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Jerone Hsu, who graduated from Columbia College in 2007, has two small silver rings in his left upper ear, an easy, genuine laugh, and a penchant for meandering sentences. The walls of his one-bedroom apartment on 103rd Street and Riverside Drive—an apartment owned by his parents, who, after abruptly deciding to move to Taiwan, left the place to him—are decked with his own unframed, dreamlike paintings. Hsu could easily be another cool kid living the good life on his parents’ dime. But the t-shirts and hoodies strewn in boxes in his living room aren’t Hsu’s private collection of designer threads: Some say “Relief” in block letters on a green background, others bear the logo of a San Francisco-based conflict-resolution group called the Mosaic Project.

Hsu is the founder of Prime Produce, a small nonprofit organization that aims to create new ways to involve creative young people in the nonprofit sector. “I think in our official mission statement it’s something like, ‘To mutually inspire and enhance the next generation of nonprofit leaders,’” says Hsu. He laughs. “Something shticky like that.”

Over the last two years, Prime Produce has evolved from a small producer of benefit apparel to a nonprofit jack-of-all-trades—an “amorphous, general, method-based kind of nonprofit,” according to Hsu. Prime Produce has organized free LSAT prep classes for students with a demonstrated interest in public-interest law, raised funds for an organization that aims to end indentured servitude in Nepal, and done Web design for a group that contributes money to earthquake relief in China (hence the “Relief” t-shirts). But Hsu is less interested in contributing to any one cause in particular than he is in the process of getting students involved in the world of nonprofits. “Our goal is to raise resources for the nonprofit sector, but really what we’re focused on is giving people a type of programming that will teach them something that they can take with them that has to do with the nonprofit sector. So we’re hoping that participation in our programming will entice people to do more things in the nonprofit sector.”

Hsu is hardly the only recent college graduate trying to make a career in the nonprofit world—and he’s hardly the only one to offer unqualified praise for it. Because “nonprofit” and “good” are often seen as practically synonymous, many celebrate the proliferation of charitable nonprofits—which, according to the National Center for Charitable Statistics, numbered well over 1 million in the United States in 2006. When President Barack Obama outlined his plan to encourage public service—a proposal that included federal investment in nonprofits—few, apart from stringent fiscal conservatives, objected.

Yet in spite of its pristine public image, the nonprofit sector can be a thorny, inefficient, and frustrating place, a contradiction lambasted by critics, analyzed by academics, and occasionally experienced first-hand by Columbia students and graduates.

Although non-profits are often associated with altruism, they aren’t limited to charitable pursuits. They need only operate independently of the government and yield no profit. That doesn’t mean nonprofits don’t make money, just that they can’t distribute earnings to partners or shareholders. Instead, all surplus revenue must go towards programming or overhead. To be considered a nonprofit in the U.S., an organization must conform to the requirements laid out in a provision of the federal tax code known as 501(c). While Habitat for Humanity, which builds homes for low-income families around the world, is a 501(c) nonprofit, so are other not-quite-so-charitable organizations like Focus on the Family, the National Rifle Association, and Columbia University.

More easily recognizable, humanitarian nonprofits—incorporated under the third section of 501(c)—must exist solely for purposes that are “religious, charitable, scientific, testing for public safety, literary, educational, fostering national or international amateur sports competition, or the prevention of cruelty to children or animals,” in the grammatically questionable jargon of the IRS. Charitable nonprofits often receive governmental grants and funding from private foundations. These foundations, such as the Bill & Melinda Gates Foundation and the Ford Foundation, are controlled by wealthy individuals, groups, or families and spend private monies instead of raising funds from the public. While some foundations create their own philanthropic programs, others donate to the nonprofits of their choice through grants that often come with spending restrictions. Private foundations enjoy positive publicity from their support for nonprofits, exercise control over how exactly their donations are spent, and deduct charitable gifts from their annual federal taxes.

