Opinion: Is Nonprofit Economic Growth Cause for Concern?

In a Bloomberg column, former White House budget chief Peter Orszag looks at the recession-bucking income and job gains in the nonprofit sector and whether the services it provides are worth the forgone tax revenue.

Mr. Orszag, now a Citigroup executive, writes that more than three-quarters of nonprofit revenue is concentrated in health care (60 percent) and education (16 percent), a key reason the sector expanded rather than contracted during the downturn.

“The ultimate question is whether we should welcome or be concerned about the growth of nonprofits. The answer is linked to whether we want to spend more on health care and education,” and whether nonprofits can provide better value for that money than commercial entities, Mr. Orszag writes.

The growth of nonprofit health and education organizations should also foster debate over the advantage such groups enjoy because of their tax exemptions, he says.