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Nonprofit doesn't mean anything, since people can just route the profits into salaries. It's just another legacy regulation that may have once once had a societally-constructive purpose that wealthy people just use as one of the array of financial tools to help implement their latest scams. IMO, here are no legitimate nonprofits.

Western countries have been utterly strangled by nonprofits. Governments fund them with tax money in order to lobby themselves for legislation that financially benefits individuals in government and their donors. Obama even expanded the rules in the US to allow the government to unconstitutionally fund religious groups to accomplish functions that belong in government.

They should all be either reformed so that their internal bylaws and compensation are strictly regulated or probably preferably, they should simply be destroyed. If you only pay taxes on your profits (and we get rid of legal vehicles to hide profits) and your employees are obligated to pay taxes on their incomes, there's no need for a nonprofit status. If nonprofits want to engage in business (religions included), let them pay taxes. If they engage in charity, they won't have anything to tax.

2 comments

> Western countries have been utterly strangled by nonprofits

To expand, there are two major problems with nonprofits in Western nations these days:

1. Governments use them as a way to do things that they themselves are not allowed to do ("it's private charities that do this!", ignoring the fact that the charities get >90% of their revenue from government grants)

2. Like you mentioned, the government grants to nonprofit back to politicians' campaign funds pipeline. Utterly egregious.

> Obama even expanded the rules in the US to allow the government to unconstitutionally fund religious groups to accomplish functions that belong in government

I wasn't aware of this being a big concern; more the other way around, like in my point 1.

One reform I would make would be to limit tax breaks to actual charitable activity within an organization, instead of a blanket tax break to the whole organization. For example if a Church/Hospital runs a soup kitchen and homeless shelter, those resources should be tax free, but maybe the rest of their activities shouldn't be by default.

Another reform I would make would be around independent governance and removing donor control of charities to reduce the number of sham Rich Guy foundations.

> Another reform I would make would be around independent governance and removing donor control of charities to reduce the number of sham Rich Guy foundations.

This one is tough. I mean, look at the Clinton Foundation. One reason to believe that $1 there is more effective than somewhere else is _because_ the Clinton’s are closely involved.

Of course, you get massive donations there because people want to influence the Clintons and/or _through_ the Clintons. Would those people / states donate otherwise? Would they donate to _better_ organizations? Maybe! Maybe not!

* Also I’m not saying the Clinton Foundation is more/less effective. You’re almost certainly better donating to GiveDirectly, but it’s not on its face ridiculous to think that they, specifically, could effect a _different_ type of change than others would have access to/influence over.