsel some of them, and the ones who listened eventually in my four years working for this start up came back and went from not qualifying for a loan to qualifying because listened and did what I suggested. I was very happy to be able to be the rubber meeting the road there. On the whole, larger NPO's are nothing more at this juncture then extensions of the Democratic party and simply allow for another avenue for our tax dollars to be funneled through and come out clean on the other side paying people who do nothing to be sure and better yet to end up in the coffers of big D politicians come election time. Even Marx has to be down in H-E-double hockey sticks going, ''damn you all are good."
Did a lot of business with non-profits, particularly those that assisted special needs populations, when I owned my nurse staffing agency. Most of them were kind people who meant well and had no clue about business. The nonprofits of the world have two things in common:
1) They rarely, if ever, recognize the difference between theory and reality. If it sounds like a good idea and is well intentioned, then it must be a good idea, whether it works or not. 🤔🙄😄
2) "It works wonderfully for groups of 5 to 10 people, so let's see if we can spread this as wide as we can and convince our donors and the government to give us an absurd amount of money to make it work for thousands!" Nope, damn near never works that way, for a multitude of reasons.
Additionally, it is never the most efficient, effective or productive employee that is recognized; it is the brown noser who thinks it's more important to be liked than respected who gets the promotions and pay raises, yet that is the one person I would try to avoid speaking to because they would be all about rhetoric and not about results. That is an absolute recipe for failure and repeatedly, nonprofits fail to see that and blame everyone and everything else except themselves.
Interestingly enough, one of the best run nonprofits was St. Coletta's of Tinley Park. Not coincidentally, they were founded by Joseph P Kennedy. It was always the cleanest facility I visited anywhere in Northern Illinois. The Kennedy School on the campus there somehow found a way to perfectly balance patience and tolerance with gentle, but firm, requirements to adhere to the rules and policies and procedures and make progress, which for some students could be learning how to tie their shoes or brush their teeth over the course of an entire semester, and for other students it would be to become gainfully employed. They not only survived, they thrived. It was an absolute joy to visit there after seeing so many other places that were absolute hell holes in Illinois and those hell holes were experts at throwing money down the drain and achieving little other than providing a roof over the heads of their "clients", as they referred to the people who lived there.
For-profits serve customers, non-profits serve donors.
Outsourcing government services to either non- or for- profits is a way of faking small government at a high price. That includes lots of corruption. Non-profits also maximize spending as opposed to efficient service delivery. The government is probably even worse at vendor management than service delivery. A good article (and also highlights the SFO TODCO issue):
https://www.noahpinion.blog/p/nonprofits-are-sapping-the-progressive
Even shiny non-profits that most people probably like have issues. Two that immediately come to mind are university health systems. And Division I football and basketball.
Of today's GDP release, page 8, in Table 2 which shows which components added what to the 1.30% of the total figure, is line 24: "Gross output of nonprofit institutions".
It was a non productive +0.64% of that 1.30% for the quarter. That would include all the FEMA money Catholic Charities is getting to import all those helpful new immigrants everyone's been talking about.
Data's from here, again, on Page 8:: https://www.bea.gov/sites/default/files/2024-05/gdp1q24-2nd.pdf
Now, if I can just find a paper trail for all the apartments getting donated to the Houston Archdiocese, there might even be a way to wrap abusing the tax code into it....
Bingo. Exactly right. Non Profit doesn't mean non profit for the people who work there, especially at the top. They usually profit pretty damn well out of it.
Some time ago there was a brouhaha about the salary a non-profit (Red Cross?) was paying its president or CEO. It was in the six figures and she was already wealthy.
If it's really a nonprofit the people at the top should take $1.00@year.
Some years back I gave money to a certain non-profit that did work I supported. Turned out the Chairman of the board filled the board with relatives. All well paid. Very well paid. I think the IRS or someone stepped in but no matter I stopped giving to them and went somewhere else.
On another note you touched on, one thing I've wondered about is why there are so many help the veteran nonprofit organizations that basically do the same thing? Seems to me they are trying to do good work but wouldn't it be more efficient if there were fewer of them and more money actually went to what they were trying to do? The VA is probably a total screw up in terms of actually helping them but you get all of these late night TV commercials with this "famous guy" or that "famous guy" asking for money to essentially do the same thing. Can't help wondering what the overhead is and what the breakdown is.
Too few people who have the means act like John Profumo did after the scandal.
Can't recall the date in the 90s, exactly, but the United Way CEO had a fireplace installed in his office....
On something like the 54th floor in their HQ of a mid-town Manhattan office building
Makes sense to me. It gets colder at higher elevations.
I would also say that liberal white women and their beta male allies are destroying the country. Not accidentally. Deliberately.
https://www.thegatewaypundit.com/2024/05/liberal-boston-mayor-supports-ending-prosecution-criminals-theft/
I have become very disillusioned with charity work. I used to give regularly and thought it was an important civic contribution. Then I see the corruption and the cynical uses of these funds, and I slowly started finding reasons to not give to almost all of them.
