1.5 Million is Enough

Posted by Laura Otten, Ph.D., Director on March 6th, 2009 in Articles, Thoughts & Commentary

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Bad enough that I had to learn this morning of another nonprofit board that thinks it can do away with its executive director, thereby saving money, and just let board members run the organization.  (That was last week’s rant, I mean blog.)  Boards can’t do their own job!  What makes them think they can do fulfill both the management and governance functions at once and still do well by the organization? 

But now I have to see organizations and individuals all over the country holding workshops to teach people how to start a nonprofit.  NO!  Stop immediately!  

Even in the best of economic times there are too many nonprofits.  In the worst of economic times we should be teaching people how to merge their struggling nonprofits, how to close down their failing nonprofits.  Yes, during tough economic times need is greater for many of the services nonprofits provide.  But this is NOT reason to encourage people to start a new nonprofit. We have enough infrastructures established to meet demand; we just aren’t running the infrastructures as effectively and as efficiently as we should. 

For the first time in my many decades in the sector, we aren’t just hearing of nonprofits closing; we are hearing of nonprofits filing for Chapter 11 bankruptcy.  That suggests a large amount of debt accumulated over many years—not just since the economy took a huge turn for the worse.  That suggests a board and staff that think it can restructure that debt, reconfigure the organization and come out on the other side a stronger, more viable nonprofit.  But can it really?  It didn’t do anything during all of the years that it was accumulating the debt, so why should we think it is going to step up to the plate and do more, do better now?  Why not have the organization go straight to Chapter 7 and let viable nonprofits that have developed a proven path to financial sustainability—through good and tough times—take over their “territory?”  

There is a reason nonprofits fail, need to file for bankruptcy, need to merge.  Sometimes it is due to poor governance and/or management; sometimes it is due to a failure to meet demand, to find a mission that is needed, that still resonates; sometimes it is because of over-saturation.  But, please, listen and hear the message; it isn’t hard to do.  When nonprofits are closing for lack of good governance or management or insufficient funds or inefficiencies of so many different stripes or simple lack of demand, what brilliant person sees the solution as creating new ones? 

Now is not the time to be starting new nonprofits.  Now is the time for all—funders, individual donors, staff, board members, etc.–to be doing honest assessments of the long-term viability of every nonprofit.  Now is the time to make our sector stronger by doing a little triage:  letting the truly weak close down, the somewhat viable merge and the truly strong flourish. 

Enough is enough.  And we have enough.


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