How many is enough?

Recently, I’ve felt a lot like I am watching a great tennis match, say one between Novak Djokovic and Rafael Nadal: he’s up, he’s down; he slammed it, he lobbed it.  Except the “he” is nonprofits and the up and down, slammed and lobbed are coming and going:  that nonprofit is closing its doors, this nonprofit is expanding to Philadelphia.  Unlike a tennis match, though, I’m not sure there are always winners.

On top of that, a few weeks ago, I got into a very public, and thankfully very short-lived, debate with a funder over the need for more nonprofits.  I am, as those of you who read this blog with any regularity know, a firm believer that we have enough nonprofits in this region.  (And, with few exceptions, I would say that is true of most geographic areas of this country.)  And yet, The Nonprofit Center is still regularly getting calls asking how to start a nonprofit, Google headlines still tell tales from across the country of newly-started nonprofits and people proudly tell me, when they find out what I do for a living, that they want to start a nonprofit as soon as they can.

What is going on? Is no one paying attention?  It is never easy sustaining a nonprofit, but these times are especially difficult.  And with uncertainty as to the end of this economic fiasco, the start of recovery for nonprofits is at least 12-18 months down the road.  Venerable nonprofits are closing their doors or barely keeping heads above water.  Mega nonprofits—the kind with many multiples of millions of dollar budgets—are closing doors.  The grande dames of different sections of the sector are disappearing.  And others want to open up?  Is everyone else chopped liver?  Do these folks have a magic potion?

I simply don’t get it!  Last week, I got an email from an organization well-established elsewhere in the country.  They are looking to expand and Philadelphia is on their radar; they want to talk about the Philadelphia landscape.  (This is the second such request in almost as many weeks.)  Kudos to them for doing some market scanning, if it isn’t full-blown market research.  But I’m baffled as to why they think they should come here as we already have a number of  programs that do what they do, one of which is chapter of a national organization and another a home-grown version created by some enterprising souls, and still then some more.  Upon receiving the email request—and agreeing to it—I contacted one of those enterprising souls and asked, “What do you think?”

The response I got was exactly what I had immediately thought when I read the original email:  how dare this organization think about encroaching?  We already have enough.  And giving them the benefit of the doubt, maybe that is the kind of response they will be receptive to hearing, and will then go seek to put down roots somewhere it is truly needed, where it will be new and of greater benefit.

My immediate thought—how dare they—was quickly replaced by a much more serious thought:  it wasn’t that they would be encroaching on service turf that bothered me; it was that they would be encroaching on funding turf that worried me.  Some of the “news” (in quotes because, truth be told, it isn’t really new) out of our grantmaker panel earlier this month is that a number of funders are still in recession mode, focusing on the life’s basic necessities or only supporting nonprofits of a certain size or focusing on their core funding priorities (which is what ever nonprofit should be doing—focusing on its core competencies).  And while individuals are still giving, we know we lost a quarter of individual donors last year (from 2009), and we know that most who are still giving are giving less.  So, all around, the monies just aren’t as plentiful as they used to be.

Do we need more competition for fewer dollars?  I’m thinking not.  I’m thinking let’s let those that have already existed and been doing the work, demonstrate their worthiness:  are they having the impact promised? are they running efficient and effective organizations? are their boards doing their share of the work? do they deserve funding?  Let’s give them the opportunity to flourish.  We don’t need to worry about the thinking that competition is good; it keeps everyone sharp and on his or her toes.  There is plenty of competition—tens of thousands of competition in the region alone, to be exact.  It is sufficient to separate the wheat from the chaff.

Which brings me to the chaff—those nonprofits that aren’t making it.  And these numbers are growing as the recession lingers, of all different shapes and sizes, as noted above.  And why aren’t they making it?  Did their mission lose its power or did the organization lose its way?  The latter.

I’ve yet to read or hear of an organization that is closing its doors whose mission isn’t still needed.  More often than not, when I read or hear these stories, I find it is the organization that was the source of its own demise.  During the good times, many got ahead of themselves, chasing dollars rather than chasing money.  When the good times turn to bad, funders want to fund the experts, not the watered-down-we-can-do-it-all organizations.  With the chasing of dollars comes the expansion of infrastructure to a point that core competency dollars alone can’t sustain.

Yet, during flush times too many nonprofits forget about the importance of diversified funding, preferring to take the easy money and forgetting to continue to nurture access to the difficult.  And during the good times, we let boards get away with murder—murdering their responsibilities as a board.  They aren’t holding organizations to strategic plans; they aren’t forecasting; they aren’t raising money; and the “they aren’t” list just goes on and on.  Correcting this takes time. And one thing there isn’t when the boat is sinking is time.

When this is all over, whenever that will be, will the sector be stronger, better?  I fear not.  The lessons simply aren’t being learned.