Nonprofit Newswire | The Difference Between For-Profits and Nonprofits

 

September 22, 2010; Source: The Oklahoman | This vituperative anti-nonprofit op-ed by Walter Williams deserves circulation and commentary. Williams is the John M. Olin Distinguished Professor of Economics at George Mason University in Fairfax, Va. and a board member of both the Reason Foundation and Hoover Institution. He is on the advisory boards of Cato Institute, Landmark Legal Foundation, and Heritage Foundation, and an occasional substitute host for Rush Limbaugh’s radio show.

For some reason, Williams writes about nonprofits by taking off on the sexual harassment investigation of the executive director of Philadelphia Housing Authority, a public sector agency. For Williams, the PHA is a nonprofit institution, and nonprofits, he suggests, “pompously” pronounce themselves as “more righteous” than the for-profit sector. Williams disagrees. Here’s his worldview:

“The fundamental difference between nonprofit organizations and their profit-making counterparts is that nonprofits tend to take a greater portion of their compensation from easier working conditions, more time off, favors and under-the-table payments. Profit-making organizations take a greater portion of their compensation in cash, except those that are highly regulated. In the profit-making world, there is much greater monitoring of the behavior of people who act for the organization. Profit-making organizations have a financial bottom line they must meet, or sooner or later, heads will roll. Not so with nonprofits, which have no bottom line to meet. On top of that, incompetence for nonprofits means bigger budgets, higher pay and less oversight.”

Breathtaking analysis and prose there, no? Given his Cato, Hoover, and Heritage positions, one wonders whether Williams’s apparent broad-brush hostility toward nonprofits reflects a new conservative attack on the nonprofit sector, conflating nonprofits and government as the intrusive nanny state that is the enemy in the Tea Party’s “Contract from America” and the Republican Party’s “Pledge to America.”—Rick Cohen