On: The trouble with non-profits

[rapind]

For-profit companies selling you goods and services often spend enormous amounts on marketing, advertising, and branding in order to convince you to part with your hard earned money. This doesn't mean their product is any better than their competitors though. It just means they've spun you into believing it is.

While I think it's a good idea to research your charity or donation to a non-profit, I definitely do not think they should operate like a for-profit business.

I think this is a great article, and there are some really pointed areas of improvement for non-profits. However, let's not turn to the free market gods for a solution please.

[billswift → rapind]

Marketing, advertising, and branding is a MUCH larger part of what non-profits sell than it is of what commercial operations with an actual product sell.

[cwan → rapind]

I think it really depends on the specific area/charitable cause - but where it comes to economic development, markets are a far better solution than charities and aid which have often done far more harm than good (e.g. food aid). In general, the potential for inefficiency and even fraud is arguably even higher given the lack of transparency and often weak governance).

Anyone who donates money to a charity should at least spend as much time researching what they're "selling" as they would a comparable product/service. The tax returns are available but some of these firms spend as much as 80% of their funds raised in administration and overhead - which is often far worse than most for profits. Yes, not for profits also "often spend enormous amounts on marketing, advertising, and branding in order to convince you to part with your hard earned money".

Fortunately at least anyone can look up any charity's IRS Form 990 that lists such things as salaries (which are sometimes as much if not higher than private market salaries). I usually start here: http://www.guidestar.org/ (using bugmenot for login/password)