The author, a former head of a major nonprofit reveals surprising failings in the charitable world while outlining a new paradigm for charitable activities in America, sharing insights into the unique marketplace incentives and flaws of nonprofit organizations based on his tours of unaccountable U.S. charities. Vast and largely unexamined, the world of American charities accounts for fully 10 percent of economic activity in this country, yet operates with little accountability, no real barriers to entry, and a stunning lack of evidence of effectiveness. This book reveals a problem hidden in plain sight and prescribes a whole new way for Americans to make a difference. Each year, two thirds of American households donate to charities, with charitable revenues exceeding one trillion dollars. Yet while the mutual fund industry employs more than 150,000 people to rate and evaluate for-profit companies, nothing remotely comparable exists to monitor the nonprofit world.

Instead, each individual is on his or her own, writing checks for a cause and going on faith. The author, former head of National Public Radio and a long-time nonprofit executive, set out to investigate the vast world of U.S. charities and discovered a sector hobbled by deep structural flaws. Unlike private corporations that respond to market signals and go out of business when they fail, nonprofit organizations have a very low barrier to entry (the IRS approves 99.5 percent of applications) and once established rarely die. From water charities aimed at improving life in Africa to drug education programs run by police officers in thousands of U.S. schools, and including American charitable icons such as the Red Cross, he tells devastating stories of organizations that raise and spend millions of dollars without ever cracking the problems they set out to solve. But he also discovered some good news: a growing movement toward accountability and effectiveness in the nonprofit world.

This book is driven in its early pages by the plight of millions of Americans donating to good causes to no good end, and in its last chapters by an inspiring prescription for individual giving and widespread reform.