Tuesday, March 15, 2011

What law applies?

OK, 83% of those who responded to our survey said demand for the services/products provided by their non-profits increased during the past year.  So if the law of supply and demand applies, prices should have gone up, right?  But 83% of our respondents said their revenue was flat or decreased.  So what economic law addresses this? (By the way, the fact both came in at 83% is a coincidence. Not everyone who reported an increase in demand reported flat or decreased revenue.).  So what economic law addresses this non-profit trait?  While the old saying about the poor getting poorer would seem to apply, it is hardly a scientifically generated economic principle.  One thing is for sure, the supposition that the wealthy will donate enough to make up for the loss of governmental support if given tax breaks during tough times is not supported by our data.

Anybody have an economic formula for this property of non-profits?

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