Free Market Principles in Claremont’s Charity Sector: A Model for Efficiency and Cooperation

This week, I witnessed an unexpected example of Adam Smith’s division of labor in action—within Claremont’s growing network of charitable organizations. The principles of free markets, particularly the efficiency that emerges from cooperation and specialization, are well-established. Despite being outlined over 400 years ago, Smith’s insights into industrial productivity find strong support in Claremont’s nonprofit ecosystem. Here, the benefits of specialization, combined with seamless communication, highlight the profound advantages of free-market capitalism—even within the charity sector. As in business, productivity in charity work matters.

According to the NH Coalition to End Homelessness, Sullivan County boasts one of the most effective charitable infrastructures in the state. What makes Claremont unique is the cooperation, competition, and specialization among providers addressing a range of social issues—veterans’ services, elderly care, homelessness, addiction recovery, abuse intervention, food distribution, shelter, transportation, and pregnancy support. Each of these services operates within its niche, avoiding administrative redundancy while maximizing impact. The flexible information-sharing among these groups forms the backbone of this system, offering a personal, decentralized approach that allows for greater agility and responsiveness. This is our “special sauce”—Claremont is leading the way in charitable efficiency.

The concept brings to mind Leonard Read’s classic essay I, Pencil or Adam Smith’s famous pin manufacturing example—both illustrating the power of specialization and decentralized cooperation. By contrast, inefficient government projects, such as Weathersfield, VT’s duplicate firehouses or Plainfield’s public library disputes, serve as cautionary tales of bureaucratic inefficiency. Even within Sullivan County and the broader Upper Valley, Claremont stands out as a best-in-class example of social service delivery. When productivity increases, growth follows—and business, even in the nonprofit sector, is booming.

As I continue attending NHCEH’s outreach events, I will share follow-up insights on these efforts. My perspective is rooted in Charles Marohn’s Strong Towns philosophy and his recent book, Escaping the Housing Trap, which I advocated for during the event and continue to distribute. I remain optimistic that the housing market’s challenges stem from policy decisions that can be reformed, legal frameworks that can be adapted, and cultural shifts that can be embraced.

Ultimately, I believe that addressing these systemic issues is the most significant factor in reducing homelessness. Stronger economic policies will lead to sustainable growth, greater opportunities, and a future where communities can provide more. And more is always better.

—Tom Luther

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This blog post contributed by Tom Luther