What is it that accounts for this perspective? Nonprofits have enormous advantages - they benefit from a highly motivated workforce, a history of service to their respective communities or constituencies, and sometimes people just give them money! On the other hand, the nonprofit sector has been dogged by controversies and even some scandals and these have had a lingering effect. Accordingly, there have been persistent questions and concerns about nonprofit accountability.
At the same time, the allure of market based social entrepreneurs has drawn so much attention that nonprofits seem to be dull and dated in comparison. The idea that the power of business can be harnessed to address intractable social problems is very attractive. In sharp contrast to the love affair with for profit and/or hybrid social benefit enterprises, the social innovation movement, gathering steam daily, is hardly interested in nonprofits. Market based approaches just seem more compelling - more capable of creating change than their tedious nonprofit counterparts.
In reality, the social sector is very diverse. There are enough good, efficient, impactful nonprofits to justify the public's ongoing support and trust and enough poorly run, even unscrupulous nonprofits to validate all the anxiety and alarm.
In the final analysis, the current concern about the nonprofit sector is a concern about effectiveness. Now more than ever, nonprofits need to focus on results. Organizations must be able to demonstrate to clients, stakeholders, donors, and funders how they are going to improve their performance.
Al - great points. It makes no more sense to speak uniformly about nonprofits as it does for profits. I'd like the SE/SI lovefest to include an honest discussion about social problems that are less amenable to market based approaches (like helping chronically homeless people with severe and persistent mental illness and substance abuse problems) and to juxtapose the SE/SI perspective with a human rights one (as Paul Farmer says, governments, not markets, confer basic human rights).
ReplyDeleteAl, I agree that donors and other stakeholders should be primarily concerned with effectiveness of organizations they support. One challenge is that it is notoriously hard to determine and compare the effectiveness of various organizations. However, it's easier to identify new and promising approaches to social problems, such as market-driven models. That might be one reason why new, innovative organizations sometimes get so much attention, even though many existing nonprofits continue to effectively address needs in our communities.
ReplyDeleteThanks Mat,
ReplyDeleteI agree, the social innovation discussion seems to discount the huge role of the government/public sector in not only conferring but also in addressing human rights as they relate to human needs. I think one of the predominate innovations in this area, at least in the US, has been to develop networks of private providers of public services under contract to government agencies. Public mental health services in NC have undergone a massive transformation, much of that has involved a transition to more of a market based approach to provision of care. Some the effort has resulted in beneficial innovation and some of it has resulted in malignant mutation that amply demonstrates the risks inherent in over reliance on the market.
Agnes,
ReplyDeleteThanks for the post - you make a good point. I agree, is very difficult to capture impact but I think its even harder to compare impact across various organizations. My point of view is that is devilishly difficult because it requires the use of an ethical framework. I believe that is one reason market based approach are intriguing - they put the ethical judgments in the hands of the market. In addition, the market relies on straightforward units of measurement. By aggregating measures of appeal in economic terms, support of time and/or money, the market supplies an easily tabulated indicator of success.
I want you all to know that Al is a real pro in the field of non-profit mgt. I recommend you learn all you can from him.
ReplyDeleteBill Murray, www.eaglealliance.com