From Managing in a Time of Great Change:
The real answer to the question “Who takes care of the social challenges of the knowledge society?” is neither “the government” no “the employing organisation”. It is a separate and new social sector. Government has proved incompetent in solving social problems. The nonprofits spend far less for results the governments spend on failures.
Instead of using the federal tax system to encourage donations to non profits, we have the IRS making one move after the other to curtail donations to nonprofits. Each of these moves is presented as “closing a tax loophole”. The real motivation for such action is the bureaucracy’s hostility to markets and private enterprise in the former Communist countries. The success of the nonprofits undermines the bureaucracy’s power and denies its ideology. Worse, the bureaucracy cannot admit that the nonprofits succeed where governments fail. What is needed therefore is a public policy that establishes the nonprofits as the country’s first line of attack on its social problems.