Private-sector companies have ready access to a gargantuan capital market of tens of trillions of dollars globally. Nonprofit organizations, by contrast, are crippled by capital-raising efforts that are minuscule, inefficient, and badly organized. As a result, nonprofits that have developed solutions for critical and growing challenges—in fields like education, health care, housing, economic development, and environmental sustainability—often struggle to grow.
This is a problem with a solution that is entirely within the power of our legislatures. Like the private sector, nonprofits need investors who take risks in pursuit of financial return.
We might call this approach “dynamic deductibility.” Here’s how it would work.