I must say that, in fact, much of the nonprofit sector fits incredibly better into Prof. Hanson’s view of charity as “wasteful signaling” than into the traditional view of charity as helping.

Charity is largely about signalling. Often, signalling has to be expensive to be credible. The "traditional view of charity" seems like naive stupidity. That is not necessarily something to lament. It is great that people want to signal their goodness, wealth, and other virtues via making the world a better place! Surely it is best if everyone involved understands what is going on in this area - rather than living in denial of human nature.