How to Overcome Government Dependency: Non-profit Roles & Economic Freedom

In Part I of "How to Overcome Government Reliance," we explored overcoming government dependence by reducing spending, empowering local solutions, and increasing accountability. But there is more, as we are not only looking into how we can reduce taxes over time but rather seek to understand what society can do to become less reliant on government support.

As we saw, state and local governments should take more responsibilities and back responsibilities that once sat with them, such as education, to reduce government reliance. However, it's crucial not to simply shift responsibilities as that would only shift taxpayers from the federal to the state level. To address this is where non-profits and non-governmental organizations (NGOs) come into play.

Managing Non-Profits and NGOs Better: Accountability and Efficiency in Taxpayer-Funded Operations

Non-profits and NGOs play a vital role in tackling societal challenges, but their heavy reliance on taxpayer funding through government grants limits their independence. To empower communities more effectively, these organizations should seek to reduce their dependency on public funds.

By diversifying their funding sources—such as private donations and corporate partnerships—non-profits can allocate more resources directly to their core missions. This shift not only enhances accountability but also fosters innovation and sustainability.

Ultimately, by overcoming government dependency, non-profits and NGOs can strengthen their impact, engage communities more robustly, and demonstrate their ability to deliver results without relying on taxpayer dollars. The following gives examples of how they can optimize for less government dependency or more mindful spending in cases of government subsidies.

• Public-Private Partnerships (PPPs):
  Instead of direct taxpayer funding for NGOs, the government could encourage more partnerships with private businesses or individuals to tackle societal issues.

  An illustrative example of a successful public-private partnership (PPP) between a non-governmental organization (NGO) and a private business is the collaboration between Patagonia, an outdoor apparel company, and Puelo Patagonia, a Chilean environmental NGO. In 2024, Patagonia pledged $4 million through its non-profit arm, the Holdfast Collective, to support Puelo Patagonia's efforts in protecting 132,995 hectares of biodiverse land in Chile's Cochamo region. This initiative underscores a shift in corporate philanthropy towards empowering local NGOs to lead conservation projects, leveraging their on-the-ground expertise to address environmental challenges effectively.

  Such partnerships demonstrate how private businesses can collaborate with NGOs to tackle societal issues without relying heavily on government funding. By combining resources and expertise, these entities can address complex challenges more efficiently, fostering innovation and community engagement.

• Promoting Independent Funding Models:
  Non-profits and NGOs could be encouraged to seek alternative funding sources, such as private donations, foundations, corporate sponsorships, or income-generating activities like social enterprises. Leveraging alternative funding sources would help reduce the dependence on government grants, potentially leading to lower taxes.

  Paired with this, the government could offer enhanced tax incentives for individuals and businesses to donate to non-profits and NGOs, helping them raise funds without relying on government grants. At a minimum, they could be required to raise a specific portion of their funding independently to ensure accountability and decrease reliance on government funding.

• Implementing Strict Spending Caps:
  Limitations on salaries and overhead costs for non-profits and NGOs that receive government funding could ensure that more of the funds from a taxpayer-funded grant go directly toward mission-related activities. While there are no strict caps, guidelines like the IRS Form 990 and Charity Navigator recommend that non-profits keep administrative costs, including salaries, reasonable.

  However, some organizations, such as United Way Worldwide, Nature Conservancy, and Planned Parenthood Federation of America, have faced criticism for spending a significant portion of their revenue on salaries, benefits, and overhead costs. A look at Salary.com's data from January 2025 shows us that the average annual salary for a Chief Executive Officer (CEO), Non-Profit Organization is $865,459. High expenses, especially for salaries and benefits, raise concerns about the funds available for direct mission-related activities and inappropriate use of taxpayer money in the case of government funding.

• Performance Audits:
  Regular, independent audits should assess whether non-profits and NGOs meet their stated goals efficiently and effectively. While this is not an entirely new idea, as performance audits already take place in some cases, especially for organizations receiving government funding, those efforts are often not universally mandated.

  Many government-funded non-profits are subject to performance audits by agencies like USAID or independent auditors to ensure compliance with efficiency standards. Additionally, large donors and watchdog organizations like Charity Navigator conduct evaluations to assess financial health and program impact. Non-compliance with efficiency standards could result in funding cuts or a loss of donor support, highlighting the need for robust, transparent performance evaluation systems across all non-profits and NGOs. In the meantime, if you identified any fraud, waste, or abuse related to programming or operations for which the Office of Inspector General provides oversight, you can report it confidentially here.

• Outcome-Based Funding:
  If taxpayer funding continues to be allocated, a rigorous accountability and performance-based funding system could ensure that non-profits and NGOs spend taxpayer dollars efficiently. However, this shift would require a cultural change in how the government allocates funding—moving away from "blanket" funding based on inputs and towards grants strictly tied to measurable outcomes.

  For example, instead of funding based on the number of employees, provide grants based on the number of individuals served or specific goals achieved. Outcome-based funding is increasingly used in government grants, tying financial support to measurable outcomes rather than inputs.

