Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

May 19, 2008

Big challenges in nonprofit growth

The charitable marketplace keeps growing, putting even greater pressure on nonprofits and their supporters to run smart, lean, responsible operations.

Nonprofits employ more people, generate more revenue and contribute more to the U.S. economy, says the just-released Nonprofit Almanac 2008.

But growth alone does not ensure that nonprofits are making the best use of their resources.

Sadly, the charitable marketplace is saddled with fat and inefficiency.

Fueled by a sense of entitlement and righteousness, far too many nonprofits focus more on perpetuating their own organizations than on improving the way they do business or deliver services.

And while their services often overlap, far too few nonprofits are willing to truly consider, let alone pursue, consolidating their operations or even merging their organizations.

Having cultivated their own donors, volunteers and customers, nonprofits invest more time in defending and expanding their turf than in looking for the best way to put common community resources to work to address common community problems.

Nonprofits do not bear sole blame for the sloppy and self-absorbed way many of them operate.

Lacking the will or courage to ask tough questions or to encourage collaboration, foundations and other supporters are the enablers of nonprofits' waste and turf-driven mindset.

By continuing to invest in nonprofits without challenging them to be more efficient, open and collaborative, foundations and other supporters simply perpetuate the feudal fiefdoms that divide and weaken the charitable marketplace.

To address the symptoms and causes of the urgent social problems we face, the charitable marketplace needs to do a lot better.

4 Comments:

  • At 5:29 PM, Anonymous Matt said…

    The non-profit world is changing. I think that you are going to see non-profits become "for-profits" so that they can raise money through actual profits that are given back to some donors as well as have a humanitarian impact.

     
  • At 4:16 PM, Anonymous Devon said…

    "And while their services often overlap, far too few nonprofits are willing to truly consider, let alone pursue, consolidating their operations or even merging their organizations."

    I'm not sure that there is an intrinsic problem here. To be sure, there are instances when consolidation will lead to improved outcomes. But I'd venture to guess that most of the problems that nonprofits address do not admit of a single best solution, and to some extent, a system of distinct organizations offering overlapping services provides better opportunities to examine and refine the work that nonprofits do. I'll freely admit that this does not always, or perhaps even often, happen. But a nonprofit sector that moves in a more monopolistic direction, with mergers creating larger institutions that increasingly dominate the provision of specific services in their area, strikes me as one that will be less able to develop innovative approaches to the problems these nonprofits address.

     
  • At 9:54 AM, Blogger Paul Botts said…

    "a nonprofit sector that moves in a more monopolistic direction, with mergers creating larger institutions that increasingly dominate the provision of specific services in their area, strikes me as one that will be less able to develop innovative approaches to the problems these nonprofits address."

    Bingo! This endless collective whine about there being "too many nonprofits" is just baffling to me. If "the charitable marketplace is saddled with fat and inefficiency" (as a lifer in the sector I must sadly agree), and if "Fueled by a sense of entitlement and righteousness, far too many nonprofits focus more on perpetuating their own organizations than on improving the way they do business or deliver services" (must agree again strongly), then for heaven's sake why would we want the sector to become _less_ dynamic? _less_ subject to having minds focused and habits challenged by the presence of others willing to try new ways of achieving our missions? Sounds to me like a recipe for the sector to become sclerotic and just evolve into another layer of government. Why would this or any other society want that?

     
  • At 12:18 PM, Anonymous Anonymous said…

    It has been my experience, based on more than 35 years in the industry that the problem is multifaceted but I place blame on the lack of a talent pool at the DE/CEO level.I have been witness to far too many "leaders" who lack creativity, insight and a collaborative spirit and lack even the basic concepts of understanding that as a business we must employ actual best practice concepts. My organization has tripled in size and increased its fund balance 7 fold in the last 10 years and we have done it through creativity, passion and solid strategic planning, communication and management tools.

     

Post a Comment

Links to this post:

Create a Link

<< Home