In my book, The Rise and Fail of Charities In the 21st Century: How The Nonprofit World Is Changing And What You Can Do To Be Ready, I write about the concept of social purpose organizations (e.g. nonprofits and social enterprises) “going big.”
Stanford Social Innovation Review published an article last year, which stated, “Since 1970, 46,000 for-profits have crossed the $50 million annual revenue barrier, as opposed to only 144 nonprofits. That’s shocking. The most effective and economical way to solve big problems is not 10,000 organizations serving 100 people per year, but rather 100 operationally and programmatically excellent organizations each serving 10,000.”
We know that many nonprofits will never cross $1 million budget. There is something to be said about pushing more social sector organizations to expand in scale and budget so they are able to leverage greater resources to affect and change the lives of more people.
However, the reality is that we will not have – nor should – every social sector organization grow large. Just as in the for-profit business world, we need the large operations and we also need those small entities. Smaller nonprofits or social enterprises are more flexible and are able to respond quickly to issues within their communities that they may have to address because they do not tend to have layers of bureaucracy. Sometimes, these smaller organizations are also more ingrained into the fabric of their local community.
That said, even small mom and pop shops can “go big.” One aspect of this that cannot be dismissed by any organization, whatever the size, is the “big vision”. Large and small organizations need to desire to do great things, even if the scope of their impact is relatively small as compared to others.
This means that leaders should always be striving to make the highest degree of impact with whatever population they serve. In order to be able to accomplish this, it means that executives should be looking to hire the best talent, implement the best programs and develop the best experts in their community, etc. These are all differentiators.
It’s simple. Small and large social sector organizations are literally in existence to change and improve lives. This is an awesome responsibility and sometimes when we are in the thick of things, we become somewhat myopic. We seek to render immediate aid, or charity, but we sometimes miss the opportunity to play our part in being more philanthropic. That is, driving to address the core issues in response to the symptoms we are addressing.
Going big means defining your organization. As I describe in my book, I have a friend who told me that once she was looking to support music education for children in her city. She expected to find one, perhaps two, nonprofits that she could look at to help.
Instead, after doing research, she was faced with more than two-dozen organizations.
In doing some additional digging, she came to realize that many of these nonprofits had been established, but they were tripping over each other and simply treading water year after year. They were each serving a small number of children, not making much money – less than $100,000 a year – and there was really no difference between one organization to the next.
What she told me was that she wondered why some of these organizations did not consolidate, partner or merge in order to be able to leverage more resources, invest and perhaps even serve more children.
What this exemplifies is something that happened a lot during the course of the 20th Century, when the number of nonprofits grew exponentially. There were socially minded individuals and professionals who wanted to “make a difference”. So, they all decided to create an organization, but often there was no real distinction between one organization and the other nearby.
Today, as we see the changing landscape of donors and how they want to tackle societal issues, we know that increasingly, individuals want to support organizations that are able to demonstrate a big vision, speak about results and impact and are able to separate themselves from their competitors. Donors are also looking for creative partnerships and innovation – even by small organizations.
As donor thinking evolves and their expectations change as to what they want to see for supporting an organization, we know that social sector organizations will need to become more creative in how they operate. They will need to demonstrate a unique value proposition, in other words, go big with vision, and differentiate themselves from other similar entities.
Author of, “The Rise and Fail of Charities In the 21st Century: How The Nonprofit World Is Changing And What You Can Do To Be Ready.” Get your copy here.
© 2015 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.