Can we stop asking if there are too many nonprofits? It’s getting on my nerves

Whenever I point out the challenges with nonprofits getting the funding they need to succeed, invariably someone will bring up the question of whether there are “too many nonprofits” and if much of our problems would be solved if many of them merged or went out of business. Fewer nonprofits competing for resources, and the ones that remain would get more funding. That makes sense, right? (Obviously no, because then I wouldn’t be writing this topic with this title and my blood pressure would drop about ten points).

This is the same logic the giant purple dude Thanos used to wipe out literally half of the lifeforms in the universe in the Marvel movies. It’s the same logic that ecofascists use when they say the world is overpopulated, blame people in poorer countries for having too many kids, and push scary and unethical “solutions” like sterilization.

I’ve written about this before, but since it keeps coming up, let’s revisit.

First, yeah, there are plenty of useless, dysfunctional nonprofits. Especially ones founded by people with big egos and too much time on their hand, who decide without any thought or research to start an organization, oftentimes to do stuff like sending old shoes, used sewing machines, abandoned Labubus, or whatever to impoverished people in remote communities.

But usually when people, especially funders or donors, say “there are too many nonprofits,” they’re not talking about these terrible, self-indulgent nonprofits that most people agree shouldn’t have been formed. And they're probably not talking about the many orgs that are in name only, that aren't very active and thus aren't really competing for resources.

They’re often talking about regular nonprofits that are doing some good work but have been struggling to get funding to keep doing it. In which case, I don’t agree there are too many nonprofits, and I think the focus on it is yet again another example of individuals and organizations being blamed for systemic problems, which we touched on last week.

This assertion that there are too many nonprofits has always annoyed me. But now, it’s especially grating. Over the past several years, demand for services has increased significantly. Many nonprofits are understaffed and some have long waitlists. The ones that exist could use a lot more funding. We may be needing MORE nonprofits in certain issues and geographic areas, such as organizations registering people to vote in rural communities. Marginalized communities are particularly under attack and hurting right now, and they need more well-funded and effective organizations serving them, not fewer.

But also, do we have the same expectations of for-profits? Do we go “Hey, there are too many cafes providing duplicate services! They’re all serving pumpkin spice lattes right now! If every café in the city would just merge, they wouldn’t have to compete with one another for customers, and they’d cut down so much on overhead costs!”  

And, don’t people being served by nonprofits deserve to have choices, just like people deserve to have choices with for-profit goods and services? If they have a terrible experience with one nonprofit, shouldn’t they be able to go to another one that may be a better fit? Why are we ok with people being able to choose among several pizza places or laundromats or tattoo parlors but think the most marginalized people in society should have limited options when it comes to mental health services or homeless shelters or food pantries or whatever?

And what about geographic accessibility? It’s already difficult for many people to receive services, since they may not have reliable transportation, and public transportation is often lacking. Having fewer nonprofits providing vital services would likely make it harder for people to get the help they need.

What’s most annoying to me about this type of question, though, is that when people, especially funders, ask it, they rarely take the time to analyze WHY the problem exists. Why do families in poorer countries have more kids on average? All sorts of systemic factors, including children having to provide labor to support their family due to poverty; high infant mortality rates; lack of access to education, healthcare, contraception; etc.

And why are these countries so poor? Often due to Western countries colonizing them, extracting their resources, destroying their infrastructure, starting conflicts and war, and doing other horrible things, like France forcing Haiti to make reparations for Haiti’s independence.

In the same vein, one of the reasons there are so many nonprofits is because of funders’ behaviors. Liberal funders in particular. They give one-year grants, support nonprofits for maybe three years, then get bored and want to fund something new and shiny. Nonprofits that have tried-and-true programs are left to scramble for funding.

Meanwhile, these funders are terrified of funding political engagement and other solutions that would let nonprofits permanently tackle problems.

The lack of stable funding, combined with scarcity of funding for long-term solutions, means nonprofits are constantly forced to deal with the symptoms of injustice, seldom ever able to eliminate systemic issues and then go out of business.

With these dynamics, why wouldn’t new nonprofits crop up? It’s a systemic problem that we fault individual nonprofits, but doing so just absolves people—especially those with money and power—from taking a long hard look in the mirror and see the part they play in perpetuating the problems they’re whining about and blaming nonprofits for.

Imagine if there’s a raging fire. Groups of firefighters are working to put it out. But the people who control the water supply only give each firefighter a tiny amount of water, and never for more than half an hour at a time, and after 90 minutes, they refuse to give any more water to the same firefighters who asked for water, even if those firefighters have found effective ways to tame to the fire. Because of that, new firefighters keep having to jump into the fray. And when everyone is begging for water to put out the fire, they’re told, “There’s too many of you firefighters! It would be better if half of you just go away! Why can’t y’all be more efficient?!”

Efficient with what?! The tiny restricted one-year grants that never allow for stability or long-term planning? The individual donations that require significant resources to cultivate and maintain? The reimbursement-based government funding that never fully covers the true costs of services, which means nonprofits end up subsidizing their city and state?  

As I’ve mentioned many, many times, conservative funders provide grants of 20 or even 30 years. They are also not afraid of political engagement; in fact, it’s one of their key strategies. This allows right-wing organizations to do their work effectively in collaboration with one another, so they don’t need to form thousands of disparate organizations that are just trying to survive while helping as many people as they can.

I’d really like for us to stop asking this question. Or we need to ask it with the lens of systems and equity. It’s very tiring that we keep trying to find some silver bullet for nonprofits’ funding challenges—Social enterprise! Loans! Mergers! Technical assistance! Toolkits! White papers!—everything except just giving promising organizations, movements, and individual leaders more money so they can get stuff done.

Plus it’s condescending and insulting, something we would never force for-profits to consider, since for-profits are "job providers" while nonprofits, which also provide jobs, are somehow leeches on society.

If we want there to be fewer nonprofits, a good start would be for funders to increase their payout rates, fund significantly, fund two or three decades at a time, allow those on the side of justice to use politics, advocacy, organizing, and other tools to take care of problems. Then they can put out the fires for good, close up shop permanently, and everyone can go home.

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