A new bill making its way through Kentucky’s House of Representatives could result in Frankfort politicos exercising much greater influence over where Kentuckians’ charitable donations end up this year.
Reps. John Will Stacy D-56th District, Marie Rader R-89th District, and Addia Wuchner R-66th District introduced House Bill 51 on January 8th amid concerns that non-profit organizations focusing on disaster relief aren’t utilizing resources donated by Kentuckians to the fullest. If passed, the bill would force any such organization taking in more than $25,000 in donations to file quarterly financial reports with Kentucky’s Secretary of State detailing the amount of funds received, the amount of funds spent, and administrative costs.
Whereas government spending actually does require such oversight from elected officials to ensure resources aren’t wasted – a task which politicians fulfill in notoriously varying degrees – private-sector spending should not be subject to such activity. The reason for this is that the private sector comes with a much more effective method for ensuring efficient resource allocation: the profit and loss mechanism.
If a private business or nonprofit isn’t measuring up to consumer expectations, customers have a swift and effective means for correcting these shortcomings: do business elsewhere. Unfortunately, no such option exists for taxpayers to remove their hard-earned dollars from a government agency once it has proven to be a failure. More times than not, the underperforming government agency usually receives more funding as a result (think public schools, the post office or entitlement programs).
There’s a difference: Taxation is compulsive whereas the private sector is defined by purely voluntary exchanges.
If a nonprofit organization is not meeting donors’ expectations, why must we so quickly turn to the force of government to correct the perceived shortcomings when a tried and true alternative already exists that requires no forced record-keeping or tax-collections whatsoever? Or why should we also go whining to the nanny state whenever a new business, restaurant, or body shop isn’t providing services worth the costs of operation? Absolutely not – because the profit-and-oss mechanism fixes the problem without any help from invasive do-gooders in government.
If Reps. Stacy, Rader and Wuchner are truly concerned about private nonprofits mishandling the resources entrusted to them by private donors, they should do what any other citizen in Kentucky can do: cease donating to these organizations and educate their neighbors.
Instead, they’ve fallen into the age-old trap of blindly turning to the state in any instance of perceived societal ill.