Managing a Nonprofit Boom
by Laura Otten
As the Nonprofit Center at La Salle University enters its 30th year of service to the Delaware Valley, the linchpin of the nonprofit sector remains what it was three decades ago: passion. The millions of Americans who serve nonprofits do so out of fervent belief in a mission.
Beyond that constant, however, we are struck by the magnitude of change over the past 30 years. The number of human services, arts and culture, community, health, philanthropic, and civic nonprofits has nearly doubled to close to two million, with much of that growth happening in the last 15 years. This has fostered a richer nonprofit sector serving a much more diverse range of populations and missions. For example, instead of a mere handful of local arts and culture opportunities, Philadelphians can choose from a tapestry of hundreds today.
There is, however, a downside to this array of options: The sector has simply gotten too big – to the point that it’s now feeding on itself. Each week, the Nonprofit Center fields calls from well-meaning individuals who recognize a need and want to start a nonprofit to address it. In response, we ask if a new organization, with all its attendant parts that must be nurtured, financed, and sustained, is the best approach – especially when we can name a number of organizations already working effectively on an issue.
If your product doesn’t sell and you run out of money in the for-profit sector, you close. But in the nonprofit sector, your passion just goes into higher gear, because you know your product is valuable; you just haven’t found the right “angel” to rescue it.
The American nonprofit sector’s growth has made it equivalent to the fifth-largest economy in the world, employing almost 10 percent of the nation’s workforce and 25 percent of the region’s. These jobs increasingly come with livable wages and medical benefits, partly because of a growing understanding that passion does not pay the rent, put children through college, and buy health care. As the sector has expanded and become an economic engine, there has been a welcome recognition that although nonprofits are often started by people fired up by a cause, they must run like businesses if they are to be sustainable over the long haul.
This has led to a “professionalizing” of the sector’s leadership, such that it’s no longer enough to come up through the ranks to qualify as an executive director. Potential nonprofit leaders also need knowledge of the business side. Of course, nonprofit boards can also go too far by hiring executive directors who are too corporate and not sufficiently concerned about the mission.
Almost 300 American colleges and universities now offer at least some nonprofit management courses, and 168 offer graduate degrees with at least a concentration in nonprofit management. Eight of these institutions, including La Salle, are in the Delaware Valley.
With the sector’s growth comes an increase in public attention and scrutiny. Like their for-profit brethren, nonprofits must hold themselves to rigorous standards. And public scrutiny must be informed. A municipality desperate for cash shouldn’t decide to start taxing charitable organizations without considering the consequences for a food bank or shelter that can’t bear that burden. Organizations must be evaluated on their merits, not broadly condemned because one public official misused charitable funds.
While the sector continues to evolve, it’s as true today as it was 30 years ago that nonprofits are making our world richer and ensuring its humanity.
Laura Otten has worked for the Nonprofit Center at La Salle University’s School of Business for 25 years and has been its director since 2001. She can be reached at firstname.lastname@example.org.