Desperately Seeking Disruptionby Josh Jacobson on February 11, 2019
There are a ton of nonprofit organizations in the Charlotte region. Thousands, in fact. Are there too many? Is that even a thing?
We’re unpacking this urban legend and making a passionate case that an increased number of nonprofits is not only a good thing, but desperately needed to bring about disruption to the social good sector.
When Shannon Binns founded Sustain Charlotte in 2010, city leaders didn’t exactly roll out the red carpet for him. Far from it.
“While I did find quick and overwhelming interest from many people about the need for an organization like Sustain Charlotte, I could not get any of our local foundations to invest in helping make it happen,” Binns said. “I knocked on many doors, but none of them were open because I was a newcomer who no one knew and I didn’t have anyone influential in my corner yet.”
Such is the pathway for most social good founders in the early years of establishing their nonprofits. This was perhaps more pronounced for Binns, who was looking to establish an organization focused on smart growth at a time when there wasn’t much growth happening. Charlotte was still in the throes of the Great Recession. Still, he saw a need.
“Local leaders were making decisions that benefited our economy in the short-term with little consideration for how those decisions impacted social equity, our environment, and our economy in the long-term,” Binns said. “I felt strongly that Charlotteans needed a voice for more inclusive and responsible decision-making.”
Nearly ten years later, Sustain Charlotte has grown steadily into an organization well-positioned to positively impact policy and social discourse as our city struggles with the unintended side effects of urban development and gentrification.
According to TaxExemptWorld, Sustain Charlotte is one of more than 4,000 nonprofit 501c3 charitable organizations in Mecklenburg County. That number includes giant professional organizations and all-volunteer organizations alike, with the vast majority serving as modest do-gooder ventures with negligible financial resources. Most financial resources (more than 90% of reported revenue to Charlotte-area nonprofits) go to the top roughly 200 nonprofits with budgets over $1 million.
And that isn’t always a good thing.
While larger organizations have the scale to generate impact in service to their missions and solid brand recognition that makes raising resources easier, they are often conservatively managed, risk averse and unwilling to deviate from programming once they have made an investment in it. Smaller or newer organizations can be nimble. Established organizations can be lumbering and out-of-step with our changing city.
In this way, a robust nonprofit sector is not unlike your 401k; it is important to be diversified. Large and established blue chip nonprofits should be balanced by niche organizations that own their space and emerging enterprises that challenge the status quo. The health of the social good sector should be evaluated not only by total impact, but also by how new ideas are fostered and unique populations are served.
That isn’t to say that every nonprofit should exist. There are plenty of poorly-run organizations that closely duplicate other organizations in Charlotte. That said, the notion of a bloated nonprofit sector is largely unfounded.
“Nonprofits typically arise due to a clear need and those that survive are doing a good job of meeting that need, just like businesses,” Binns said.
“Nonprofits operate within a market-based economy in which they compete with other organizations for limited resources – and the market of donors support those who earn it. Few are in a position to be bad at what they do and survive,” he concludes.
Damn straight. The next time someone complains that there are “too many nonprofits in Charlotte,” which is like nails on a chalkboard to me, you can confidently give that person a raspberry.
This article is the third installment in the “Breaking Good” series by Josh Jacobson. Read Part One and Part Two here.