This Article responds to recent claims, most prominently by Anup Malani, Eric Posner, and Todd Henderson, that much of the work of the charitable sector should be farmed out to for-profit firms. For-profit firms are said to be more efficient because they can offer high-powered incentives to cut costs. I argue, however, that because of the high costs of monitoring and the presence of externalities, low-powered incentives are preferable for firms that produce public goods, as most charities do. Further, allowing some for-profit firms to receive charitable subsidies would raise the cost of producing those goods in government or other firms because it would diminish the "warm glow" workers enjoy from being recognized as self-sacrificing.
88 Tex. L. Rev. 1213-1233 (2010)
Scholarly Commons Citation
Galle, Brian, "Keep Charity Charitable" (2010). Georgetown Law Faculty Publications and Other Works. Paper 1825.