Warren Buffet (2nd wealthiest American) and Pierre Omidyar (ebay) are unhappy with the current charity/non-profit structures, abuses, high paid presidents, etc. One would think with these type money men wanting to do something good with their money, but not liking the waste and high pay of our current charities and non-profits, and the small percentage of actual money that actually reaches the supposed helpees that we could come up with a creative way to revamp charities so that big money people would be much more excited about giving money to do good things for our society. Yet both men have not found a way they are comfortable with and as a result don't give much to charities and non-profits in a relative sense because of this. They want to, but the current system is not to their liking. They feel they are burning their money by giving to current charities and non-profits, and that is not a comfortable feeling.
Congress should revamp certain criteria for non-profits that would allow for more efficient running of non-profits as well as get big money backers getting excited about being part of something entrepreneurial-like as oppose to expensive/bureucratic like.
Perhaps the idea would be along the lines if start-ups cannot find venture capital, they can put on the non-profit status cap and get hefty rewards in their salaries if their companies do well and give away extra money to doing good deeds for society much more efficiently--- like subcontractors. If the quasi-non-profit didn't like what its hired help was doing, it would replace them with more efficient ones, just like private enterprise would.
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In the UK those charities that seek benefactor funding often make a big play as to their low level of administration overhead.
If these two guys are as smart as one would presume, they must know something about efficiency -- they could start their own .org to serve the needs they find most pressing. The Gates Foundation has done a number of excellent things to innovate and go upstream to get at root causes instead of treating symptoms. There may be some lessons there. I find it hard to believe that these two smart guys can't find a single (!) efficient non-profit. I wonder if this is just an excuse.
Re your idea, if a start-up cannot get venture capital, they will still need capital from somewhere. The founders will still have to 'sell' their marvelous idea to potential donors. I wonder how they might go about convincing us in advance of how efficient and effective they will be. Good ideas from this realm would help existing, worthy nfp's too!
Maybe what we (as potential donors) need is a 'yellow pages' for charities, with some standardized efficiency/effectiveness rating system...sort of a Consumers' Report - or something like the Best Companies To Work For criteria. Trouble is, the people most devoted to the 'cause' would rather be serving their clients than writing up reports that measure their efficiency. Hmmm. Maybe this whole question needs re-thinking at the macro level....?
GuideStar.org already gives the tools to evaluate charities. It doesn't have a ranking system because each individual will want to look at different factors when deciding if charities are "efficeint". As GuideStar International spreads around the world maybe it will even choke off some terrorist funding.
WarrenBuffet.org, as someone had suggested, could be formed as a TRUE not-for-profit enterprise. It would attract like-minded individuals who are similarly disenchanted with the high overheads associated with most charitable groups. Mr. Buffet and all other contributors would thereby commit to paying for ALL OVERHEAD relative to their contribution as a percentage of all donations received. Fully 100 percent of all contributions would be targeted and tracked to reach the end-recipient community with a separate administrative account and function being responsible for all overheads and operational costs associated with the charitable giving. Of course, the organization would likely have to apply for and receive offical non-profit standing from a taxation point of view should it seek to maximize the target market of philanthropists. Donators would only receive tax crdits for the amounts going to the actual charity and not to the administrative funding pool. That would be the price they would pay to see a 100 percent objective on the other side.