1/ After 10+ years in the nonprofit sector, I’m convinced that relying on donations is an ineffective way to scale impact. Here’s why the donation trap is a broken model:
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7/ How should nonprofits grow? There are a few good models that can help avoid the donation trap:
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8/ One option is to stay small and only ever raise
$x / spend y on fundraising. These nonprofits can be some of the most impactful per dollar spent, but they’ll never scale.Show this thread -
9/ Another option is to use donations to find a revenue model (similar to how startups use VC). The more these nonprofits help, the more they earn, the bigger they get. Issue is it doesn’t work for everything (e.g. treating very poor patients).
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10/ Improving government is also very impactful. Govs control vastly more resources than nonprofits, and they have a revenue model: taxes!
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11/ I’d love any data or examples that contradict this hypothesis. I’m open to changing my mind if proof or even compelling counter examples are there. I’d also love to learn about more alternative models.
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12/ Lastly, I hope people don’t interpret this as “all nonprofits are broken” because that’s not the case. Lots of nonprofits are doing great work. But please don’t keep donating to / building nonprofits that raise more and do less. The donation trap is a broken model.
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Do bigger nonprofits really spend more on fundraising / are smaller nonprofits really better? Conventional wisdom (not that that means anything) is that there are too many smaller nonprofits and they’re not better
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That’s what I’m arguing, but I’d love to be wrong. I agree conventional wisdom is there are too many small nonprofits, but I don’t agree it’s that they’re better. Usually I hear people pitching small nonprofits, not big ones like the Red Cross (ppl seem skeptical of those).
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Now that I think more, I wonder if conventional wisdom is that there *should* be more big good nonprofits, not that there are. I’d like that too, tho I think that’s ppl incorrectly mapping ideas from industry where big = efficient, but nonprofits don’t seem to work that way.
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