The Nonprofit Sector Must Change, or Be Left Behind!

I often start my speeches or consulting sessions by stating that the nonprofit sector is broken. I'm not talking about being a little off track or needing some tweaks here and there. I am talking about smashed up and shattered to splinters BROKEN.

Consider the present social sector. Not only do we benefit from aggressive tax breaks and estate benefits that help us raise billions of dollars above and beyond any money we can make selling services and/or products like the private sector; but we also have access to human capital (in terms of free volunteers) at a level that should make our sector able to accomplish change on a scale the private and government sectors couldn't even dream of! Yet in reality, we are significantly less effective than any other sector.

And people know this!  Many people see the potential for the social entrepreneurship movement to take over and actually leave the nonprofit sector behind. I believe our sector is extremely important in solving the complex problems of our time; but you can't blame those who have witnessed great social change from the social entrepreneur movement, while the original social sector continues to struggle with mounting issues and low efficiency.

Most of the time I just feel bad for the nonprofit leaders who wear too many hats, work 80 hour weeks, and still are underpaid and often not respected by their own board members. Nonprofit boards are notoriously closed-minded to any change, simply because of the perceived risk that no one wants to be left responsible for. So the status quo continues to be rewarded, while those leaders who try to bring innovation and change are often replaced or disregarded.

Well the status quo simply will not work in the nonprofit sector any more. And incremental changes will no longer be enough.  I am no longer willing to allow our sector, which is made up of some of the most non strive and passionate people I know, to limp along waiting for the other shoe to drop.

This new and challenging environment – with greatly reduced funding and significantly increased need – requires that every nonprofit MUST work together because nothing short of a quantum, sector-wide change will save us. If we want to survive, and more importantly, if we want to become the sector of significant social change we were always meant to be, we must create a culture of innovation, efficiency and collaboration.

Today is a completely new day. Period.

This new day starts with every nonprofit asking themselves what they exist to change, and if they are actually creating that change (a challenge recommended by Mario Morino in his book, Leap of Reason: Managing to Outcomes in an Era of Scarcity). With limited funding and more complex problems to be solved, it is not enough anymore to just be doing good works. If a nonprofit don't know what they exist to change, or determine they are not making the social change needed, then reviewing why you are taking limited financial and human capital is necessary. Closing or merging a nonprofit organization does not make it a failure, but utilizing limited resources without affecting change most certainly does.

If, on the other hand, a nonprofit determines that they exist for an important purpose and are creating important social change… then it is time for the REAL work to begin.

(Continued: A New Nonprofit Sector)


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