Who oversees non-profits to make sure their donations are spent wisely?
Ken Stern, former CEO of NPR, sought to expose the lack of accountability and structural flaws in the non-profit section in his new book "With Charity for All: Why Charities Are Failing and a Better Way to Give." He talks with John Berman on "Starting Point" about what needs to change for these organizations.
Stern believes that from a charities inception its validity is questionable. The government does not have strict guidelines for what qualifies as a non-profit, he argues.
"Anyone with a stamp and facility with government forms can start a charity, and when you start looking at the charitable sector you see a lot of charities that are actually for profit organizations for all intense and purposes," he says.
Stern attacks such charities as the Red Cross and D.A.R.E for not conducting proper research, and limiting the barriers to entry for other competing charities to come in with more "innovative and successful research."
Stern further argues that a big problem lies with donors. Americans are extremely charitable and are "actually the most generous donors in the world, with the average family rich or poor gives about $2,700 a year," he says.
However, donors do not put in the effort to find effective charities. For many,donating to certain charities become a habit, and many give to charities with recognizable brand names, or charities run by friends.
"It takes work to find the good charities, and that is where the change will have to start," Stern says.