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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2/ Fundraising doesn’t scale well. The bigger nonprofits get, the more money / time they spend fundraising, and the less they spend on programs that help people.
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3/ Some people think this is ok. The argument is that while impact per dollar may go down as nonprofits scale, the total impact (eg # people helped) may increase. “Nonprofits should be able to invest in growth for future returns just like Amazon!”
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Replying to @ChaseAdam17
Does impact per dollar go down as nonprofits scale? Should go up, right? Or is the argument that the people you’re impacting need it less as you scale beyond the initial target market? Or that the cost to reach them goes up because you already impacted the “low hanging fruit”?
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Replying to @barenblat
Yes, I’m arguing impact per dollar goes down as nonprofits scale bc they spend more $ / time per dollar on fundraising. The problems that arise from having one group pay while another benefits seem to compound as nonprofits scale.
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Replying to @ChaseAdam17
On what basis are you making the argument? Does the data show that larger nonprofits spend > budget % on fundraising? I don’t often hear that. That said, nonprofit work often doesn’t scale like software. Nothing scales better than SaaS. And how much of it’s $8B budget does ...
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No, the data doesn't show larger nonprofits spend more on fundraising. It says the opposite! I'm arguing that self-reported data is not accurate (see accounting gymnastics tweet). Also not sure why we're comparing nonprofits to software/saas, we're a nonprofit and we sell saas.
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