Opinion: The Nonprofit Sector Should Go

The modern notion of a nonprofit sector has distinctly negative consequences and thus should be eliminated, writes Forbes contributor Josh Freedman.

Mr. Freedman advocates doing away with the line separating for-profit and nonprofit groups. Charities should exist, he says, and some nongovernment activities should be subsidized. But having a nonprofit sector “actually hurts society by costing public programs oodles of money while implying (incorrectly) that our for-profit corporations can and should be outside of the public interest.”

“It is impossible to have a coherent ‘nonprofit’ sector when there is no distinction between what actions are charitable and what actions are not,” as is often the case with hospitals, he writes.

And nonprofit status costs the government dearly. He points to Harvard, which has billions of dollars in its endowment and billions more in property, none of which is taxed regardless of how it is used.

Charities do have a profit motive, he argues. “The primary goal of nonprofits is often to make more money, which serves to boost their status and thus bring in more money in a perpetual cycle.”