from Hacker News

The Nonprofit Industrial Complex and the Corruption of the American City

by lalaland1125 on 5/28/24, 3:38 AM with 231 comments

by tptacek on 5/28/24, 7:24 AM
I sort of believe the thesis behind this piece, but it's written so viciously that I have trouble taking it seriously. For instance, however ineffective the "Freedom Project" in Seattle is, its finance director, who "once shot up a man’s house as an intimidation tactic to prevent him from snitching on Howell’s drug dealing", did so 20 years ago, served his sentence, went to college, then grad school at Penn State, and started a career. It seems extraordinarily unlikely that the crimes he committed when he was 21 have much of an impact on "Freedom Project" now.
The author knows that, but includes the innuendo anyways, which makes me think he can't make a better case than that. Ick.
by darth_avocado on 5/28/24, 5:47 AM
This can all be solved if non profits are forced to transparently show where the money is spent. And before anyone says, they already do, they don’t. With the current rules you’re only required to show the numbers on how much money was “spent” on the cause, but not how. Meaning, for example you could claim 60% of the $100k budget went to providing services to the homeless, but in reality all that money was paid as salary to a person who gave the homeless haircuts, and the value of services received by the homeless could just be worth $2000. Such obfuscation allows charities to waste a lot of money on self enrichment.
by smogcutter on 5/28/24, 4:46 AM
Meanwhile in Orange County, County supervisor Andrew Do has apparently stolen millions in Covid relief funds via the “Viet America Society”, a do-nothing nonprofit nominally run by his daughter.
https://laist.com/news/politics/orange-county-andrew-do-supe...
by tensor on 5/28/24, 5:29 AM
In case anyone is curious. This outfit has a right center bias, but is generally credible.
https://mediabiasfactcheck.com/american-affairs-journal/
by smeej on 5/28/24, 12:51 PM
I had to make a personal rule awhile ago about not supporting nonprofits that are trying to solve an issue that could actually be made worse. The incentives are too misaligned. You can't count on people to do "the right thing" on a large scale at the expense of doing "the right thing" at the scale of caring for their own/their family's livelihood.
One of the few organizations that made the cut for me is Hearts of Joy International. They help arrange lifesaving heart surgery for small children who have Down Syndrome, usually paying for the patient and one parent to travel from Uganda or the Philippines to India for the surgery.
There really isn't a way to use policy to cause more children to be born with heart defects and Down Syndrome. Nobody's at fault when that happens, and the young child who needs the surgery is as innocent as it gets.
Tangentially, I made another personal rule against supporting nonprofits that do their fundraising by focusing on how "evil" their opponents are and how dangerous things would be if the other side "wins." That's meant not supporting certain organizations even when I agree with them that what their opponents are doing is evil.
I just don't trust that any organization can overcome evil by focusing on the evil. Too many things can be justified in a "battle against evil." If you want to win, you have to be focused on the good you can do, not the evil you prevent.
by roenxi on 5/28/24, 4:57 AM
The more subtle problem here is actually the idea of governments giving public money to nonprofits at all. The government doesn't need to be involved in this; the non-profit is already providing the organisational oomph to work out what needs to be done where and pooling contributor's funds. But the government's contribution here is organisation and pooling funding, so there is massive redundancy in mission.
The only thing the government is providing is compulsorily forcing people to pay into the pool. So the fact that money is being spent on things that people wouldn't willingly commit to is actually the only feature of this system. IE, it is less unexpected than the author may believe.
by _nalply on 5/28/24, 5:39 AM
So some entities call themselves "nonprofit" but are shady enterprises. By calling themselves "nonprofit" they get some relaxation like tax breaks. They enjoy public trust. After all they are in business for higher purposes. Are they?
In Switzerland there's the "Stiftungsaufsicht". That's a supervision office for trusts.
Does the USA and its states know such institutes?
The IRS should be really interested in not granting tax breaks to profit-oriented organizations masquerading as nonprofits.
by unix_fan on 5/28/24, 5:30 AM
This is extremely common in Third World countries, where I come from. In my view, both nonprofits and large religious organizations attract the same kind of people. People who want to create their own little thiefdom, by taking advantage of peoples faith and Good will.
by wnc3141 on 5/28/24, 5:04 AM
I think the general rule of thumb is, wherever money moves to, people will absorb it - in the same way bacteria or fungi absorbs biological material. This is not often greed but the result of a chaotic system of (mostly) rational actors trying to eek out a living.
This can not only be seen by the masters degrees available - (higher ed. Administration , healthcare administration , etc.) but also ironically by those higher education institutions themselves. As student financing dollars go toward schools, people are there to absorb those dollars through employment in higher education and it's ecosystem. One could argue the merits of having decades of student future salaries garnished to subsidize employment at these institutions, but try explaining that to someone with a career in higher education. This is just one example of the push and pull of providing employment compared to the mandate of efficient production.
Of course the stakeholders funding institutions must decide the merits of employment programs (in the form of non profits) vs. the merits of the production of the institution. The answer, being complex may only be born though strong citizen engagement in civic processes where one advocates for and directs the mandate of that institution.
by pyuser583 on 5/28/24, 4:39 AM
This article feels more like a piece of heavy journalism than a political op-ed.
