1 thought on “The Non-Profit Sector

  1. There is seldom a discussion of how the organization is funded. Though it is demonized in some circles, profit is simply how money can be returned to investors for their trouble. I find it mind-boggling that many smart people consider profit to be evil, while they expect high returns on their pension fund and other investments.

    Without profit, investors cannot be rewarded, so it’s philanthropy. This is well and good, but do we wish for economic activity to be dominated by organizations funded at the whim of the wealthiest?

    Lastly, Professor Rojas’s post and the commenters avoid one of Dr. Kling’s points, which is about *working* for non-profit vs. for-profit organizations. To an economist, a for-profit company that provides useful goods and services as just as beneficial to society than is a non-profit, if not more so. Prof. Barro at Harvard even wrote once that it would be better for society if volunteers whose opportunity cost is high (i.e., high-earners) instead worked more hours and gave the money to charity. Volunteering, he argued, is inefficient for such people.

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