Zero Sum Game

Posted by Laura Otten, Ph.D., Director on July 7th, 2008 in Articles, Thoughts & Commentary

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Money on Tightrope

Two new data points give with one piece of news and take away with the other.

According to Giving USA 2008, the news appears all glowing. In 2007, over $306 billion was given to charities by foundations, corporations and individuals, an increase of 3.9%. And, good news or better news, depending upon how your organization’s planned giving skills are, bequest giving rose 6.9%, after what is referred to as a “steep decline” in 2006. The conclusion drawn is that we are beginning to see the tip of the wealth transfer iceberg.

But let’s not rejoice too much, just yet. Two other things are happening that should, dim this potentially rosy picture. The first the sector cannot control; the second it can and should. First, as we all know, the recession hadn’t really hit in 2007. Gas prices weren’t over $4 a gallon, the costs of the basics of the food pyramid hadn’t started to spike and airlines weren’t charging per bag. There certainly hasn’t been a lot of hoopla about people rushing to give giving their tax rebates to charity. So, a year from now, I’m not sure I’d be sharing the same positive statistics about giving and the transfer of wealth.

Second, is a growth trend in the sector does not seem to be abating. According to the Urban Institute’s The Nonprofit Almanac 2008, the number of nonprofits in this country grew to over 1.4 million, up from the 1.1 million entities that existed in 1998. Even taking into account the number of organizations who went out of business over the course of those 10 years, there are still more nonprofits today looking for a piece of the eligible dollars. It truly is a zero sum game. There simply is not enough money to go around, nor should there be.

It is time for the sector to get wise. Proliferation and independence are not, as I’ve said before, necessarily good things. We cannot afford to continue to spawn new organization after new organization, to support organizations that have been hanging on by a thread for years or to keep hoping that next year will be different. We must encourage, help and, if necessary, push mergers, acquisitions, partnerships. Here is a case where less truly will be more: more money to go around to the good, strong nonprofits, more employees working in organizations that can afford a seriously, livable wage, and more—and better—services for our clients and communities.

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.

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