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March 17, 2006


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You should take a look at the IRS data that shows that all those small nonprofits taken together have very little economic impact.

What the studies you refer to show (to this observer) is that there is a crying need for large numbers of small nonprofits to merge or go out of business. There are far too many organizations for foundations to support effectively, and the jury is still out on whether significant number of organizations can find earned income sources.


Albert Ruesga

I guess I don’t measure the effectiveness of these small nonprofits by their “economic impact” (not sure what that means—total operating expenses?). The community-based organizations I’m familiar with serve places where the big guys won’t or simply don’t go. The EDs of these organizations are passionate and make do with very little, often marshalling many volunteer man-hours to provide much-needed services. I don’t see a special need for these small shops to go out of business. Many will, but not, I assume, before having dome some good for the communities they serve. As for mergers: some create efficiencies, others don’t, and the trade-offs between efficiency and effectiveness aren’t always favorable.

I’m not arguing that there are no small NPOs that should close their doors or merge with other entities. I just don’t believe that “economic impact” arguments clinch the case.


Help me out here. I mean, it's not just the nonprofit sector that's going to feel this demographic pinch, right? Sometimes old farts retiring and making room for fresh blood is good, right?

wanjiru wambui

i think a merger would help a little bit , there are far too many non profits claiming to do something for the community and most times this duplication of efforts is a waste of resources that can be used elsewhere , think about places in Africa where 100 non profits are dealing with HIV , 100 with economic development , one would assume that with increase of non profits there is a greater impact on the causes they serve but the world development report proves otherwise , poverty has increased so why dont they all merge and do strategic management and work towards the goal as opposed to focussing on whether the organisation dies or not. Most non profits infact have moved from the goal of serving to the goal of sustaining themselves , though they called it sustainable development , in so doing they end up sustaining poverty or the very issues they are addressing so that they can continue to be in existence , it is funny that we see other ills done by others but do not see things like high interest rates charged by micro finance institutions as a way to sustain the institution and sustain poverty which then forces the community to be dependent on non profits........if asked ,,a merger is in order

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