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Is the Proliferation of Small Nonprofits Helping or Hurting?

Despite the rapid proliferation of nonprofits, we continue to witness increases in hunger, homelessness, mental illness, social injustice, war, and environmental degradation – pretty much everything we exist to address.

We must question if the increased number of organizations and the siloed way in which we traditionally operate is part of the solution or part of the problem.

Importantly, we don’t blame the dedicated board members, leadership, or staff who comprise the sector. We blame the system that rewards the organizations that can tell the best story regardless of efficiency, effectiveness, outcomes, or impact. We want to support a system that invests substantially more in the highest performing Strategic Impact Enterprises and encourages the remaining organizations to partner with them for greater collective impact.

Interesting Statistics on the Growth of the Sector

  • In 2012, the U.S. had 1,082,000 nonprofit organizations (source)
  • Today there are 1,800,000 organizations (source)
  • There are more nonprofits in the U.S. than lawyers
  • There are 13 times more nonprofits than all of the K-12 public and private schools, colleges, and universities combined
  • The US has added nearly 800,000 orgs in 10 years – 66% increase.
  • By contract, the for-profit sector has only grown by 2%-3% in this same period. (source)
  • There are over 10,000 million nonprofits in the world
  • 90% of nonprofits have budgets under $1,000,000
  • There was a 16% reduction in organizations following the last recession

Quote From the Book Challenges for Nonprofits and Philanthropy

“As the sector has grown at a dizzying pace in recent years, the virus of separateness has become more deadly, paralyzing the potential of unified action on major public issues. The paradox of our sector’s huge growth is that its very size has rendered it weaker, not stronger. The larger it has grown, the more splintered and divided it has become.”

Quote From Dan Pallota Ted Talk

“Our social problems are gigantic in scale, and our organizations are tiny up against them… and we have beliefs that keep it that way.”