In theory, many hospitals and universities in the US should fit into the “positive externalities” model—they significantly rely on both program service revenue and subsidies from private donors. My understanding is that nonprofit hospitals and universities are often poorly governed, so I’m curious whether this is related to the serving-two-masters problem as opposed to sector-specific pathologies.
ETA: Someone who knows more than I do about microfinance may be able to comment on how experience with microfinance orgs updates toward or against the subsidizing positive externalities in a unprofitable business model being viable more generally.
Re subsidizing positive externalities: I’m not necessarily suggesting that typical instances of external subsidization of businesses with positive externalities are particularly impactful, just that there may be possible cases, especially if we are looking for opportunities from an EA lens.
In theory, many hospitals and universities in the US should fit into the “positive externalities” model—they significantly rely on both program service revenue and subsidies from private donors. My understanding is that nonprofit hospitals and universities are often poorly governed, so I’m curious whether this is related to the serving-two-masters problem as opposed to sector-specific pathologies.
ETA: Someone who knows more than I do about microfinance may be able to comment on how experience with microfinance orgs updates toward or against the subsidizing positive externalities in a unprofitable business model being viable more generally.
Re subsidizing positive externalities: I’m not necessarily suggesting that typical instances of external subsidization of businesses with positive externalities are particularly impactful, just that there may be possible cases, especially if we are looking for opportunities from an EA lens.