A program officer was describing skepticism expressed by the founder and president of the foundation of an aspect of the nonprofit sector. “Why,“ asked the president, “can’t more nonprofits merge?”
This isn’t the first time I’ve heard this question and comments like it, and maybe you have too. Sometimes it’s raised in the context of streamlining, as an argument about how nonprofit organizations could be more explicit. Sometimes it’s raised as a question about whether funders should force or facilitate more mergers to create a more efficient and effective field.
Project Streamline focuses more narrowly on the grantmaking process, but let’s consider the implications behind the question. It assumes that:
- There are too many nonprofits.
- Fewer are better.
- Big organizations are better than smaller.
- Scale is better than diversity or choice.
- Funders may know better than communities or nonprofits what is needed and what is valuable.
But most of all, to my mind, it assumes that what’s good in the sector is different for grantmaking foundations and for grantseeking nonprofits. I’ve never heard anyone suggest that there should be fewer funders, yet it’s certainly plausible that combining foundation assets would create larger philanthropies, result in fewer offices, fewer staff (at least at the executive level), and fewer customized requests for funding—that is, less work for grantseekers.
No sweeping statement is likely to be 100% right. Yes, sometimes it makes sense for organizations to merge, but you could also argue that sometimes economies of scale aren’t more powerful, just more bureaucratic. Yes, sometimes foundations’ bird’s eye view discerns critical aspects of a field… but you could also argue that sometimes the array of communities, people, and issues make an array of organizational options vital.
Let’s be real. Before you advocate for what is “best” for community organizations, check those gut assumptions by asking: Do I think the same is true for foundations? If not, maybe what’s being advocated isn’t really about what’s best.
 This is only one example of funders wanting to apply standards to nonprofits that we don’t apply to ourselves. Consider also: indirect expenses, collaboration, frugality, accountability, and the diversity of staff and boards…