Wednesday, December 11, 2013

Should we eliminate the idea of the nonprofit sector?

In a Forbes article from earlier this week, the author calls into question the charitable purpose and tax-exempt status of prestigious schools like Harvard and Stanford. The author argues that the treatment of nonprofit organizations such as Harvard and Stanford is “problematic both practically—it costs the government billions of dollars in tax revenue every year—and philosophically, as it creates a paradigm that misunderstands the way many ‘nonprofit’ organizations operate and the role that for-profit corporations ought to play in society.” The author goes on to claim that the best solution is to “eliminate the very idea of the nonprofit sector.”

Essentially, the author claims it is incredibly easy for organizations to obtain tax-exempt status and that determining whether an organization is trying to make and distribute a profit as the basis for distinguishing between the private and voluntary sector is ineffective because nonprofits are also making and distributing profits.

What, if anything, would be the consequences of eliminating the idea of the nonprofit sector?  


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