Too Many Nonprofits? Or Too Many Silly Questions?


July 4, 2016; Boston Globe

“Does Boston have too many nonprofits?” The question is by no means new or unique, but it is persistent. In the context of the new lower threshold afforded by the 1023-EZ, which expedites applications for federal tax-exempt recognition, however, the question may sometime soon have additional relevance. Word is that the approval ratings of those IRS applications are very high. But that is not the focus of this article—which is pretty old school, judging from this detailed exchange published in NPQ a decade ago. 

The primary concern behind the question, at least in relationship to this article, is that there’s not enough money for everyone. And indeed, the article from the estimable Sacha Pfeiffer does a good and balanced job of detailing one situation where the question is emerging in response to the rise of a new organization in a field with a limited sphere of funders. The nonprofits raising the question were also in that field, but they were unwilling to be named because they did not want to raise the hackles of a major local funder.

The funder, however, feels the new group serves a different population, one often neglected by others in the field, and she is not the only major local funder who has supported the group. It was also supported by the Boston Foundation, whose president, Paul Grogan, has been quoted as saying, “You don’t want to stop innovation in the social sector, but even the most successful nonprofits have a big problem raising money…so we think there should be more mergers and collaborations.” Now, there’s a pat answer for you.

Larger organizations can get stuck in perpetuating and supporting their own models, and sometimes the time just comes for something new. Maybe the competition keeps things circulating. It’s messy. It’s democracy. It’s how we keep things vital and community-driven.

Besides, this situation is simply one example of what new nonprofits get formed to do—as expressions of active democracy, many new nonprofits are very small and funded by those involved.

If our concern is about the availability of funding for quality services, we might do better to ask, “Are there too many large nonprofits keeping unreasonable amounts of donated money in reserves?” The crowding-out of small nonprofits by the massive fundraising of larger entities is, in fact, a real concern in some regions. Or “Why can’t I manage to have a reasonable dialogue with my major funder?” Or perhaps our questioning might focus on, in the midst of campaign season, “Are there too many ‘dark money’ nonprofits?” or “Should we stop worrying about real nonprofits proliferating and focus instead on the effects of for-profits in fields like long-term care and charter schools?” In short, the frame of this question is a distraction from the real complexities of our work.— Ruth McCambridge and Kevin Johnson

  • simonejoyaux

    But Ruth…. It’s just so easy to ask the really easy question: “Do we have too many NGOs!” I’m tired of the easy questions. Let’s go with the really real and true and meaningful questions …. And some cage-rattling ones. Thanks, as always!

  • Fred T.

    I have found that often people start a Not for Profit for the wrong reason. Often frustration with an existing NFP, ego, or possibly they don’t feel that the existing NFP’s are wiling to modify their mission and constituents. Another challenge are NFP’s that seem to be in the business of “Self perpetuating”. I believe that ALL organizations that have a tax exempt not for profit status should be more transparent and open. They should post on their website (and other media) their time and dates or board meetings, agenda, approved board minutes, and their quarterly financials. How often have you attended a fundraiser, and NEVER were able to find out how much was raised, cost of event planners, etc.? This information can help provide greater insight into the leadership of an organization, how well they are serving their constituents, and generally are they really serving the mission and board effectivness.

  • Cj Anderson

    Of course we do not have too many NGOS. What the problem is, is that the NGOs are put together with founders who do not KNOW how to run Non profits as a business. They all have a heart space for the non profits focus (in my case animals). They dont like playing by the rules of (business, other organzaitions or regulations or staff) , they cut important corners – (wanna bet how many have insurance)… I can tell you that in the Valley of the Sun, the almost 50o animal non-profits do NOT have safety in place per OSHA standards (yes volunteers DO count as employees – 1910.2) for instance. Many times, they dont have a clue about fundraising so they tap out friends, family, themselves, they try to guilt out people on facebook in that order. Many do not have a clue how to run a volunteer program so they burnout/ turn off everyone but best friends. Because the founders only care about program delivery and or care for the animals, and dont take care of the business of non-profit. Just LOOK at how many are shut down for nt filing paperwork with the IRS or just quit after a few years!!! I would love to see an article or two on that!