  Examples include social programs like Massachusetts' Juvenile Justice Pay for Success initiative and Denver's Housing Social Impact Bond, education grants like Race to the Top, healthcare value-based models like the Medicare Advantage Quality Bonus Program, and international aid through the Millennium Challenge Corporation.

  However, many grants, such as block grants, research funding, and disaster relief, still follow traditional input-based models. Challenges include defining measurable outcomes, potential bias toward easier goals, and administrative burdens for smaller organizations. While adoption is growing, implementation varies across sectors.

• Transparency Mandates:
  To ensure accountability, transparency on non-profit and NGO spending requires improvement and should be mandated. Public-funded organizations already must disclose financial information, including salaries and spending, through IRS Form 990. Platforms such as ProPublica's Non-profit Explorer, Charity Navigator, GuideStar (requires a sign-up), and USASpending.gov make this data accessible to taxpayers, who can use it to understand how funds are allocated.

  For example, ProPublica's Non-profit Explorer allows users to review CEO salaries and operational costs, shedding light on organizations that spend disproportionately on administration rather than mission-related activities. Certain government grants, such as those from the Department of Health and Human Services (HHS) or USAID, require detailed reporting on how funds are utilized, but not all grants require such transparency. Federal initiatives like USASpending.gov track grant spending across agencies, but granular insights are often limited.

  Advocacy remains essential to broadening mandates for full financial disclosure. Taxpayers should have the right to know exactly how their money is spent and can engage in advocacy through groups like the National Council of Non-profits, attend public meetings, or testify during hearings to lobby for change. By pushing for greater transparency, citizens can hold organizations accountable, ensure effective use of funds, and reduce inefficiencies in publicly funded programs.

• Encouraging Volunteerism:
  Encouraging volunteer-driven initiatives can help reduce payroll expenses for non-profits and NGOs, lowering their reliance on taxpayer funding. To further promote this, federal and state governments could provide tax incentives for individuals and businesses that contribute time and resources or encourage companies to allow employees to volunteer during work hours.

  While tax incentives specifically for volunteer hours are not very common, corporate volunteering is gaining traction in the U.S. through programs like The Points of Light Foundation and United Way Worldwide, which support businesses integrating volunteerism into their operations. Initiatives like Employer Matching Gifts, where companies match employee donations or volunteer hours, provide financial support to non-profits. Additionally, federal programs like AmeriCorps and The Volunteer Protection Act of 1997 promote volunteerism by offering benefits such as living stipends, educational awards, and legal protections for volunteers. These existing programs highlight the growing recognition of volunteerism as a valuable tool to reduce operational costs while engaging skilled workers in the community.

• Encouraging Grassroots Movements: Empower local communities to address social issues through volunteer-driven initiatives. Those initiatives reduce reliance on larger, taxpayer-funded organizations, as local volunteers better understand their community's unique needs. Grassroots initiatives foster self-sufficiency and create targeted, cost-effective solutions.

  A notable example is the Pike Place Market Foundation in Seattle, which engages local volunteers to support its community, assist low-income seniors, and preserve the Market's culture. By involving residents, the foundation effectively combats isolation and poverty among seniors. Additionally, grassroots movements can partner with local businesses and organizations to enhance their impact, supported by incentives for volunteers like tax benefits. This approach empowers communities to solve their own issues, building stronger, more resilient neighborhoods.

Benefits of Non-Profit & NGO Reforms

• Increased Service Delivery: More funding directed to programs rather than overhead means better services for communities.

• Higher Public Trust: Transparent operations build public confidence in NGOs and the government agencies that fund them.

• Fiscal Responsibility: Improving the effective use of taxpayer dollars by reducing waste and inefficiency.

Achieving meaningful reform in the non-profit sector requires a balance between empowering organizations to fulfill their missions and holding them accountable for using taxpayer funds. While there are several challenges—such as resistance to change and the potential for pushback from those benefiting from inefficiencies—implementing stricter guidelines and transparency can foster greater public trust and drive improvements in service delivery. With careful oversight and clear performance measures, non-profits and NGOs can be more effective stewards, ultimately benefiting the communities they serve.

Fostering Self-Reliance: Empower Individuals and Reduce Dependency

While non-profits and NGOs are crucial in supporting communities, we must acknowledge that our efforts don’t stop there. To truly empower individuals and foster sustainable growth, we need to shift our focus towards enhancing self-reliance and reducing our collective dependency on government support. It's time to take bold steps that encourage independence and instill a sense of agency within our communities. The journey towards empowerment is just beginning, and we can do so much more together, like the examples below!

