Too many nonprofits?

moneyHmm. Just came across this New York Times article, “Grab Bag of Charities Grows, Along with U.S. Tax Breaks.” The angle is that “Experts say nonprofits are skillfully exploiting the tax code’s broad and elastic definition of what constitutes such a charity…The $300 billion donated to charities last year cost the federal government more than $50 billion in lost tax revenue.”

I hadn’t before heard that kind of spin on nonprofit sector work, almost as if it’s detrimental to the economy (or am I taking the story too personally??). I’ll admit that I’m one of the folks who has occasionally wondered aloud if there are too many nonprofits – mostly small, local niche operations – for the sector to sustain them all. The flip side of the tremendous demand (last year we received an average of three inquiries/requests for every one grant made) and the “unusual” groups highlighted by the article (although doesn’t everybody know about the Sisters?)  is that people are taking the initiative to address areas of need. Seems rather like a red-blooded American truism: have a reasonably good idea to improve any particular plight? Roll up your sleeves, call your neighbors, and start a nonprofit. In other words, take action.

This article makes for an interesting discussion on the pros and cons of nonprofit entrepreneurialism. Please, discuss among yourselves. 🙂

Comments 1

  1. Cedric-

    The topic is indeed something which I think should vigorously discussed. I have started a conversation with our grantees about “strategic restructuring,” ways in which organizations forrmally partner whether its establishing parent corporations, management service organizations, or mergers.

    Our foundation offered grantees a workshop just to make information on the topic accessible. We were surprised at the number of organizations interested in learning more on the topic. We believe there is significant interest (not withstanding those who feel obliged to participate in donor-sponsored activities). It has been a humbling experience as I better understand the fragility some community-based organizations. We continue to engage grantees on the subject and may need to contemplate whether and how we might respond.

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