The facts it shares are fascinating and damning.
I never thought I’d care so much about “Chilean Sea Bass.”
by mrcartmeneses on 5/28/24, 10:18 AM
The key problem here is that by privatising government services in the form of a non-profit there ceases to be proper democratic oversight of the organisations involved.
The possible solutions are therefore very obvious, either bring these services back into direct local government control or in the case of a tenants association require it to be tenant-owned and democratically governed.
by ch33zer on 5/28/24, 6:03 AM
This article decries basically all nonprofits. This is throwing the baby out with the bathwater. There are very effective and important nonprofits out there, just like there are scammy ones. The solution is to set constraints on which non profits the city is allowed to contract with. Limit executive pay to no more than 5% of income, limit overhead to no more than 15%, set contract benchmarks for performance by objective metrics and you can weed out the bad actors. My fear is that, as the article (IMO correctly) points out politicians and the bad actors are making too much money for this system to be implemented.
by yegle on 5/28/24, 5:34 AM
I recently learned the concept of B Corp (a type of for-profit corporation ) that is closer to what most people think a nonprofit is: https://en.wikipedia.org/wiki/B_Corporation_%28certification...
by EarthAmbassador on 5/28/24, 5:42 AM
600,000 homeless times $10,000 per tiny home, clustered where social services are made available, voila, the problem is solved for $6 billion, which is nothing, excluding the cost of those social services.
The issue is really there is a lack of genuine desire to solve the problem because the cruelty and baked-in lies within American self-reliance philosophy put such a solution outside the Overton window of what is possible.
Instead of a one-time investment, we dump more than $6 billion into the problem but never solve it.
by joemazerino on 5/28/24, 4:44 AM
Glad this is being written about. Too often non-profits get a pass on perceived altruism.
BLM in particular has been egregious. Not a single positive thing or a dollar has been spent to actually improve black neighborhoods but the leaders have enriched themselves.
https://www.independent.co.uk/news/world/americas/black-live...
https://nymag.com/intelligencer/2022/04/black-lives-matter-6...
Marilyn Mosby, Baltimore’s former top prosecutor and a BLM activist, was convicted of perjury and fraudulently claiming Covid hardship to get tens of thousands of dollars for her vacation homes. https://thepostmillennial.com/no-jail-time-for-former-dem-ba...
A BLM activist who was the diversity executive at Facebook and Nike has been sentenced to more than five years in prison for stealing over $5 million. https://thepostmillennial.com/diversity-exec-scams-facebook-...
by pkaye on 5/28/24, 5:10 AM
I know some people call it the Homeless Industrial Complex here in California.
by romafirst3 on 5/28/24, 7:02 AM
Nonprofits in the USA are basically failings in government.
Non profits at their best provide services that any half decent government should provide but do it at a fraction of the efficiency that the government could.
At their worst they are private individuals spending tax payers money (that’s what tax breaks actually are) on personal causes and self enrichment.
That’s why it’s interesting seeing a right wing publication advocating for fewer non profits, I’m all for it. Cut tax breaks for non profits, reduce funding of non profits and fund government to provide the services.
by burnished on 5/28/24, 4:40 AM
If true I think this should lead to charges and jail time, sounds lime fraud and embezzlement on a massive scale.
by niemandhier on 5/28/24, 5:38 AM
I believe that this can be solved least for housing.
If you construct a housing cooperative that has the following properties the entity should be incentivized to maximize the number of housing units:
1. Each tenant must own shares of the coop. 2. Shares per member are capped. 3. Profit must be reinvested 4. New shares can only be issued for new units build.
Rather than subsidizing rent, the government can subsidize the building of new housing, the corresponding shares can be handed over to new tenants.
Since tenants are shareholders, the system stabilizes at a point where rent and living conditions are acceptable.
In Germany this type of construction is called a “Wohnungsgenossenschaft”, and receives some tax incentives. Currently about 3 Million people are living in flats provided like this. It’s probably one of the only working pieces of socialism.
by wnc3141 on 5/28/24, 5:07 AM
Just noting the tilt of the article, "American Affairs Journal" was founded explicitly to be a conservative platform.
by kayo_20211030 on 5/28/24, 1:04 PM
I agree in general, but non-profits themselves have very little to do with the argument, which seems to be that the outsourcing of what should be rightly considered government services for the common good results in gross and unpunished waste. Whether the organization receiving the public largesse is for-profit or a non-profit seems beside the point. Government administrations, at all levels, have abdicated their responsibilities to the citizens, by indulging in this form of wasteful theater. A perfect and horrendous confluence of neo-liberal and faux-progressive ideologies has led us to where we now stand.
by blackeyeblitzar on 5/28/24, 4:36 AM
> Yet nonprofit organizations are frequently the exact opposite of what they appear to be. As a consequence of the benefit of the doubt provided to nonprofits, there is rarely enough oversight to guarantee that they are doing what we pay them to do.
