Vast and largely unexamined, the world of American charities accounts for fully 10 percent of economic activity in this country, yet operates with little accountability, no real barriers to entry, and a stunning lack of evidence of effectiveness. In With Charity for All, Ken Stern reveals a problem hidden in plain sight and prescribes a whole new way for Americans to make a difference.
Each year, two thirds of American households donate to charities, with charitable revenues exceeding one trillion dollars. Yet while the mutual fund industry employs more than 150,000 people to rate and evaluate for-profit companies, nothing remotely comparable exists to monitor the nonprofit world. Instead, each individual is on his or her own, writing checks for a cause and going on faith. Ken Stern, former head of NPR and a long-time nonprofit executive, set out to investigate the vast world of U.S. charities and discovered a sector hobbled by deep structural flaws. Unlike private corporations that respond to market signals and go out of business when they fail, nonprofit organizations have a very low barrier to entry (the IRS approves 99.5 percent of applications) and once established rarely die. From water charities aimed at improving life in Africa to drug education programs run by police officers in thousands of U.S. schools, and including American charitable icons such as the Red Cross, Stern tells devastating stories of organizations that raise and spend millions of dollars without ever cracking the problems they set out to solve.
But he also discovered some good news: a growing movement toward accountability and effectiveness in the nonprofit world. With Charity for All is compulsively readable, driven in its early pages by the plight of millions of Americans donating to good causes to no good end, and in its last chapters by an inspiring prescription for individual giving and widespread reform.
In this provocative expos , the former CEO and COO of National Public Radio takes a critical view of today's nonprofit world, calling for reform and a redefinition of what constitutes a charity. For anyone who has given time or money to not-for-profits, Stern's critique will prove both disturbing and thought-provoking; he questions the value and efficacy of the more than 1.4 million not-for-profit organizations in the U.S., asserting that this industry is beholden to anecdotes rather than the rigorous study of results, leaving "little credible evidence that many charitable organizations produce lasting social value." Stern systematically cites the failures and foibles of organizations like the Red Cross, as well as calling out college bowl games and college sports as multimillion-dollar organizations with charitable status. In addition, he discusses fraud, excessive compensation, and the lack of oversight from regulators. Donors, Stern argues, are frequently uninformed, give reactively, and often unintentionally create more harm than good. Stern's praises organizations like the Gates Foundation, which have created a culture of accountability and measurement, and devotes a short chapter to what is necessary for reform to occur. An engrossing read, this look at the evolution and current state of the charitable world is sure to stimulate debate.