Marc Lapides wrote an op-ed in Crain’s Chicago Business calling for an 1871 accelerator for creating new non-profits.
Most cities could actually use the opposite. What they need is an infrastructure for euthanizing non-profits that are past their expiration date.
When I look around older cities, I frequently see that they’ve got a veritable armada of non-profits. Rarely do I see these making a huge difference in the trajectory of the city.
The usual complaint about too many non-profits is that they aren’t coordinated, and so often overlap or don’t work well together on whatever cause it is they are trying to advance.
This actually doesn’t bother me. The temptation to try to create a single uber-structure for everything is always there, but distributed systems have their own virtues. And where there are legitimate problems, the organizations generally come up with a solution. An example is the various “clearing house” organizations that charitable orgs use to prevent double-dipping.
The bigger problem is that all these non-profits are basically sand in the gears that make it harder to get anything done. While the Lapides talks about innovation, from what I’ve seen non-profits seem to be among the biggest advocates for the status quo.
Ironically, Lapides implicitly makes this point when he acknowledges funders prefer big, established organization.
Try to do anything in a city and you’ll be told to meet with all these “stakeholders”, a large percentage of whom are non-profit leaders who claim to speak in the name of some constituency or cause but too often represent their own personal fief.
Anyone wanting to do things in a city has to run this gauntlet of non-profits and find a way to placate them.
Sean Safford’s famous study “Why the Garden Club Couldn’t Save Youngstown” is a perfect example of this. The Garden Club – a non-profit – was basically a vehicle for reinforcing existing social networks, creating excess social capital that made change difficult.
Too many cities are like Safford’s Youngstown. They could use a culling of non-profits more than the creation of new ones.
Killing unneeded stuff off is hard almost everywhere. For example, eliminating an obsolete app or even a report can be very difficult, as I can tell you from my IT experience. But I can also tell you a lot of them do very little. One time I replaced a legacy system with over a thousand reports. We went live with less than 15 initially critical reports, and the lack of the other 1000+ made no difference. In cities, the Pareto principle likely applies to non-profits as it does everywhere else: the top 20% most effective non-profits deliver 80% of the public benefits.
But just because eliminating organizations is hard doesn’t mean it’s not worthwhile. In cities that are having trouble changing or dealing with problems, leaders should be looking harder at getting rid of a bunch of non-profits than they are at starting new ones.
Getting rid of non-profits is like cutting the Federal budget or getting rid of US Congressional representatives: yes, institutionally, there might be too much spent and too few effective officials. But start pointing at one piece of the budget or one representative, and their defenders come out of the woodwork. Inertia requires a tremendous amount of energy to overcome. Likewise with non-profits: all have their passionate advocates and true believers.
A lot depends on endowment and funding sources, and upon field of endeavor. In a world of threats to government social spending, social non-profits may be called on to do more to provide food, shelter, and healthcare for the poor and mentally ill.
The “really big” class of non-profits is colleges, universities, and health systems. We’re seeing smaller colleges close, but not a huge number. I suspect more than would admit it are coasting on endowment without a real plan; witness St. Joseph College in Indiana. With online learning coming on, there will probably only be more closings.
Obamacare has brought about a reduction in the number of non-profit healthcare entities, as health systems increase their scale through amalgamations.
The final large class of non-profits is churches. I think we have seen many go out of business as the mainline denominations shrink, replaced by suburban megachurches.
I think generally the non-healthcare not-for-profit situation is self-resolving. As money is increasingly directed by foundations and charities to larger-scale organizations, funding for many of the smaller organizations will go away and those organizations will close or merge. A demographic change is underway too: as the Boomers who started and/or staffed many non-profits lose their youthful zeal, and as their issue-based organizations lose their relevance, I suspect some will fade away as a result.
Aaron:
Having both worked for and served on the Board of several non-profits, I have thought quite a bit about this topic. I do agree that there are a fair share of “fiefdom” non-profits that are more ego-driven than anything else. Do think there are other categories though.