Some critics are troubled—even outraged—by the process through which nonprofits raise funds. They describe an overarching “nonprofit industrial complex” (or NPIC, in activist-speak), a system in which the government and wealthy private foundations censor and control the work of nonprofits by awarding or withholding funding. From this viewpoint, which has been propounded most vehemently by Marxist and feminist groups, nonprofits merely reproduce an exploitative capitalist system without effectively challenging it. Because nonprofits are held hostage to funding from mainstream institutions, critics say, more progressive movements are marginalized. “The NPIC functions as an alibi that allows government to make war, expand punishment, and proliferate market economies under the veil of partnership between the public and private sectors,” writes Andrea Smith in The Revolution Will Not Be Funded: Beyond the Non-Profit Industrial Complex, a book of essays published by INCITE!, a feminist group that had a grant from the Ford Foundation revoked in 2004.

Even for less-radical scrutinizers of the nonprofit sector, the current government- and foundation-fueled system is seen as problematic. Debra Minkoff, a professor and chair in sociology at Barnard College, specializes in the organizational structures behind social movements. In a phone conversation, Minkoff, whose speaking cadence is deliberate and unhurried, describes the ways in which nonprofits are limited by their relationships with other institutions. “There are a lot of pressures on nonprofits that come from what academically we refer to as external environment. Be that funders, be that the government, be that the interests of their constituencies, or their constituents, or their clients, in the case of service providers—which is what a lot of nonprofits are,” says Minkoff.

In an article titled “Nonprofit Mission: Constancy, Responsiveness, or Deflection?” Minkoff and Walter W. Powell (a professor of sociology and organizational behavior at Stanford) examine the ways in which external environment affects nonprofits’ missions. Minkoff and Powell write that while a few nonprofits hold fast to their original missions in the face of pressures to conform, most become more conservative over time, vastly change their mission to secure new funding, or fail after refusing to adapt to their environment.

Because of their dependence on grants and donations for funding—many of which come with spending requirements—nonprofits face many constraints that for-profits don’t. Minkoff says that nonprofits are “more vulnerable to pressures that come from outside to do certain activities, organize in certain ways, and kind of walk a tightrope between their main mission and what the expectations of them are.”

Hsu is unconcerned that donations from powerful philanthropists would in any way affect the mission of Prime Produce. “I’ll tell you right now,” he says, laughing. “I’ll take money from anyone for Prime Produce. It doesn’t really matter where it comes from. What matters is that people need help. These are real needs, these are real inequities in the world that need to be addressed. They really need to be addressed—that’s the fundamental issue.”

According to Minkoff, the nonprofits most easily pressured to compromise their missions are smaller, more political nonprofits. Indeed, the reason that INCITE!—the feminist group that published The Revolution Will Not Be Funded—lost funding from the Ford Foundation was its position on the Israeli-Palestinian conflict. But Hsu, who has partnered Prime Produce with many other nonprofits, does not feel compelled to enter into the political fray. “We do try to stay away from any sort of nonprofit that would be—what’s the right word?—I guess controversial,” he says. “Maybe this is something down the line that we’re going to have to think about again; maybe we’ll have to take a stand on something controversial. But, at this point, I just want it to be something that people can know is just good, with a capital G. And not have to worry about it. The money won’t go to something that’s politically controversial; we’re sticking to—orphans! Yes. Help orphans. That’s okay. I think everyone can agree on that.”

If Hsu sticks to smaller donors, he will conceivably be able to continue to run Prime Produce without betraying his principles. But for larger nonprofits—especially those looking to expand their programming—competing for grants means conforming to someone else’s ideals. “Logically speaking, the stakes are higher when an organization is seeking out a resource flow from the government, the public sector of the foundation, than if they’re just trying to raise money from members or potential people who might not be members but who might be interested in what the organization is doing,” says Minkoff. “The government and the foundation sector tend to put more restrictions on funding, require more accountability measures, reports, things of that sort. So I think what you have to think about is the power of the organizations vis-à-vis these powerful actors.”

