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.