02/26/2013 01:18 pm ET

Why America's Charities Are So Uncharitable

There are more than 1.1 million charities in the United States, and it is perhaps not surprising that some cases slip through the crack. But the story of the Renegade Roller Girls reveals something more basic about our system for identifying what is or is not a charity. Roughly put, we don’t have one. The failure of the IRS and other regulators to act as gatekeepers has consequences that go beyond a few amusing anecdotes. There are substantial economic costs in the form of lost income tax and property tax revenue from organizations that hardly qualify as charities (as well as the deductions taken by their donors). It also means that more and more charities are competing for a finite amount of money from public and private donors, diminishing the effectiveness of real charities. And when people become aware of this problem, it’s understandable that they come away feeling that many charities are downright uncharitable.