New nonprofits can be good for the sector.

Posted on March 16, 2008. Filed under: Nonprofit |

If you have read my blog before you know I think it’s important for nonprofit organizations to collaborate, and I feel the nonprofit sector may be becoming too flooded with nonprofits and I urge anyone that wants to start a new nonprofit to do their research. This is why I was surprised to hear one of my favorite bloggers declare, “We need new nonprofits to revitalize and grow the sector.”

Her article on Nonprofit Leadership 601 titled Reasons why you should start a nonprofit, goes on to say:

“Many of the new nonprofits starting up today will put other ineffective nonprofits out of business. These new nonprofits will come up with new and innovative ideas to solve old problems and they will do it in a more cost effective way while paying their employees a decent wage. Sector switching boomers and the younger generations are starting their own nonprofits. We don’t tell people they shouldn’t start small businesses so we certainly shouldn’t say don’t start a new nonprofit especially if the person who is starting the nonprofit will do a better job at running their nonprofit than the majority of nonprofits that are already out there.”

To be honest I think she makes some good points. We need innovation and entrepreneurship to reshape the nonprofit sector, but for some reason I’m still not completely convinced people should be starting new nonprofits to achieve this goal.  I am skeptical to believe that everyone starting a new nonprofit will bring innovation and those are the new nonprofits I am most scared of for the sector.  Recreating the wheel over and over will only dilute resources, but does this mean there is room for new innovative nonprofits instead of innovating the old ones?

Based on the traditional structure of the United State’s nonprofit sector, it doesn’t seem equipped for competition. I continually use the example of the public education system and how much it has been struggling due to increased competition between all schools in the country, many of which survive under very different circumstances. Competition is not helping here. But maybe it could for other small nonprofits. When I consider the factors of donations, etc I am still not convinced, a small business starting up has the opportunity to sell product based on their own criteria or that may take a lot of convincing to be funded, but new nonprofits have to sell a service, one that may already be served by another nonprofit, doesn’t this dilute the resources?

I don’t think the traditional model of business competition is right for the sector. What do you all think? Could it be good?

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4 Responses to “New nonprofits can be good for the sector.”

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I too question if well intended individuals with honest and altruistic motivation are entitled to enter the chsrity sphere. But, I believe that many nonprofits have long ago run their course and they are so organizationally focused that change is impossible. In Canada, starting a charity isn’t a right and we must meet very stringent criteria (established in Elizabethan times). This doesn’t change the fact that charities large and small are now managing issues (because it serves their programs and budgets) rather than seeking solutions.
I have seen new nonprofits with a frsh solution focused approach resonate with donors and stakeholders because many are now looking for impacts from their investments and examining the damaging side effects of conventional programs (like shelters and soup kitchens)

I am leaning towards hybrid organizations that earn substantial revenue from social enterprise and take new value-added approaches to old problems.

I like your idea of hybrid organizations. Do you see these as business run, or run more as a nonprofit with a social enterprise arm? Business run social service scares me a little.

Great points, thanks for quoting me.

I definitely don’t think it is an all or nothing thing. I think there should be some new thought out start ups in the sector. I am always surprised the number of people who take my, “How to start a Nonprofit Seminar” who haven’t done their homework and don’t know what the need is for their organization–they have a ways to go before they are ready to start any organization.

We have a similar program at my org for start ups and it continues to surprise me too. I feel like there has to be a movement around education of running an org in the nonprofit sector. There is more risk than people realize.


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