• Encourage Economic Freedom and Private Sector Growth
  A thriving private sector fosters self-sufficiency and reduces dependence on government aid. To achieve this, reducing excessive regulations and bureaucratic hurdles is crucial. Simplifying licensing processes and lowering compliance costs can empower small businesses, while policies like "one-in, two-out"—where two regulations are removed for every new one added—can prevent overregulation. Promoting entrepreneurship further strengthens economic freedom by providing mentorship and access to resources, particularly for underrepresented groups. Private sector growth without direct financial aid can be encouraged through deregulation, simplified licensing, and tax incentives that reward reinvestment and job creation. Public infrastructure improvements, such as better internet access and modernized transportation, can support business growth by lowering operational barriers. Furthermore, intellectual property protections can foster innovation, while public-private partnerships for job training and apprenticeships can expand workforce readiness sustainably without government loans or grants.

• Promote Financial Literacy and Personal Responsibility
  Financial literacy is foundational for reducing long-term dependency on government support. While some states have made progress in this area, financial literacy education remains inconsistent across the U.S. For example, Florida and Tennessee have implemented mandatory personal finance courses for high school graduation, while others like California only offer them as an elective or integrated into broader subjects. Integrating personal finance education equips students with essential skills such as budgeting, credit management, and smart saving habits from an early age. Beyond formal education, community workshops can offer practical guidance on budgeting, debt reduction, and wealth-building strategies, especially when hosted by libraries, churches, and local non-profits. Encouraging a mindset of self-reliance involves promoting stories of individuals overcoming financial struggles through responsible money management and disciplined saving, reinforcing the importance of financial independence and personal accountability.

• Strengthen Family and Community Support Systems
  Strong families and community networks have long been the foundation of support during difficult times. Reinforcing the role of families in caregiving through incentives such as tax benefits for multi-generational households can help reduce reliance on government-funded care. States like Idaho, Montana, South Carolina, Georgia, Missouri, New Jersey, and North Dakota already provide tax benefits for caregivers through tax deductions or tax credits that cover taxpayers' out-of-pocket expenses. However, an AARP study from 2023 shows that only six states received full credit for 2023.

  Additionally, as previously outlined in the non-profit and NGO section above, supporting local charities, churches, and mutual aid groups is vital in assisting those in need. Simplifying regulations for charities and providing tax benefits for private donations can strengthen community support further. Encouraging private philanthropy and volunteerism, while offering tax incentives for contributions of time and resources, helps create a culture where people rely more on their communities and less on state aid.

• Promote Education and Workforce Development
  Aligning educational initiatives with workforce requirements is essential for promoting long-term self-sufficiency. Expanding technical and vocational training in secondary schools and community colleges equips students for practical careers in various trades, including plumbing, healthcare, information technology, and other labor-intensive sectors such as agriculture and construction. These occupations are crucial to the economy and frequently constitute the foundation of numerous industries.

  Encouraging apprenticeships and internships through collaborative partnerships between businesses and educational institutions facilitates experiential learning while enabling students to earn an income during their training. By recognizing the significance of these physically demanding roles, stakeholders can ensure these positions are valued appropriately and that workers in these fields receive the necessary skills to prosper.

  A systematic integration of vocational training and the enhancement of pathways for experiential learning would elevate the status of these careers, affirming their legitimacy and critical role within the economy. Reforming the educational framework to better align with market demands—by emphasizing the development of practical skills and decreasing the emphasis on degrees with limited career prospects—can empower individuals to achieve independent success in a competitive job market, concurrently enhancing the status and compensation of labor-intensive positions.

• Cultural Shift Toward Self-Reliance
  A significant cultural shift that strongly emphasizes self-reliance and personal accountability is crucial for effectively reducing reliance on government support systems. Many current narratives tend to portray dependency as an inevitable aspect of life for certain individuals or communities, which can create a mindset that discourages personal empowerment and the belief in one's capabilities. By challenging these narratives, we can reshape public discourse to focus on the potential for personal growth and achievement.

  One effective strategy involves sharing compelling success stories of individuals who have overcome significant hardships without resorting to prolonged government assistance. These stories serve as inspirational examples and tangible proof that individuals can achieve stability and success through their own efforts. Such narratives can motivate others facing similar challenges to consider alternative paths and instill hope in the possibility of self-sufficiency.

  In an effort to encourage this cultural shift, it is important to emphasize core values such as personal responsibility, hard work, and the inherent dignity that comes from being self-sufficient through targeted public campaigns promoting these values, educational initiatives teaching skills for personal and economic independence, and community storytelling events celebrating local personalities who embody these ideals. By creating an environment that prioritizes self-reliance and personal growth, we can foster a healthier, more resilient society where individuals feel empowered to take control of their own lives and futures.

While it's easy to write and talk about this, reforming federal, state, and local governments alongside non-profits and NGOs is an epic task but one that encompasses significant benefits. By streamlining and simplifying government operations, optimizing non-profit and NGO management, and adopting fiscal responsibility, the U.S. can align more closely with the Founding Fathers' vision while reducing the tax burden, enhancing service delivery, and creating a government that is truly accountable to its citizens. At best, every citizen can contribute to this change by advocating for programs they see fit and sharing experiences from their own community through social media, benefitting from the power in numbers.

Let me know in the comments which program you would advocate for!