My argument is as follows:
I have never understood the claim that more non profits is a bad thing. In particular, it is fundamentally anti-democratic for someone else to decide which non profits should exist, or to decide that there should be an arbitrary limit on the number of non profits.
Efforts to reduce the number of non profits, ultimately has the effect of reducing the democratic rights of citizens to take action.
And compare this claim that there are too many non profits, with views about for profit businesses. You never hear the claim that there are too many for profit business, despite the evidence of a huge number of failing, poorly run businesses, engaged in criminal and highly questionable conduct. Rather, the view is that the more for profit businesses there are, the better.The full piece is here.