Scaling Altruism

Introduction

Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness.

—Martin Luther King, Jr.

In 2013, Ken Stern, the former CEO of National Public Radio, wrote With Charity for All,¹ an exhaustively researched, evidence‐filled, and incredibly shocking account of how the nonprofit sector is pervasively dysfunctional and filled with organizations that routinely fail to deliver on promises. Whether one agrees with Stern or not, it is clear that the nonprofit sector has at least an image problem: according to the Better Business Bureau, only one in five Americans trust charities to use their donations well.² This mistrust may be a driver behind a collapse in charitable donations from small donors, individuals who make up 98% of all nonprofit supporters. In 2021, fewer than half of American households gave to charity, down from two‐thirds only a decade ago.³

Like the rest of society, the charitable organization landscape in the United States and elsewhere is a story of haves and have‐nots. While giving collapses among the middle class, wealthy donors and foundations continue to donate record levels to universities, hospitals, and other large nonprofits, a class of organizations that share the same tax status as their smaller brethren but are run with the sophistication of major corporations. Approximately 95% of the nonprofit sector is composed of small organizations with average budgets of about $500,000. The ...