Big Challenges in Nonprofit Growth

The charitable marketplace keeps growing, putting even greater pressure on nonprofits and their supporters to run smart, lean, responsible operations.

Nonprofits employ more people, generate more revenue, and contribute more to the U.S. economy, says the just-released Nonprofit Almanac 2008.

But growth alone does not ensure that nonprofits are making the best use of their resources.

Sadly, the charitable marketplace is saddled with fat and inefficiency.

Fueled by a sense of entitlement and righteousness, far too many nonprofits focus more on perpetuating their own organizations than on improving the way they do business or deliver services.

And while their services often overlap, far too few nonprofits are willing to truly consider, let alone pursue, consolidating their operations or even merging their organizations.

Having cultivated their own donors, volunteers and customers, nonprofits invest more time in defending and expanding their turf than in looking for the best way to put common community resources to work to address common community problems.

Nonprofits do not bear sole blame for the sloppy and self-absorbed way many of them operate.

Lacking the will or courage to ask tough questions or to encourage collaboration, foundations and other supporters are the enablers of nonprofits’ waste and turf-driven mindset.

By continuing to invest in nonprofits without challenging them to be more efficient, open and collaborative, foundations and other supporters simply perpetuate the feudal fiefdoms that divide and weaken the charitable marketplace.

To address the symptoms and causes of the urgent social problems we face, the charitable marketplace needs to do a lot better.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C.

Read more stories by Todd Cohen.