Do We Need a Tear Down and Rebuild Attitude Toward Some Nonprofit Business Models?

August 1, 2011; Source: Inside Philanthropy | In the wake of an economic and political meltdown that has reshaped long-term resource availability for nonprofits, the sector needs to abandon the “creaky frame” of a century-old charitable business model; not tweak or retool, but abandon and fundamentally reinvent. That’s according to Todd Cohen, editor and publisher of Philanthropy Journal.

While Cohen doesn’t specifically define what that “creaky frame” is, he references large-scale charitable foundations developed in the age of Carnegie, Ford, and Rockefeller. Over time, both foundations and government have become enmeshed in the work of nonprofits. They’ve been viewed as steady, if shifting, sources of sustainable funding for nonprofit work. Furthermore, both have served as vehicles for attracting investment beyond what’s available from a nonprofit’s own community of place and interest. In such a universe, talk about charismatic leadership, growth in scale, and ability to be novel and to anticipate change has been highly valued, or even, Cohen notes, overvalued.

Cohen argues for a wholesale shift in focus, back to one’s own community of place and interest. This is because outside resources are simply not going to be there—in ways we’ve become accustomed to—for a very long time. He stresses the need for focusing on building a strong “culture of philanthropy,” which means far more than a culture of charitable donations. A culture of philanthropy means that all of the organization’s stakeholders share a personal, committed desire to promote the welfare of others, and that they authentically connect this desire with the nonprofit’s work. It means engaging with these stakeholders not only as supporters but also as advisors to improve programs and operations. In this universe, self-knowledge, an ability to build a rich web of supportive and advisory relationships among those who truly know our communities, and an openness to hear and act upon opportunities to improve, are paramount.

The French philosopher Voltaire famously advised that one must cultivate one’s own garden.  According to Cohen, this advice is still well-grounded.—Kathi Jaworski