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The problem is you have a huge principle-agent problem with these non-profits. In a standard corporate structure, shareholders elect members of the board who ca
by rsj_hn 6y ago
The problem is you have a huge principle-agent problem with these non-profits. In a standard corporate structure, shareholders elect members of the board who can replace the management. But who elects the board of a non-profit? Why not those who donate to them? There has to be some reliable mechanism to impose accountability by those who give funds.
Now lacking a mechanism for accountability, people give funds with all sorts of strings attached. But wouldn't it be better to give funds with a voting interest attached to the board instead?
- zachlatta 6y agoIt’s very common for the board members of a nonprofit to be its largest donors.
- Kye 6y agoHaving access to money doesn't qualify someone to help do whatever the organization does.
- akiselev 6y agoIn any sizable nonprofit, the vast majority of the board is not involved in actually carrying out the work of the organization. They are there for oversight and political capital.