Why are so many non profit organizations failing the public?

http://www.google.com/url?url=http:...ggmMAI&usg=AFQjCNFBVxY-0EZeFtGg2kqV5VykSJbrpg

Anybody have any failed non profit experiences. And share why you think so many don't do what they set out to do?

 

Personal agenda by the operators. The original intent can get very skewed and become a gravy train for the current hierarchy running it. Not true in Clinton's case though, was rotten to the core from day one.

 

I worked with non-profits regularly when I worked for the government. Funding was often their problem. The other thing was that often the founder angles on this as being a well-paying job and aren't flush with cash being thrown at them or they are not willing to relinquish personal control of the organization over to an actual Board. Some are tied to very specific projects that perhaps fail to be able to go forward because of other reasons--like a committee to save a piece of historic property or something like that.

New non-profits have an easier job getting goods and services donated than actual cash. Existing non-profits often will have their funds dry up if there is even the appearance of mismanagement. On the plus side, others have been known to absorb the assets or causes of the ones that do fail. For instance, several local banks got stuck with a bunch of foreclosed slum condemned property that had been churned and pumped until the collapse. One church-based charity took all these properties in as donations regardless of what their condition with the hope of being able to rehab him and put poor people into them. That group ran out of money after a couple rehabs and had other issues that resulted in it being disbanded. Some ended up in Habitat's hands; some of the larger ones ended up in another group that was looking for large old houses to rehab for shelter projects. Most ended up in the government's hands and were torn down as blighted property with the land being turned over after that to a non-profit created by the local government to undertake projects the city itself cannot become involved in. I think some might end up being parks or community gardens eventually. Not sure. There are a few streets where the city is just wholesale tearing down everything that stands but their future plans for all this land are not exactly set in stone.

 

Founders have to understand that it's not their business. It's a public business. It's not theirs to keep. I wonder if they get any type of education regarding this. Because this is elementary.

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This is why non profits have to be monitored more closely.

 

http://www.google.com/url?url=http:...ghGMAc&usg=AFQjCNGthWwSnLD0OMdMBF8mJOfF-f_WsA

There should be mandatory training. No way should folks be allowed to just open up an organization and be incompetent.

 

I ended up working with one over the summer. It was a great experience. I have to agree with this. There's a lot of personality that goes into a nonprofit to help make it work. Thankfully mine was run by a board and there was funding.

 

What does this personality mean?

 

It means that whoever is running it, is really dedicated to it and wants it to be completed how they want it to be done.

 

And what if they are wrong on the approach? Success has nothing to do with dedication when it comes to non profits.

 

If they're on the wrong approach, then they will not accomplish their goals. Where are you going with this?

 

I'm just asking. The thread is abouty why non profits fail.

 

They tend to learn the hard way too often that they have no idea what they are doing. Unfortunately a lot of folks know exactly what they are doing--self-dealing. I have seen this in several non-profits and even in several churches. It is becoming all too frequent for churches to be run by a couple people who are fleecing the flock. There are a lot of faith-based shenanigans in our area. A church controlled by a family a couple counties over was involved in a massive mortgage fraud scheme that sent most of the family to the federal pen. IIRC correctly they were doing something like convincing people to deed their property to some entity so they could use it as collateral to get loans for the church at lower interest rates but they were in reality transferring these properties through a bunch of LLC creating fake paper trails to drive up their transfer price history and taking out insane mortgages on them, skimming off the top and using the houses and the mortgages as the basis of some sort of pyramid scheme.

 

I see, I thought there was something else. Yeah, the nonprofits can fail that way.

 

1. Nonprofits are only required to spend 5% of donations collected on the actual programs or causes. Up to 95% can be spent on admistrative costs and other expenses
2. The bureaucracy and regulations involved in qualifying for and maintaining 501c3 status for tax deductible exemptions pretty much requires professional staff to manage.
Otherwise its not cost effective and most charities are better off operating as individual efforts that dont require tax filings and professional accounting etc.
3. In practice unless a group is big like Red Cross or St Jude's and can afford professional tax accountant and grant writing staff, its often easier to manage charity programs through churches or individual gofundme accounts. Or through individual DBA or LLC where any expenses are treated as business costs at 100% deductions written directly off the income. So its like running a not for profit business with less paperwork and requirements than an official 501c3.

The real issue is the overhead from administrative bureaucracy tied to official 501c3 that most groups can't afford. So the ones that can end up spending money on staff to meet these tax regulations or they end up losing their status if they can't afford to pay staff and focus on services . only the bigger professionally run nonprofits can generally manage , so that means paying overhead costs instead of focusing on services as the priority.

 

I have worked with some well-established, well-funded ones. Mostly what happened was I was a Congressional staffer and one of our district office assistants had experience with non-profits and grant applications and created this huge number of case files for people seeking federal grants and then turned around and quit. I was one of the poor suckers upon whose desks stacks of these things started piling up and ended up with far too many people who thought that they should be praised and glorified for and be paid even more than they were making at a real job just because they had an idea to start a non-profit. Getting grants for small-scope concrete projects at existing community-based enterprises is far easier than getting them for general operations funding. Of the 800 or so cases, we were able to get grants for maybe 120 of them.

 

I sure there are a lot who purposely do the wrong thing. But I guess there are some who do the wrong thing but don't know any better.

 

And this defeats the purpose of the organization in the first place.

 

yeah that sucks for the public.

 

I think we should end a non-profits. They seem to often operate as tax evading slush-funds.

 

That's the issue. There are some that do good. And the ones who don't make it bad for everyone else.

 

These laws need to be updated because they allow the organizations to screw over the public. Which is why they are so scrutinized.

 

Created by attorneys, inherent conflict of interest. If they fulfill their mission statement and purpose, no more job.

 

Hmmm. That needs to be looked into then.

 

They also don't understand that they have a responsibility to accomplish their goals. Financially, and by public perception. Which counts.

 

Best to probably ask Trump, the ultimate pro at self dealing. I believe his "foundation" is still under criminal investigation so he can't wind it down just yet? What a sweet deal, be the beneficiary of your very own charitable foundation, with the help of the taxpayer - yessireee, Trump knows how to play the taxpayers for the sheep they are, LOL.