Why People Say There's a "Nonprofit Industrial Complex"

Rather than building mass movements, talented organizers get funneled into staff and admin jobs just to keep the charity running.

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1. The relationship between charity groups and their wealthy, corporate funders (which often involves the exchange of funding for soft control).

Wait. Aren’t charities and nonprofits a good thing?

Lots of nonprofits do important work — like, say, In These Times, which is a reader-supported 501(c)(3). But the nonprofit-industrial complex” refers to the larger ecosystem of elite foundations and corporate influence-peddling.

Incite, a network of radical anti-state violence activists, convened a conference to detail this relationship in 2004, titled, The Revolution Will Not Be Funded: Beyond the Non-Profit Industrial Complex.” Incite had been grant-funded by the Ford Foundation— funding Incite lost because of its support for Palestine.

As outlined at the conference, nonprofits that depend on corporate and foundation funding do so often to the detriment of their missions. Time and energy is spent laundering the reputation of corporate funders, for example, rather than on their stated purpose. Or, rather than building mass movements, talented organizers get funneled into staff and admin jobs just to keep the charity running. In other words, as was said at the conference, the nonprofit-industrial complex model encourages social movements to model themselves after capitalist structures rather than to challenge them.”

Why do we have nonprofits, anyway?

It kind of started because status-seeking rich people wanted to fund their own projects rather than pay their fair share of taxes.

"It feels like I’m at a firefighters’ conference and no one’s allowed to speak about water, right? ... [The rich should] just stop talking about philanthropy and start talking about [paying their] taxes." — Dutch historian Rutger Bregman, speaking on a panel about inequality at the 2019 World Economic Forum

Philanthropy as we know it started after the Gilded Age. The widow of railroad magnate Russell Sage established one of the nation’s first foundations in 1907, and Andrew Carnegie and John D. Rockefeller quickly followed. When Congress created the federal income tax in 1913, it exempted charitable contributions — and a feel-good tax shelter was born.

In recent decades, as income inequality has increased and the public service sector has shrunk, the number of nonprofits has grown exponentially—from about 99,000 groups in 1946 to 1.5 million today. Meanwhile, key human services, such as healthcare and education, continue to transition from the public sector to various nonprofits.

So how do we escape the nonprofit- industrial complex? 

The easiest answer? Tax the rich. Wealthy donors shouldn’t get to dictate what a just society looks like— or the work needed to get there.

This is part of The Big Idea,” a monthly series offering brief introductions to progressive theories, policies, tools and strategies that can help us envision a world beyond capitalism. For recent In These Times coverage of the non-profit sector, see, A Quiet Frenzy of Union Organizing Has Gripped the Nonprofit World, Major Public Defense Nonprofit in New York Is Unionizing and In the Shadow of Covid ACLU Joins Non-Profit Unionization Surge.

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