This type of unaccountable grift is common in Seattle. During the height of BLM, the city gave lots of money and even public property to random organizations. Taxpayers hard earned money was not just diverted away from core city needs but not really tracked. The same has been true of unaccountable programs to combat homelessness (the “homeless-industrial complex”), with little in terms of metrics to understand what was happening.
A lot of this happened because most citizens are too busy to keep track of these things, while activists push for spending on their ideological pet projects, and activist city leaders respond by handing out checks without any competitive process (picking sole winners of contracts) or real public input (hearings are swarmed by activists and held at inaccessible times and the general public isn’t even aware they’re happening).
Some example sources to read more: https://www.seattletimes.com/seattle-news/politics/state-aud...
https://sccinsight.com/2021/07/29/the-black-brilliance-resea...
https://roominate.com/blog/2016/anatomy-of-a-swindle/
by benzible on 5/28/24, 5:00 AM
In case you're wondering where this is coming from, see: https://www.newyorker.com/news/news-desk/a-new-trumpist-maga... (https://archive.is/ymp9I)
by j7ake on 5/28/24, 5:03 AM
What a revealing and detailed article. I’m subscribed
by DoreenMichele on 5/28/24, 4:47 AM
Nonprofits that self-righteously declare themselves providers of homeless services actively lobby to make homelessness worse in order to increase their own funding
This is unfortunately all too true.
A primary root cause of homelessness is lack of affordable housing. We should be working towards policies and solutions that foster more "market rate" affordable housing, not affordable housing via government programs or nonprofit organizations.
by komali2 on 5/28/24, 6:08 AM
> This is the state of affairs in almost every city where “progressives” have a large impact on local politics. Progressives claim to support government spending programs, but also have an anarchistic, anti-governmental attitude that can be seen in their support for policies like police abolition in 2020. Although progressives want the government to fund public programs, their opposition to centralized state power means they often don’t want the government to run the programs being funded.
This article is comingling vastly different political ideologies. Very few anarchists would have any interest in engaging the political system to solve problems, since most anarchists believe the political system is one of the systems originating the problems society faces today.
There is an alignment between anarchists, socialists, leftists, progressives, and even some liberals (very few!) in police abolitionism, but only because the police are so wildly out of control in the USA that it's easy to align along the general idea of "starting over." And even then, liberals seem to be performative in this support - as soon as students started protesting genocide against Palestinians, liberals predictably started asking why the police aren't out there brutalizing these "student terrorists." Anti-houseless spikes painted with a rainbow flag.
> Although progressives want the government to fund public programs, their opposition to centralized state power means they often don’t want the government to run the programs being funded.
In my opinion a total mischaracterization. Leftists and DSA types absolutely support centralized state power and socialization / nationalization - go read their takes on public transit and public housing. This whole article is describing neoliberal politicians allowing capitalists to do capitalism however they please, which is in line with neoliberal ideology. San Francisco is the best example of the failure of neoliberal ideology, and just because it's a city full of dirty anarchists doesn't mean said dirty anarchists have any political power - SF is politically neoliberal through and through.
> What is taking place in America’s most performatively socialist urban areas is that taxes are constantly raised in order to fund public services
I don't understand where the author gets the idea that American urban areas are "performatively socialist" from a politician standpoint. American politicians in every city are famously, painfully neoliberal. Eric Adams mischaracterizing and verbally attacking peaceful protesters. London Breed called the cops on a homeless guy she saw laying on a bench. Ted Wheeler pathetically tried to co-opt Black Lives Matter protests before being roundly rejected and then sending the cops to brutalize peaceful protesters. American urban politicians are not socialist nor are they performatively so.
> where “socialists” privatize government services at every opportunity;
I just don't see this happening. I see neoliberal Democrats doing this, but never avowed socialists. Happy to be corrected. So far as I know even SF has only ever had one avowed socialist politician, Chesa Boudin, and as soon as he was elected every politician in the city banded together to tank his career. Never has such as microscope been pointed at a District Attorney, with predictable results. Everyone was happy to take a potshot and cash in on the socialist under whom violent crime was dropping and who was prosecuting an "unusually high" volume of cases.
At least the author isn't leaning into the privatization and pointing out the obvious issues this is causing. I would be interested in seeing an analysis on how leftist ideology offering actual solutions is being co-opted by neoliberals serving the same cause as the reactionaries they run against every election.
by idiot-savant on 5/28/24, 6:35 AM
nonprofit organizations hire convicted felons—including murderers, gang leaders, sex offenders, and rapists—who go on to commit more felonies while receiving hundreds of thousands of dollars in government contracts;
LOL, what a big pile of bullshit.
by mistermann on 5/28/24, 6:09 AM
See also:
- freedom
- democracy
Lots of people are able to laugh at people who believe in the "freedom!" meme of America, but almost no one can do the same for "democracy".
If there was a list of most powerful magic words, Democracy would be very close to the top of the list, right along God and Science.
by phendrenad2 on 5/28/24, 4:59 AM
This is enlightening. I've long suspected that people's ire toward Dean Preston et al. was misguided, and that the entire political apparatus, from end to end, was compromised by a loose confederacy of regulatory captors. It's like a hydra, if you manage to cut off one of the arms the others will ensure that it has room to regrow.