Are nonprofit groups dead?(Read article summary)
No. But they need to get off the 'philanthropic dole' and make other changes, a panel of experts suggest.
Is the non-profit dead?
Sure, maybe âdeadâ is a bit dramatic for the trusty nonprofit organization. But activists doing good inside and outside the box are increasingly wondering: Is this old way of thinking about doing good works still relevant in the tech-savvy, hyper-cyber world of social change we see today?
For starters, itâs clear that whatever you call them, nonprofits arenât going anywhere. In 2010, there were 1.6 million nonprofit organizations registered with the Internal Revenue Service. Notwithstanding its size, the nonprofit sector hasnât been averse to the changes that technology bring.
Bulk mail fundraising solicitations are giving way to like âTwestivalsâ â galas or gimmicks for giving, depending on your perspective â where users of the online micro-blogging site Twitter use the power of their cyber-networks to organize offline fundraising events.
Foundations like Echoing Green or Draper Richards offer grants and training to young change agents they call âsocial entrepreneuers,â a term thatâs suppose to denote the savvy and efficiency of todayâs 2.0 charities.
But if doing good is getting more efficient, does the old-fashioned nonprofit have a future?
A panel of distinguished nonprofit leaders recently took up this question at the Aspen Institute, in Aspen, Colo. Alumni of the Aspen Global Leadership Network met for four days in July to brainstorm and debate about the worldâs most-pressing challenges. Yours truly was invited to eavesdrop (with expenses paid by the institute) on those debates, under one condition â I can tell you what was said, but I canât tell you who said it.
So without naming names, I can tell you that there were about 20 nonprofit leaders, from major funders that youâve probably heard of, if you read this blog, to small community organizations trying to make change neighborhood by neighborhood, both in the United States and around the world.
Here are three ideas on the future of the nonprofit:
Hat-in-hand funding is a thing of the past
For decades, nonprofits looked to donors â private foundations, individual philanthropists, governments â for most of their expenses. The argument, perhaps a good one (at least for awhile), was that thereâs simply no money to be made in, say, running a domestic violence shelter or feeding the poor during a famine.
No profit motive means no investment, and no investment means no money to save or change lives.
One Aspen leader from the US put it this way: Some nonprofits, he said, are stuck on âthe philanthropy dole.â
But, as one Aspen leadership fellow from Latin America observed, âThereâs been literally trillions and trillions of dollars given through nonprofits, with limited results.â As a businessman turning toward social change ventures, that nonprofit model baffles him.
âIf you give me money, I produce results,â he said of his primary field. âIf I donât produce results, I donât get more money.â
Enter the world of social-impact investing, or socially responsible investing. In this world, investors are willing to trade some â or perhaps all â of their possible return on investment (ROI) for achieving some social change, or âsocial return.â
But that begs another question:
Whatâs the ideal 'Return on Investment' on charity?
And how do you measure it? Donors have become increasingly demanding of data to help evaluate how well donor dollars are being used. As one guy in the trenches observed, âAnecdotes are not going to cut it anymore.â
At the same time, not every change can be turned into a number, much less a return on investment. One woman who runs a nonprofit abroad asked, âHow do we get measure right? Our âprofitâ is, weâre changing lives somehow.â
Making that change happen, she insists, requires that âthe helperâ â donor or investor â âneeds to listen to the doer.â
Is âsocial entrepreneurshipâ the best way to create social change?
True, not all social entrepreneurs are businesspeople trying to make money with ethically responsible or socially targeted investments. Sometimes, âsocial entreprenuerâ describes a person with a creative or unusual vision for solving long-standing social problems.
But whatever the context, the word also implies something else. âIt has a capitalistic individuation,â said one Aspen leader.
Not that ânonprofitâ is any better as a word.
âIt describes tax status,â she said. âIt doesnât describe what youâre doing.â
But the word has been around long enough to be bundled up with an ethos of âcommunalism,â she conceded. "And itâs important not to lose that.â
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