Too many nonprofits? Let 85,000 flowers bloom!
The Charity Governance blog points out that in fiscal year 2007, the IRS received 85,771 applications for 501(c)(3) status: Do we need 85,000 new charities? Somebody thinks so.
(Only 68,000 of those made it through the process to become IRS-recognized nonprofit organizations. Glad the gatekeepers are so rigorous!)
It's not hard to throw up your hands and cry Enough already! We have too many nonprofits!
The down-side of there being so many nonprofits is easy to understand. It means:
- Inefficiency.
- Duplication of effort.
- Lower level of professionalism.
- Marketplace confusion.
On the other hand some of these new nonprofits are tiny, serving extremely narrow or localized niche issues that no one else is dealing with.
Others are smart, fast innovation factories that are unfettered by bureaucracy and limited thinking. These are the organization that will quickly be competing for donor dollars with established nonprofits -- the organizations that will force us all to be smarter.
So I say to those tends of thousands of new nonprofits: Welcome to the profession. I hope you're worth it!
What a great point! I work at Grassroots.org and I have a constant influx of newly formed, or trying to form, non-profits looking for help. They are all GREAT and have wonderful ideas. I couldn't support them more in my heart. However, sometimes the inefficiency really bothers me too.
My number one piece of advice to anyone starting a nonprofit right now--FIND A FISCAL SPONSOR! It is not that hard to find an organization with a similar mission to you, only larger and growing. Perfect. They can take you on as a "project" and you get automatic 501c3 status and credibility under them but you can still do what you set out to. Please Google Fiscal Sponsorship for non-profits. You will learn a lot. Thanks for reading!
Posted by: Sura Hart | 03 April 2008 at 06:53
Fiscal sponsorship has its downsides though, such as lack of control of your destiny and that some donors and foundations will wonder whether an idea which can't find its own basic support is really that important an idea. Fiscal sponsorship is a tradeoff.
I wholly agree with the original post, if anything even moreso. Some say "duplication of effort" and "marketplace confusion", I say "healthy competition that makes our sector better." I'm a foundation staffer nowadays though and the overwhelming conventional wisdom among foundation folks right now is the "too many!" complaint. In large part that simply reflects the fact that foundation staffs and board members really wish they didn't have to actually say no to well-meaning grant applicants. But in wishing there was just one non-profit of a given type in a given place we are missing the forest for the trees.
And factually the idea that more non-profits means lower levels of professionaliam is actually wrong. Quite the contrary, the enormous dynamism of this sector right now is a major factor in why we're doing so much better in attracting smart young professionals to try to make a career in it. And of course the more the better for the same reasons I just listed about organizations.
Posted by: Paul Botts | 03 April 2008 at 11:15
I want to help a friend to start his nonprofit organization. It is aimed at getting gang-members off the streets and into programs that teach respect, job training, jobs and education such as acquiring G.E.D. and entering trade schools.
My question is, are there nonprofit organizations that help pay the fees for preparation and filing? At this point he has paid $1500 but needs $545.00 more to file the completed 1023 application.
Can you help me find funding for him to file?
Thank you.
Posted by: LELAN | 10 April 2008 at 10:53