In recent years, walking this tightrope has blurred the distinction between nonprofit and for-profit. Some nonprofits have taken a cue from for-profit firms, organizing themselves based on a corporate model. Teach for America, one of the most popular organizations for graduating college seniors looking to enter the nonprofit world, is renowned for its uncompromisingly hierarchical structure. On the TFA Web site, you can read about the organization’s “seven distinct operating areas,” which include “Growth Strategy and Development,” “Finance and Infrastructure,” and the vaguely disconcerting “Human Assets.”

Professor Minkoff is skeptical that such corporate structures are best for organizing nonprofits. She declines to comment specifically on Teach for America but says, “I think there’s been a trend in the development of nonprofit organizations in the last 10, 20 years towards a more corporate model, with the idea being that these models are more efficient, they’re more transparent, they’re more entrepreneurial. ... There’s really no good evidence that they are more efficient or more effective in meeting their goals.”

Students who have worked in the nonprofit sector, however, see the corporate model as a godsend. Chris Daniels, a senior at Columbia College, currently interns at Teach for America headquarters, which takes up five stories of a midtown office building. Daniels has worked at two other nonprofits, a small microfinance group called Shared Interest, which employs four people in New York, and a Boston-based organization called the Youth Advocacy Project. After having worked at a variety of nonprofits, Daniels says he prefers a corporate model: “Based on part of my background and what I’ve seen, I find a lot of nonprofits are really loosey-goosey. ... Having that somewhat corporate structure and having people buy into everything is really important to accomplish your ideals.”

Mallory Carr, a classmate of Daniels’ who will be working in a Los Angeles classroom for Teach for America next year, has similar praise for the education nonprofit’s tight organization, based on her application experience. Carr spent last summer working at a South African nonprofit called IkamvaYouth, which provides tutoring and educational services to students who live in the destitute shantytowns around Cape Town. (“You know those long trucks that crate stuff? That would house five or six families.”) Carr’s experience at IkamvaYouth was rife with disorganization and miscommunication. “Teach for America is the most organized organization you will ever encounter. Ikamva and Teach for America are just complete opposites—there is no way to compare the two, even though I would say they have similar missions. But I think I would rather see something like Teach for America that I know can sustain itself.”

In some ways, life at a highly organized nonprofit differs little from life in the for-profit sector. At Teach for America headquarters, Daniels is currently working on a marketing project reaching out to TFA alumni, and he has done his share of data entry for other nonprofits. For critics, this pseudo-corporate way of organizing nonprofits is troublesome. In The Revolution Will Not Be Funded, Andrea Smith chides the nonprofit industrial complex for “redirect[ing] activist energies into career-based modes of organizing instead of mass-based organizing capable of actually transforming change” and “encourage[ing] social movements to model themselves after capitalist structures rather than to challenge them.”

Hsu has some concerns about the way large nonprofits run. “There are definitely going to be huge nonprofits, and if they are huge then they definitely need to be organized like that. ... The fundamental issue is it’s costly. The people who run these organizations, they could have a huge-paying job somewhere else, so the nonprofit will pay them a humongous salary. Which makes sense, but it does kind of strike interesting chords. If you’re going to work in the nonprofit sector, should you have to take a pay cut? Is that part of it? I don’t know. That’s not for me to say.” (Currently, 100 percent of Prime Produce’s revenue goes to its programming. Hsu earns money for food doing creative odd jobs.)

For the most part, like Daniels, Hsu is optimistic about the ways that nonprofits can use corporate models for the common good. “Corporate versus non-corporate, I have a little difficulty discerning them, other than how organized they are. When you think corporate, tied with money, that’s the way it is—but that’s also the way it is for a non-profit, and it should be that way. Now, whether or not all nonprofits function that way, I’m highly doubtful.”

Daniels, the Teach for America intern, recognizes some of the drawbacks of the corporate model. “Some of the reasons that we have problems in this country and the world are because of corporations,” he says. “You don’t want to go too far that way.”

