What's up with the nonprofit sector?

 Despite enormous growth in the past decades, there seems to some sort of prevailing opinion that there are serious shortcomings in the social sector.  All in all, nonprofits are getting a great deal of intense scrutiny.

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.

Hopefully the attention will result in strengthening the social sector while avoiding the danger of throwing out the baby with the bath water.  In order to do that, we need to take care and not be carried away with the excessive excitement around social entrepreneurship, as promising as it is proving to be.  Instead we can take advantage of the opportunity for improvement by focusing on those practices that build on the strengths of the sector to restructure and reform where needed.

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.