Barry J. Schwartz, in his Jan. 9 letter regarding charities with portfolios, indicates that he does not understand nonprofit organizations. Nonprofits are not pass-through vehicles, which Mr. Schwartz seems to endorse as the appropriate method of philanthropic disbursement. That’s a function of the government, which passes tax monies and other revenues along to underwrite entitlements and other social services.
Non-profits are businesses. Their “product” is the provision of quality programs for people in need. Like any business they need the resources to continue to serve their clients effectively. They must be able to attract competent staff and spend some time in research and development of newer and better methods to do their work efficiently. This takes money. An appropriate way to guarantee that is to establish a reserve fund that provides financial support for operating services and assures fiscal sustainability when the government or other funders do not come through.
Many nonprofits, including some in the Jewish communal network, are now faced with closing their doors because they neglected to establish a portfolio and responsibly administer it. Mr. Schwartz would agree, I think, that these organizations do good work and must respond to their fiscal needs with 21st-century solutions.