"Are There Too Many Nonprofits?" Is The Wrong Question

Being a young person involved with social change efforts, one of the most common things you hear is some variation of "don't start another nonprofit," or "the last thing the world needs is another nonprofit." I think it's a sentiment that, while sometimes coming from a good place, tends to be one of the least thoughtful conversations we have. What we need to be talking about is how to get more good nonprofits, and fewer bad ones.

Over at Philanthropy 2173 , Lucy Bernholz has started an interesting conversation about the IRS approval process of nonprofit status. As usual, her background and perspective is smart and right on. I particularly love her line that the conversation is "so divisive that you don't want to talk about it with certain relatives at holiday meals." Depending on where you stand, I'm totally one of those relatives.

All that said, where she takes the conversation is actually about the IRS approval process of nonprofits, which I think is an interesting conversation. She wonders if there is some room for a peer review mechanism that could help identify quality and winnow the number of nonprofits. I tend to be skeptical of cutting things off at the stem, but it's still an interesting conversation.

For me though, this whole question is a farce. There is simply no way to determine what the "right" number of nonprofits are, just like it becomes a religious conversations when you want to talk about how to prioritize which issues to address. The idea of civil society is that there are a sector of organizations that exist for the public benefit to ensure that the benefits of society are extended to the greatest number of people.

It seems clear to me that, given the challenges we face, the common sense starting point is that we need:

• more good nonprofits
• less bad nonprofits

Right?

In terms of more good nonprofits, there is a huge amount of activity in this area. Undergraduate and graduate programs dedicated to learning from people actually experiencing the problems we're seeking to address, and coupling that with management, fundraising, and administration are a great start. Groups like GiveWell and Mission Measurement are trying to make it easier for people to understand what makes groups good, how their organizations can get better, and how their dollars can best be spent.

The bigger challenge in a lot of ways is less bad nonprofits. The reason I don't but the "don't start a nonprofit" logic is that in my estimation, the only way to eliminate older, bad nonprofits is to be a game changing organization that does a better job, communicates more effectively, and crowds out the resources for those other organizations. This isn't pretty, but it may be the best answer we have. The point is, yes: embracing competition.

The beauty and curse of the nonprofit world is that any one with a passion for making a difference today can build something, hop online and use a whole new world of tools to get their family and friends supporting them. That's awesome, and gives creative ideas (or, small, localized ideas) room to grow where they simply wouldn't have before.

At the same time, it means that anyone who can keep convincing people to throw them a few bucks can persist for perpetuity, regardless of their impact, or lack thereof. The congestion is about the ease of continuing to be a bad organization.

(Photo: Hamed Saber)