This summer we had the privilege of having a young activist stay in our house while she did an internship with a local housing rights outfit. Listening to her impressions, it was quite clear that she was learning that government funding and the non-profit structure itself were barriers to organizing members to assert their rights.
This is a very welcome development. In the 1990s, organizers were far less questioning of foundation- or government-funded 501c3 structures as vehicles for their organizing. That conventional wisdom seems to be changing.
Eric Tang has taken a shot at reexamining the form in "The Non-Profit & The Autonomous Grassroots" originally published in Left Turn. He observes that one promising effort to move beyond the constraints of the non-profit form is:
Tang's essay, along with others wrestling with this difficult topic, is anthologized in The Revolution Will Not Be Funded, by INCITE! - Women of Color Against Violence.