Let's face it, the nonprofit sector has some serious structural issues. Incentives are misaligned, which means energy is not focused, and problems are not permanently solved. They are only addressed or highlighted until the next crises or cause grabs the headlines. There is a different model possible, one that better aligns incentives so that actual solutions will arise from the ideas and goals of all participants, not just from powerful players with their own motives and agenda.

If you learn something useful, it costs practically nothing to share it with the world. If you show the nuts and bolts and flaws of your work, you will earn trust, and someone you've never met will help you make it better. If you do all your work in the open, constituents can alert you if you are going off course, can offer valuable information and insight, can make the work better, and will be personally invested in helping the work succeed.  

Sure you can find 990 tax forms online that any nonprofit that filed with the IRS, a year or two after they are current. But the forms are so opaque and provide no accountability or accuracy about where the money comes from, where it goes, or even how much time a board member actually contributes. I can't think of any nonprofit scandal that was uncovered from its 990. What about real-time, online open books showing each line item as it is incurred? The value of transparency isn't in being able to "catch" people making mistakes, it is that transparency prevents issues from happening in the first place, and raises everyone's performance.

The idea of guilting someone into "giving back" or setting up a fun social event that turns into an awkward and cringey request for money mixes incentives and hides its true costs in a way that creates unaccounted for negative externalities. If you win $2,000 dollars at a fundraising raffle for your charity, do you really want to walk away with the cash? Or what about charities that pay executives hundreds of thousands of dollars to manage their bureaucracy? Forget about what the "fair" salary is, maybe the world would just be better off without that bureaucracy?

Currently too much of the nonprofit world consists of top-down hierarchical organizations. The assumption is that the people at the top "know best" because of their pedigree, status, or personal wealth. Like old-time monarchies or present-day dictatorships, the truth is that resources are only allocated well when there is the opportunity for all participants to "vote" for their own interests by paying a "price." The problem in the nonprofit ecosystem is that cash is not the right currency to best allocate public goods. A better mechanism to allocate resources is possible.

If your charitable contribution toward disaster relief loses 10% of its impact simply by virtue of an electronic transfer of money, then something is seriously wrong. Private companies siphon off billions of dollars from relief efforts, which is the choice donors make now because there is little alternative. But there surely can be a donor platform that is a public good that collects zero rent from the process. In the same way Amazon has collapsed the cost of many industries, we can create a pro bono publico platform to greatly reduce and then eliminate so much of the waste in the nonprofit ecosystem.

Pretty easy to do. This is a monthly update so you can see our progress.

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