A recent edition of the Chronicle’s online Philanthropy Today got me scratching my head.

One piece, Mass Charities Urged to Merge and Pool Resources, reported that the Boston Foundation was urging the 36,000 nonprofits in Massachusetts to consider either merging or at least sharing resources with their like-minded compatriots. Their message … too many groups for too few — indeed, dwindling — resources. The number of nonprofits in Mass has almost doubled in recent years.

Another piece, Aid Groups Urged to Revamp Operations in Poor Countries, indicated that with tens of thousands of "unregulated" aid groups operating in the health field, they’ve become difficult for health officials in those countries to manage and deal with effectively. Each charity "does its own thing" and ometimes the charities even compete with local health authorities by hiring away the indigenous health professionals who are in short supply.

So, is the message here that there can be too much of a good thing?

Are all these groups, be they in Massachusetts or the developing world, equally competent and deserving? That of course would fly in the face of all human experience. Are some redundant to others? Of course. Are some mere ego trips for their leaders? Bingo again.

The problem is, there no "market" (or an extremely inefficient one at best) for weeding out the under-performers. Regular Agitator readers can probably detect me becoming more and more agitated on this point.

Note that I’m not pushing the "all nonprofits should be more business-like" line.

What I am pushing is "perform or die" … and figure out a way — your way — to establish that your nonprofit actually is performing … performing in the sense of achieving substantive goals, not just processing stuff.

Maybe there should be a "sunset" provision of some kind on IRS charitable status.

Here’s a crude approach that will doubtless offend many readers … you lose your charitable status if you can’t demonstrate at the end of every five years that you have more resources than at the beginning of the period. Sure, there are groups that might be clever enough to be raising more money even though they aren’t accomplishing much. But, heck, if their donors are too incapable of demanding to see and assess the case, well I guess they’re getting what they paid for, aren’t they?! Who else is supposed to make that judgment? And for those groups that are raising less, the "market" has spoken … it’s time to exit the playing field gracefully.

Of course I believe any sunset rule, formal or informal, should be more intelligently grounded. Maybe the guys at Give Well blog can come up with something.

But meantime, I just can’t believe Massachusetts or Africa would be worse off if half as many nonprofits (or even fewer) were expending the same level of resources in each region as today’s number of groups are. I think scale matters … a lot.

Would I shut the door on new charities? No. Especially if they succeed at putting old ones out of business!

As reported by the NY Times a few weeks ago, new group like Nothing But Nets springs from the pages of Sports Illustrated. A new movement is galvanized that in barely two years has bought and distributed 2,029,286 malaria-fighting nets, presumably representing over $20 million in contributions … introducing all sorts of new people, especially young people, to giving and social action, and forging powerful alliances with marketing machines like the NBA. Spectacular!

Have they forced an under-performer off the playing field. I don’t know. But I submit that if they did, it would be an added bonus!

Tom

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