In Mexico, only 6% of non-profit organization (NPO) income comes from private philanthropy, a stark contrast to the United States, where that figure is 13%. While the U.S. has over 1.6 million non-profits, Mexico has far fewer, and only a small fraction are officially designated as 'donatarias' (authorized to receive tax-deductible donations). The non-profit sector in Mexico, especially its authorized organizations, operates within a costly and politically risky system. Unlike in the U.S., where NPOs can compete with private businesses, in Mexico that income source accounts for only 57%. Mexican NPOs face higher labor costs because they cannot deduct employee salaries from their taxable income, creating a significant disadvantage compared to for-profit companies. The process to obtain 'donataria' status is complex and can take 3 to 6 months, which is unacceptable given that a new organization linked to the government was approved in less than 48 hours. Such double standards undermine the system's integrity. The government, led by President López Obrador, promotes the narrative that tax deductions for donations make NPO resources 'quasi-fiscal'. However, this is incorrect. NPOs are not 'fiscal parasites'; their total income is only about 1.4% of the country's GDP. According to INEGI, the third sector's overall contribution to Mexico's economy is close to 3% of GDP. Successful countries, like Germany, have a strong and vigorous non-profit sector that serves as public dialogue and a counterweight to state power. For instance, Germany has 600,000 non-profits, accounting for just 0.2% of its GDP. The people in Mexican NPOs are committed individuals who literally risk everything to change a reality that stubbornly convinces us that we are not doing well, while some presidents, believing Mexico is perfect and needs no fixing, view such organizations as unnecessary.
