Are nonprofit groups dead?
Is the non-profit dead?
Sure, maybe 鈥渄ead鈥� 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, it鈥檚 clear that whatever you call them, nonprofits aren鈥檛 going anywhere. In 2010, there were registered with the Internal Revenue Service. Notwithstanding its size, the nonprofit sector hasn鈥檛 been averse to the changes that technology bring.
Organizations such as or , which facilitate micro-loans for business or college education, connect donors directly with the people to whom they give.
Bulk mail fundraising solicitations are giving way to like 鈥淭飞别蝉迟颈惫补濒蝉鈥� 鈥� galas or gimmicks for giving, depending on your perspective 鈥� where users of the online micro-blogging site Twitter use the power of their cyber-networks to organize offline fundraising events.
Foundations like or offer grants and training to young change agents they call 鈥渟ocial entrepreneuers,鈥� a term that鈥檚 suppose to denote the savvy and efficiency of today鈥檚 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 world鈥檚 most-pressing challenges. Yours truly was invited to eavesdrop (with expenses paid by the institute) on those debates, under one condition 鈥� I can tell you what was said, but I can鈥檛 tell you who said it.
So without naming names, I can tell you that there were about 20 nonprofit leaders, from major funders that you鈥檝e 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 鈥� private foundations, individual philanthropists, governments 鈥� for most of their expenses. The argument, perhaps a good one (at least for awhile), was that there鈥檚 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 鈥渢he philanthropy dole.鈥�
But, as one Aspen leadership fellow from Latin America observed, 鈥淭here鈥檚 been literally trillions and trillions of dollars given through nonprofits, with limited results.鈥� As a businessman turning toward social change ventures, that nonprofit model baffles him.
鈥淚f you give me money, I produce results,鈥� he said of his primary field. 鈥淚f I don鈥檛 produce results, I don鈥檛 get more money.鈥�
Enter the world of social-impact investing, or socially responsible investing. In this world, investors are willing to trade some 鈥� or perhaps all 鈥� of their possible return on investment (ROI) for achieving some social change, or 鈥渟ocial return.鈥�
But that begs another question:
What鈥檚 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, 鈥淎necdotes are not going to cut it anymore.鈥�
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, 鈥淗ow do we get measure right? Our 鈥榩rofit鈥� is, we鈥檙e changing lives somehow.鈥�
Making that change happen, she insists, requires that 鈥渢he helper鈥� 鈥� donor or investor 鈥� 鈥渘eeds to listen to the doer.鈥�
Is 鈥渟ocial entrepreneurship鈥� 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, 鈥渟ocial entreprenuer鈥� 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. 鈥淚t has a capitalistic individuation,鈥� said one Aspen leader.
Not that 鈥渘onprofit鈥� is any better as a word.
鈥淚t describes tax status,鈥� she said. 鈥淚t doesn鈥檛 describe what you鈥檙e doing.鈥�
But the word has been around long enough to be bundled up with an ethos of 鈥渃ommunalism,鈥� she conceded. "And it鈥檚 important not to lose that.鈥�
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