There's an assumption underlying much of the health care debate that non-profit organizations are better-managed or more efficient or honest than for-profit organizations. President Obama speaks of a public option to "help keep the insurance companies honest," and a bipartisan group of Senate negotiators propose a "network of private, nonprofit cooperatives" to "compete with private insurers."
It isn't necessarily so. ProPublica, itself a non-profit news organization, reports that Harvard professor Henry Louis Gates Jr.'s Inkwell Foundation has filed an amended tax return to the IRS for 2007 after mischaracterizing administrative expenses as research grants. "By reclassifying the payments to Kendall and Wolf, administrative expenses will constitute almost 40 percent of Inkwell's 2007 spending instead of less than one percent," ProPublica reports, adding that Professor Gates also disclosed that "the foundation's second-largest grant, for $6,000, went to his fiancée, Angela DeLeon." Professor Gates is president and founder of the foundation.
It was bad enough that Professor Gates was arrested for trying to get into his own home; it seems additional and undeserved punishment to have these details surface because of scrutiny that probably would never have been imposed if not for the police incident. But given all the disdain directed at for-profit companies, it is a useful reminder that non-profits aren't all paragons of efficiency either.