But on the whole, Daniels—who plans to go to business school after spending two years in the classroom for Teach for America—thinks that the corporate model’s strengths outweigh its potential weaknesses. He is also enthusiastic about opportunities for nonprofits and for-profits to learn from each other. “One of the things that I think is sort of exciting is looking right now at the explosion of the social sector—it’s not just for-profits and nonprofits anymore. There’s corporate social responsibility, there’s social entrepreneurship, and nonprofits that have for-profit ventures. And I think the tax code, which defines those two things, hasn’t caught up with what’s going on,” says Daniels. Hsu feels similar enthusiasm. “You do have these kind of next-generation, synthesized nonprofits. I think that it’s good that they’re there, and I think that they’re going to lead the way to the next generation.”

It is unclear whether that next generation will effectively address not only the problems posed by the corporate model, but also the challenges that arise from the social distance between those who work for nonprofits and those who benefit from their services. Carr, the student who worked at IkamvaYouth in South Africa, thinks that the nonprofit faced so much difficulty in part because its white Afrikaans founder was not personally affected by the problems of the township. When the founder attempted to delegate responsibility to members of the community, IkamvaYouth’s organization began to unravel. “It wasn’t that they didn’t believe in the organization, but they didn’t start it,” says Carr. “Someone else came in and started it, and then they got involved, and now they’re supposed to take it over. ... I wouldn’t say that in any kind of a negative way; I think it’s just really hard to do.”

Teach for America has not struggled with institutional disorganization, but it too has been criticized for failing to bridge the social divide between those serving and those served. Carr acknowledges this criticism, but notes that, “For those two years that TFA people are in the classroom, they are really bringing kids up to speed academically. ... Do you want to have kids who are coming up to grade level, or do you want teachers who are really understanding their kids’ cultural background? It’s hard to reconcile the two.”

Numerous studies bear out Carr’s belief that Teach for America teachers successfully improve their own students’ performance. But beyond this small-scale effectiveness, Teach for America does nothing to change an entrenched public education system in which poor students are routinely underserved. As many critics have noted, most Teach for America participants leave the classroom after two years, depriving schools of the stability that comes with having the same teachers year after year.

Despite all the criticism, though, employees of corporate-style nonprofits like Teach for America genuinely want to do good. When asked what draws him to the nonprofit sector, Daniels says, “Well, I’ve wanted to save the world for a while.” Daniels likes to tell the story of the day the executive director of Shared Interest (the microfinance nonprofit) announced to the office that the organization had helped a million people. “That’s the kind of moment where you’re like, ‘Wow, this does all add up eventually,’” says Daniels. “This is worthwhile; this is why I get up every morning to do this. And that’s definitely why I’m going into the nonprofit sector—for those kinds of moments.”

Of course, organizers of small nonprofits also see their work as noble. Hsu sometimes speaks in terms that might seem naïve if he weren’t so confident—and if he weren’t currently the executive director of his own nonprofit. “I heard this at one of the conventions that we were at, and I wish I could tell you who said this, but this guy was talking about the nonprofit sector and he said, ‘It’s a unique sector because it’s the only sector where you’re working so someday you don’t have to work,’” recalls Hsu. “You are trying to annihilate your own organization at some point ... which is something that I really like. It’s kind of, like, interestingly destructive, in a way. You’re aiming your weapons of good at this evil thing to destroy it, so you don’t even need to use this weapon anymore.”

If critics of the nonprofit industrial complex, scholars who examine the sociology of nonprofits, and people working within the nonprofit sector agree on anything at all, it is that grassroots organizations have a good chance for success—or, at least, a good chance for staying true to their cause.

Hsu, in spite of his enthusiasm for social entrepreneurship and his distaste for controversy, seems to like this kind of ground-level organization. He seeks to ally Prime Produce with small, committed nonprofits. “Grassroots organizations have a real spinal cord. ... The people involved are friends, neighbors, family,” he says. “It’s not just the organization, or the goals of an organization, but it’s the sentiment between them that pulls them together to work on something. That makes an organization a lot stronger, and I think it makes the work that they do a lot better.”