I don't like that feeling, that everything is just a cynical exercise in rent-seeking or profiteering under a different name. This isn't the America I grew up in, or is it? Are we just more aware? Did our parents go through this same enlightenment of cynicism?
At a broader level, we have seen a "gradually, and then suddenly" loss of trust in our institutions. Covid and the NGO/government response was a huge eye opener for me.
I also gather that this is one reason so many wealthy people are creating their own foundations, rather than just contributing to others. I know they use it as a vehicle to assess who is for real and who is not.
How do we rebuild trust in our society?
Part of the way to rebuild some trust is to get the government to competently do the work that people pay for. Check out the link I posted above. Government outsourcing has been mostly a failure in both service delivery and cost. Non-profit orgs filling the gap was often a way for both Ds and Rs to agree. The for-profit outsourcing has been just as bad. Look at the IRS leaker. He was a Booz Allen consultant. Booz Allen is better at sucking the government juice than any non-profit.
Government and competence. Do those words belong in the same sentence? My answer would be less govt, fewer if any govt grants for things other than military defense.
They often don't. But outsourcing is not the same thing as 'less govt'. When you say 'less govt' you are talking about scope. Which I'd agree with 100%. But once the scope is set, even if you don't agree with it, the answer is to be as efficient as possible. Strangling the government has not and will not reduce the scope.
It is possible for even some Chicago government to be competent. My lefty, progressive alderman is doing it. He's made tree trimming and pothole filling an efficient area activity instead of an inefficient by request one. He's also cutting the red tape for new housing development. https://x.com/40thforward/status/1795986088399368345
And there are examples of broader competence in government. Carmel, IN comes up as an example.
Finally, there are no larger taxpayer rip-offs than in military outsourcing.
Read the article. SF outsources the most. So does Portland. Govt is not competent. Putting your faith in it is intellectually lazy
And Chicago alderman do NOT act altruistically. That "red tape" elimination has a guiding hand behind it. That's why the Cook County (IL, idunno about MN) "Scales of Justice" come with a thumbrest on one side.
Biggest disappointment in alderman was Bill Conway.
Certainly some crooks and/or incompetents. They’re not all that way.
I read the article. ‘Outsources the most’ is exactly my point. Successful outsourcing requires competent vendor management. The outsourcees, whether NGO or for profit know how to rip off the government. The people managing vendors aren’t exactly Apple quality professionals. And Apple figured out it shouldn’t outsource core functions like chip design. I understand all the roadblocks, but we’d all be better off with higher competence and higher paid government leaders. Those salaries are getting paid, just to people like those at Booz Allen.
Or do nothing. It's not govt job to make sure there aren't food deserts etc.
"The non-profits that scale take on 'current thing' type problems that never seem to go away."
The nonprofit problem extends to those dealing with ideas.
I worked for 3 right-leaning nonprofits. At one a senior staffer told me, "If you think that if the [redacted problem] goes away, that [famous conservative] will just pack his tent and go home, you've got another thing coming. There's way too much money in [redacted cause]."
At another, literally 3 deep-pocket donors kept the entire Potemkin Village going until they found a charismatic person skilled at massaging donors to acquire more funds. This person essentially tells false stories of success based on vanity metrics. Everyone talks about how successful they are. It's essentially a 'golden ghetto,' a fantasy-based enterprise designed to make certain wealthy people feel they're changing the world.
Some nonprofits do good - like Kiva.org. But be very skeptical about supporting nonprofits seeking political change. They essentially exist to keep staffers in the style to which they've become accustomed.
I don't disagree. I might disagree about Kiva. I did that once.
Stick to the Catholic concept of Subsidiarity. All charity should happen at the lowest possible level. .. family first, church, local community and so on. Big is bad and ends up corrupted. Do good, but at the ground level where it's most effective.
As an academic exercise, I wanted to try a thought experiment: what would happen if we entirely eliminated tax deductions for NGO's and charities?
If you treat an NGO like a business, wouldn't they essentially operate at breakeven each year anyway?
And, yes, giving would go down. But if it is truly charity, should the tax treatment matter?
How do we fix this?
Are you for it or against it? It kind of gets into that area of drastic policy change, like the Fair Tax.
Other than ripping off the band aid and confining tax free to churches I don't know
IRS enforcing the non-political part of the US Code would be a nice start.
Right and totally getting rid of 401(c)(4).
[Disregard, deleted]
Yes. The biggest nonprofits are mostly tax free money laundering propaganda outfits for lefty policies and parties. There’s a lot of money to be made sucking the lifeblood from the American Middle Class, while claiming to help. Pissing down our backs and telling us it’s raining.
These criminals give my own local MN 501(c)3 volunteer firefighter relief association a bad name. The non-direct-benefit-to-the-organization rules are followed scrupulously.
