The role of foundations in creating large numbers of nonprofits

Posted on August 31, 2011 by Pam Truitt

Last week, I shared the number ‘1,537’ as a conversation starter, forming a series of questions around whether ‘1,537’ is too many nonprofits for Sarasota County, Florida.  (That number includes religious and institutional organizations.)

In the blog, I wondered how many of the 1,537 nonprofits have the most appropriate business model for effectiveness and efficiencies.

And, of course, I asked for readers to comment. But, to date, you’ve been silent. Blogging can be a lonely space, so I don’t get worked-up when no one takes a stab at my questions!

To expand the viewpoint about whether 1,537 is too many nonprofits, I read David La Piana’s Merging Wisely article. The piece is comprehensive and thought-provoking, slicing the merger question into seven sections. The first section is devoted to The Right Number of Nonprofits and is my jumping off point for this blog. Future blogs will tackle other sections of the article.

La Piana theorizes that effectiveness and efficiencies of the sector—not the numbers—are the focus for partnerships. I agree with him….so far, so good.

When the economy is rockin’ and the tide is rising, everyone/everything gets funded. When the tide goes out or foundations change focus, they turn a critical eye to the nonprofit sector and begin making calls to weed-out inefficiencies through mergers. I agree with La Piana that this is a typical but not always a prudent strategy.

Merger is the ‘biggest gun in the partnership arsenal,’ says La Piana and there are other partnerships that are more appropriate. La Piana concludes the section with calling foundations to the carpet for their own role in creating and funding nonprofits with unsustainable business models. Ouch.

I am fascinated by La Piana’s theory.

As you scroll through his article, you can read the comments posted to date. I’m very interested in your comments.

Do you agree with La Piana? Are foundations are contributing to the large number of nonprofits?


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