Sustainability is Today’s Nonprofit Snake Oil

Sustainability is Today’s Nonprofit Snake Oil
July 23, 2016 Ron Wormser

‘Sustainability’ appears to have become not only one but the universal objective of much of the charitable nonprofit sector’s attention and effort: nonprofits want it, and funders want those they support to achieve it. The hype would suggest that becoming sustainable is the panacea for our sector. But is it really a good idea or is it just the latest snake oil?

Let’s assume that as used in our charitable sector, sustainability means a nonprofit has developed or acquired the capability and probability of being self-perpetuating with a stable financial base. That certainly sounds like the holy grail for any nonprofit, the equivalent of organizational nirvana.

But two questions are worth asking before reflexively signing on for that objective:

1. Is there any reason to think wide-spread or universal sustainability is possible? And,

2. Even if possible, is it desirable?

With 50-plus years in charitable nonprofits, my answer to both is “No”. Here’s why.

1. Is wide-spread sustainability not only possible but also reasonably probable? If history is any guide, the answer is “No”. Charitable nonprofits have been around for a very long time, rooted as they are in centuries-old religions. Over all these hundreds of years and accumulated hard work of countless highly motivated and extremely well-intentioned folks, most non-profits have and continue to live on a financial edge in a constant struggle to raise minimally essential funds year-after- year- after year. That has remained the hard reality all these years despite an ever-increasing level of public and philanthropic support. This is not the place to explain why that is the case, but rather to simply note that there is no historical basis for believing that a sound financial footing is a realistic objective for an overwhelming large percentage of nonprofits.

2. But even if it were, is sustainability of most if not all nonprofits an inherently good idea and a worthy goal to which nonprofits should aspire? Again, my answer is “No” for these reasons:

REASON #1: TOO MANY NONPROFITS WITH TOO MUCH DUPLICATION

It is conventional wisdom outside our sector and by some, perhaps many of us in it that – simply put – there are too many nonprofits. Worse, there has been a virtual outbreak of new nonprofits over recent years. According to the National Center for Charitable Statistics, since 1995, the overall number of nonprofits has increased by c. 45% and within that total, the number of charitable nonprofits has grown by a whopping 66%.

We can safely assume that virtually all of these nonprofits are engaged in genuinely charitable activities (with rare but notable exceptions). The work they do is certainly worthy. But has there been a comparable growth in needs not previously being addressed by existing nonprofits or that offer approaches to existing needs not previously tried or doable by an existing nonprofit? Of course not.

The purpose here is not to explain the reasons for but to accept as fact that there is needless and wasteful duplication and proliferation of charitable nonprofits. That being the case, seeking and supporting wide-spread sustainability would perpetuate, and even risk worsening an already overpopulated sector.

REASON #2: DISSIPATION OF POTENTIAL BENEFITS

The reality that charitable nonprofits are by definition dependent on limited public and private funding to help pay for the services and programs provided means that duplication and proliferation are inherently wasteful. An overcrowded sector also means that available but limited public and private funds are spread widely, thus dissipating their potential benefit to those being served.

Just as concentration of risk is an acknowledged weakness, dissipation of support funding should also be understood as another type of weakness. Giving $100,000 to a high-performing nonprofit with a proven track record offers the probability of greater benefit (the nonprofit equivalent to private sector ROI) than $10,000 given to 10 more marginal organizations.

REASON #3: ORGANIZATIONAL PRESERVATION IS NOT A WORTHY OBJECTIVE

At its core, the concept of charity is to help others. Who wants or needs help and who and how help is provided vary widely, but the core concept remains: a focus on helping others. If helping others is the primary objective, then the question should be: what is or are the best means for achieving that objective? Therein lies the most fundamental of flaws to sustainability: its purpose is to preserve existing providers which is to say perpetuating existing overpopulation and needless, wasteful duplication of effort and dissipation of limited public and private support funding. Ultimately those most harmed by wide-spread sustainability would be those who rely on charitable organizations for needed assistance.

Self-preservation is as strong an organizational instinct as it is a human one. But the goal of sustaining organizational life never has been nor should it become a genuine charitable purpose. On the other hand, meeting human needs in the most effective and efficient way puts the focus on the charitable purpose where it rightfully belongs.

 

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