Sprouting like flowers in the Spring

In my last post I considered the issue of too many nonprofits.  A few days later when I was having coffee with Mary Tschirhart, Director the Institute for Nonprofits at NCSU, she made a similar observation (without prompting from me).  It gave me an opportunity to discuss the issue with a real expert and flesh it out a little more  

When I pressed Mary about what she meant when she said that she thought there were too many nonprofits, this is what she had to say (to the best of my recollection).  People often start organizations (what I’d call “kitchen table” nonprofits) without doing sufficient homework to see if there are other organizations that already do the kind of work and serve the kind of folks that they are interested in.  As often as not they duplicate, or nearly duplicate, something that is already being done or could possibly be done.  Basically they are spreading out any resources they can bring to addressing the issue they are interested in when they could be contributing to an organization that already exists.  They start competing with these existing organizations for scare philanthropic resources, money, volunteer time, connections, etc., when they could be helping them.

I think these are good points but they basically have to do with what I’d call allocative efficiency - there are limited volunteer hours and limited charitable dollars and too much of both are taken up with competing, supporting redundancy, traveling up the learning curve and so forth.  

But I’d argue that most of these startups are really an expression of adaptive capacity, the ability to try out and evaluate new ideas and to respond to changing conditions.  People who might not feel welcome at an established organization can explore the freedom to grapple with new approaches and express their passion for solving the problem they care about (in my experience introducing new ideas and energy can be seen as rocking the boat and if not coupled with ample resources, there is likely to be pressure to integrate into the existing organization).  New organizations can foster innovation and facilitate energetic engagement; they can attract new volunteers and generate a different kind of funding.  All this can actually increase the energy and resources available to the sector.  

I’ve worked with a fair number of kitchen table nonprofits and I think the best question that folks thinking about starting a nonprofit can ask themselves is this - is this the most effective way to create the change we seek?  But I’d also say that this question is one that established organizations should be asking.

Too Many Nonprofits - Or Not Enough Really Good Ones?

A couple of years ago I was at a meeting with a group of folks called together to consider the potential of a capacity building effort. In response to a comment I can't remember, one person remarked that he thought that there were too many nonprofits in Durham.  I wish I had a witty comeback because I thought the statement made no sense.  Since then I've thought about this issue many times.

Just now I googled the phrase "too many nonprofits" and got at least 3 pages of results!  All these were right on topic - considerations and opinions on both sides of this question.When I saw that I had to wondered why this has become such a commonly considered issue. 

The barrier to entry into the nonprofit world is pretty low so they have proliferated over the last several years. On one hand, for most nonprofits direct market forces aren't really a factor, as they are in the private sector, nor is the rise and fall of policy agendas, like in the public sector.   On the other hand, so what - why is this a problem and for whom?

The guy who made the comment that sent my head spinning works for an organization that is not a foundation exactly but basically a funder.  I can see how it could appear as if there were a crowd of nonprofits with their hands out if you were holding some purse strings.

I think if you're not working with a foundation, then you might approach it from another direction. What can be done to encourage more good nonprofits and fewer bad ones?  While most people would agree that more good and fewer bad nonprofits would be a great thing, I think that it still raises wrong question (and who decides if a nonprofit is bad anyway). 

Basically, the number of organizations is irrelevant.  What matters is impact - the ability to deliver consistent, mission-related outcomes.  I'd say we need to be doing everything in our power to support and strengthen the nonprofit sector's ability to get results.