One of the basic tenets of social technocracy, is to put "non-profit" status on a pedestal of worship and trust, while treating those honest enough to state their intent to profit with perpetual suspicion and the application of restraints in a manner reminiscent of Gulliver.
And it is often "justified" by simplistic takes on Scripture ... "The love of money is the root of all evil" is often morphed into "seeking profit is evil" in the minds of some, as they ignore Proverbs 31 and the Parable of the Talents. People nod approvingly that we should "bear one another's burdens", in Galatians 6:2, then ignore the next three verses, that end with "but each one shall bear their own load" - the difference being between the unforeseen/unavoidable "burden" and the foreseeable "load" that is within the capability of the individual to deal with.
And Christ's reminder of "For unto whomsoever much is given, of him shall be much required", is often used by those who think they have the discernment to accurately perceive what has been given (and not by them), and the Divine authority to set the requirements.
I'd be against taxing legitimate churches.
As am I - my comment is regarding the attitude of misplaced trust in entities perceived as “non-profit”, including government, labor unions, and academia.
That attitude leads our society astray, repeatedly.
I covered this in my pioneering book on this exact subject from 2013. Heavily satirical, and very serious, pseudonymous novel. 'Sustenance Through Starvation.' Findable on Amazon. Shows how far this stuff can go. Key player is wealthy, owns nothing at all. The book spends a lot of time in Africa, and a lot of time with lifestyles. Presages 'virtual signaling' with recurring theme of IDIC - (I'm Different, I Care).
Recalling the curious business practice of the Archdiocese of Chicago of getting rebates on contracting jobs. So they want to fix the gutters on St. Spivens Parish Church, and the bid is $100K. They calculate in expected rebate, a 'donation' from the contractor, that gives him a tax shield on his work.
Hard to crack that kind of trading. The Archbishop would have to put his foot down, as this has been going on for well over 100 years.
All the 'green energy' tax rebates have this exact issue too.
Green energy rebates are poor people subsidizing rich people
I worked for a start up out of SV for four years that was a Cabbage/SOFI but for NPO's. We only lent to NPO's. I was their CCO, designed a PD and LGD model for them and collectively we took the steps to actually function somewhat like a lending institution by taken liens on collateral. But, we were completely beholden to people willing to put their money in and invest in traditional style commercial loans to these NPO's. The most amazing part of it for me was the complete and utter lack of how to run what they were tasked to run. Everything from financial malfeasance to outright theft and above all, a whole lot of heart and almost zero head. I did have the opportunity on several occasions to truly counsel some of them, and the ones who listened eventually in my four years working for this start up came back and went from not qualifying for a loan to qualifying because listened and did what I suggested. I was very happy to be able to be the rubber meeting the road there. On the whole, larger NPO's are nothing more at this juncture then extensions of the Democratic party and simply allow for another avenue for our tax dollars to be funneled through and come out clean on the other side paying people who do nothing to be sure and better yet to end up in the coffers of big D politicians come election time. Even Marx has to be down in H-E-double hockey sticks going, ''damn you all are good."
Did a lot of business with non-profits, particularly those that assisted special needs populations, when I owned my nurse staffing agency. Most of them were kind people who meant well and had no clue about business. The nonprofits of the world have two things in common:
1) They rarely, if ever, recognize the difference between theory and reality. If it sounds like a good idea and is well intentioned, then it must be a good idea, whether it works or not. 🤔🙄😄
2) "It works wonderfully for groups of 5 to 10 people, so let's see if we can spread this as wide as we can and convince our donors and the government to give us an absurd amount of money to make it work for thousands!" Nope, damn near never works that way, for a multitude of reasons.
Additionally, it is never the most efficient, effective or productive employee that is recognized; it is the brown noser who thinks it's more important to be liked than respected who gets the promotions and pay raises, yet that is the one person I would try to avoid speaking to because they would be all about rhetoric and not about results. That is an absolute recipe for failure and repeatedly, nonprofits fail to see that and blame everyone and everything else except themselves.
Interestingly enough, one of the best run nonprofits was St. Coletta's of Tinley Park. Not coincidentally, they were founded by Joseph P Kennedy. It was always the cleanest facility I visited anywhere in Northern Illinois. The Kennedy School on the campus there somehow found a way to perfectly balance patience and tolerance with gentle, but firm, requirements to adhere to the rules and policies and procedures and make progress, which for some students could be learning how to tie their shoes or brush their teeth over the course of an entire semester, and for other students it would be to become gainfully employed. They not only survived, they thrived. It was an absolute joy to visit there after seeing so many other places that were absolute hell holes in Illinois and those hell holes were experts at throwing money down the drain and achieving little other than providing a roof over the heads of their "clients", as they referred to the people who lived there.
Great piece, Jeffrey. When the NFL can be classified as a 501(c)3 there are a multitude of problems.
HA, no doubt.