In looking at stats on the total
non profit sector in the US from 2012, we can see that the vast majority of
revenue that is recorded with the IRS comes from 501(c)(3) accounts. Looking at
merely this stat, one could make a number of assumptions about the sector that
could take us in a number of directions. You could think that since most
accounts (almost three quarters) in the sector do qualify for this, that there
must be a huge presence of nonprofit organizations in the nation. These numbers
however, are the result of a ten-year spike in the industry.
According
to a PNP Staffing report, there are currently 1.5 million tax exempt
organizations in the US but this is twenty percent higher than the number ten
years prior. For comparison, over the same ten-year span, the for-profit sector
has increased about three percent. The CEO of TSNE MissionWorks, Jonathan
Spack, published an article in 2016, which I will post at the bottom, where he
shared his belief that there are now too many philanthropic organizations in
the United States.
In
his article, Spack argues that the copious philanthropic organizations are not
only resulting in inefficiencies, but also in less effective work overall. He
says resources are being spread too thin and argues that leaders of these
organizations are being pressed with new difficulties arising due to the spike
in organizations. My question regarding all this is how do we know as
philanthropists if our money, even in just Broome County, is going to an
organization that does not have to act inefficiently with money because another
organization is trying to solve the same problem? Should we focus on an issue
that is being handled by solely a local organization or would it be wise to
what issues national organizations believe this county needs help with? I would
like to know that we are putting the $10,000 towards an organization that will
be working more with the people of Broome County in need of help more than
another organization with whom there may be a mutual philanthropic beneficiary.
http://tsne.org/blog/are-there-too-many-nonprofits
Hey Ben,
ReplyDeleteI think that those are some valid points you make in your post. It never occurred to me that too many nonprofits would in a sense make the problem worse. But after reading your post and then a couple articles related to this idea it seems like this is actually a huge problem. “That's because each nonprofit needs a certain level of organizational capacity to get anywhere—starting with an executive director and including staff to handle administration, finance, communications and development. Oh, and don't forget office space, legal fees, insurance, subscription services, IT systems, and so on.” So not only are there tremendous costs for each of these individual nonprofits to start up, there is also many within the same sphere competing. “Many reach a level where they're able to do some good work and sustain operations, but never develop the capacity to break out. The nonprofit sector has too many small organizations that are just getting by, and too few big ones that can really solve problems.” To me it seems there needs to be a consolidation of organizations. That way they can pool money and resources and start making these big impacts. Otherwise there is just going to be all these nonprofits that are nice in theory but are just hemorrhaging money and making very little change. To try and address your question I think we should try and aim our resources to an organization that works directly in Broome community but has ties to a larger corporation. I personally feel this will allow more of our money to go towards resources then to frictional organizational activities such as mentioned above. So instead of spending 10% percent of the money on these activities maybe only 5% goes to it meaning there is an extra 5% that is “invested” in the organization. And over years this benefit will only expatiate as you take time as a factor.
Thanks For the interesting Opinion
Jacob Croes
https://www.insidephilanthropy.com/home/2015/1/14/there-are-way-too-many-nonprofits-what-are-funders-going-to.html
Ben, I do think it is possible for some organizations to be consolidated, or at the very least collaborate and use collective impact to make a change (like what we learned from January 23rd’s reading). Like the column you attached says, reducing the amount of nonprofits means the efforts of those remaining would need to be “redoubled” to fill the gaps - which is not an impossible task. I do not think however that so many nonprofits is detrimental to the mission of helping people, either. The TNSE article states that the increasing gap between the rich and the poor grows the amount of needs that must be met. The ‘surplus’ charities fulfill these needs . The article attached a link to a Boston Globe piece that suggested there were too many nonprofits in Boston. In it, Joanna Jacobson, the wife of a hedge fund manager, says when it comes to the organization’s philanthropic efforts, “We never bring something unless it’s wanted. That would be pointless for everybody” (bostonglobe.com). This led me to think that if there is a need in a community not being met, then why not start a new charity to help meet this need? If it was being met by another organization, then there would be no reason for a new charity to be started.
ReplyDeleteJanuary 23rd’s Collective Impact reading
https://ssir.org/articles/entry/collective_impact
Boston Globe Article
http://www.bostonglobe.com/business/2016/07/04/does-boston-have-too-many-nonprofits-some-say-yes/XMnV259wjXdugZqrOl3CvI/story.html