Keith Goetzman of the Utne Reader writes:
As the recession rolls on, the people who run the nation’s social service nonprofits expect people’s needs for food, shelter, and other types of assistance to rise dramatically, just as donations from businesses and individuals are falling: In December, a survey of nonprofit professionals reported the gloomiest fund-raising outlook in a decade. At the same time, cash-strapped government agencies at the federal, state, and local levels are further cutting back on social spending and allocating less money to nonprofits that citizens have come to depend on for a wide variety of services. Making matters worse, a number of these same nonprofits—as well as an array of municipalities, school boards, and public works agencies—got caught off guard by poorly structured investment portfolios and scandals, like the Bernard Madoff affair, and have seen their risky Wall Street investments all but vanish.
To consider how we might remedy this state of affairs, it’s worth asking how we got here. In a way, it’s quite simple: We’ve outsourced compassion. Over the past few decades, the United States has deliberately and steadily shifted the burden of meeting social needs from the government onto a loosely organized, haphazardly regulated patchwork of nonprofits. Many groups have overlapping or competing missions, many are closely aligned with business interests through their funding or their boards, and many rely heavily on foundation funding, which ties them even more closely to Wall Street’s fortunes.
Is this really the best way to do things? Several critics have recently been asking this and other hard questions about what some have dubbed “the nonprofit industrial complex”—the $300 billion-a-year sector of the economy that encompasses everything from art museums to private colleges to local food shelves. Reform-minded critics come from both right and left, with proposed remedies that range from mildly corrective steps to a fundamental makeover of the system.
Read the article to see some of the alternatives being discussed.