The first thing I see is that there are many non-profits that overlap in duties, and in this case should probably merge. But that’s hard to do when everyone has their own stake in the results and there’s nothing like investor returns to force mergers like there are in the private sector.
Second, many of the most successful non-profits are arms of a larger organization. Many non-profits don’t have the resources to adequately achieve their goals. The few who do are often those non-profits that were sponsored by the City or State or a religious organization, and so come pre-packaged with a “top-down” mission and values.
The third group are what I would call a true “bubbling up” of grassroots concerns. These groups are often small and address neighborhood issues or a specific topic. So unlike a city-wide redevelopment agency, for example, a local community development corporation (CDC) might focus on the specific issues in that neighborhood. Unfortunately these groups often don’t have the resources to achieve much and can be quickly co-opted by the larger non-profits.
How do we ignite a true bottom-up empowerment of communities? The governments and those non-profits beholden to them need to change the way they work with these groups. They need to identify the ones that are really trying to do good works and that have the ability (through their people) to really effect change. Then, instead of doling out the usual chunk of CDBG or capital funding and calling it a day, they need to go to these groups and ask “How can we help you reach your goal?”
This involves a radical re-thinking of how government works. In the community development example above, since this is the arena I work in, it could be that the city-wide redevelopment agency acts as the “development arm” for the local CDC. Go to the community, listen, identify goals and then work towards those goals with the community in a way that makes sense. True not all communities or CDCs are savvy enough to know how to use that kind of resource effectively, but for those that do the city redevelopment agency can be a powerful resource to achieve mutually beneficial goals.
Unfortunately what happens in many cases is that these larger groups come in with their own agenda forged in City Hall or a far-away board room, without much input from locals, and then are seen as intruders. These groups then become the “bad guy” when in reality all parties likely have at least some of the same vision for the community.
Another example might be a small arts start-up vs. the City arts organization. The City organization should be empowering small groups to grow and thrive, but often the City groups are more concerned about the symphony or the latest traveling exhibit.
This is not to trash city government or large non-profits, they do critical work and often have very laudable goals, and I have worked for several of those larger non-profits in my career. But a more thoughtful and proactive approach towards those small non-profits that can handle it would go a long way towards strengthening neighborhoods and economies in cities.
As a consultant, I’ve had the experience you describe, of being told to consult the “stakeholders”. I wouldn’t be there if there was a need for change, and all too often their interest is less in what that change will mean for their “clients” than how it will make them look bad. I do believe there is a role for De Tocqueville civic organizations, but those that are primarily funded by government have often become simply an extension of it and are not truly independent. There’s a big difference between non-profits and not-for-profits. I’m all for the latter.
George, like you I work in non-profit community development and have given a lot of thought to appropriate models and scale. I agree that, at least in Indiana where I work, there are some twists in the law that make dealings between redevelopment commissions and CDCs easier so it’s important to have a partnership there. But there doesn’t necessarily have to be a 1:1 relationship between RDCs and CDCs.
However, multiple organizations working at “neighborhood scale” in a large city is inherently inefficient. Lots of small organizations (each with board and staff) and small footprints competing for resources makes it difficult to assemble a coherent city-wide focus. That job typically (and perhaps properly) falls to those providing funding (City, LISC, and charitable foundations) but it tends to limit the maneuverability of the neighborhood organizations unless they have large reserves or independent income sources.
I agree to a point. I guess my thought is that the on the ground groups are lean but represent the neighborhood. Low overhead. The largest orgs partner with them. You can see this in Cleveland where Cleveland Housing Network started out as sort of the”development arm” of the robust CDC community there. It certainly has evolved over time to where’s there’s some overlap and duplication, but three are strong CDCs I Cleveland partly because of that model. Good community leadership can keep the bush pruned while giving enough water for each org to thrive as part of a larger whole.
So true for Cincinnati. Interestingly, non-profits are one of the few things that will lure outsiders to this famously insular and inward-looking city. The only non-locals I know in Cincy came to work for non-profits here and bemoan that the cities they left can’t follow Cincinnati’s example of having an ‘eco-system’ of non-profits for virtually all human needs.