"Are There Too Many Nonprofits?" Is The Wrong Question
Published November 24, 2009 @ 10:51AM PT
Being a young person involved with social change efforts, one of the most common things you hear is some variation of "don't start another nonprofit," or "the last thing the world needs is another nonprofit." I think it's a sentiment that, while sometimes coming from a good place, tends to be one of the least thoughtful conversations we have. What we need to be talking about is how to get more good nonprofits, and fewer bad ones.
Over at Philanthropy 2173 , Lucy Bernholz has started an interesting conversation about the IRS approval process of nonprofit status. As usual, her background and perspective is smart and right on. I particularly love her line that the conversation is "so divisive that you don't want to talk about it with certain relatives at holiday meals." Depending on where you stand, I'm totally one of those relatives.
All that said, where she takes the conversation is actually about the IRS approval process of nonprofits, which I think is an interesting conversation. She wonders if there is some room for a peer review mechanism that could help identify quality and winnow the number of nonprofits. I tend to be skeptical of cutting things off at the stem, but it's still an interesting conversation.
For me though, this whole question is a farce. There is simply no way to determine what the "right" number of nonprofits are, just like it becomes a religious conversations when you want to talk about how to prioritize which issues to address. The idea of civil society is that there are a sector of organizations that exist for the public benefit to ensure that the benefits of society are extended to the greatest number of people.
It seems clear to me that, given the challenges we face, the common sense starting point is that we need:
- more good nonprofits
- less bad nonprofits
Right?
In terms of more good nonprofits, there is a huge amount of activity in this area. Undergraduate and graduate programs dedicated to learning from people actually experiencing the problems we're seeking to address, and coupling that with management, fundraising, and administration are a great start. Groups like GiveWell and Mission Measurement are trying to make it easier for people to understand what makes groups good, how their organizations can get better, and how their dollars can best be spent.
The bigger challenge in a lot of ways is less bad nonprofits. The reason I don't but the "don't start a nonprofit" logic is that in my estimation, the only way to eliminate older, bad nonprofits is to be a game changing organization that does a better job, communicates more effectively, and crowds out the resources for those other organizations. This isn't pretty, but it may be the best answer we have. The point is, yes: embracing competition.
The beauty and curse of the nonprofit world is that any one with a passion for making a difference today can build something, hop online and use a whole new world of tools to get their family and friends supporting them. That's awesome, and gives creative ideas (or, small, localized ideas) room to grow where they simply wouldn't have before.
At the same time, it means that anyone who can keep convincing people to throw them a few bucks can persist for perpetuity, regardless of their impact, or lack thereof. The congestion is about the ease of continuing to be a bad organization.
(Photo: Hamed Saber)
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Comments (3)
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Nathaniel is the founder of Assetmap, a San Francisco-based startup that builds web tools to help people better visualize and leverage their social capital. Before that, he was the founding director of the Northwestern University Center for Global Engagement.
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If I can push back on your assumption for a moment, why do we need more good nonprofits and why do we need fewer bad ones? It seems that the primary goal is to create more impact in sum. However, it does not seem obvious to me that more nonprofit organizations are required to do that. Nor is it clear that the existing poor organizations present an obstacle to increasing impact. (Though one could argue that they serve as a diversion of funding that could be used more impactfully elsewhere)
I think the underlying logic of the statement "don't start another nonprofit" is that the good nonprofits which already exist need more support. It's not necessarily that starting another nonprofit is a bad thing, per se', but rather that it is unncessary to do so if the goal is increasing the sum amount of impact being created.
The argument goes that we don't lack for organizations trying to solve social issues. We lack clarity around which ones are the good ones and which aren't. Adding another organization to the mix just adds to the inefficiency of the system. The fixed costs of running an organization are multiplied. The creative thinking and research gets done in parallel by many organizations when it only needs to happen once. We spread thin our resources.
That's not to say you shouldn't start a new organization. But I think it's a fair suggestion to say "consider how your time and your investors money can be used most impactfully." If you truly need to create a new organization to do it, by all means. But also consider the benefits of bringing your time, energy, creativity, and the funding those things can attract to an established organization that is already headed in the right direction.
Posted by Rick Groves on 11/24/2009 @ 02:29PM PT
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If nonprofits are about addressing complex social and environmental problems in the world (and not just about individual founder goals of self-fulfillment) the very notion of the stand-alone organization may be out of date. In order to make real changes - organizations will need to work together, collaborate and find new models of structure and governance.
People often incorporate new charities/501c3s because it's the only path forward to receive funding. Perhaps entirely new ways of thinking about organizations need to be developed. I sometimes think that 20 or 30 years from now people will look back at the notion of a nonprofit organization (incorporated, with a Board, a CEO, a name, a brand) as an anachronism from the 20th century.
And a quick point about competition. The reality of most nonprofits is that they receive money from government or foundations - and 'competition' has often been more about relationships with these funders rather than making real changes in the community.
Posted by Doug Kerr on 11/24/2009 @ 08:29PM PT
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The attitude and esteem we hold for the Charitable Organizations may change because of the proliferation of people wanting to do good. But Why not have self employment and small business counterpoints. The Bailout of Wall Street has soured my desire to participate in Capitalism. The profit motive does not motivate . Excuses and cover ups for greed . Doing good and making a living dont require setting a homeowner up for fleecing or requiring a certain return on investment. Might never get rich but the odds of that happening arent in most of our futures anyway. Whining aside, I believe the expansion of Non profits is good for Human Rights eventualy if not sooner.
Posted by Keith Bender on 11/27/2009 @ 03:51AM PT
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