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
Salesforce spend on sales and marketing? HALF! $4B! Not many nonprofits have a $4B fundraising budget. Or would be allowed to spend half their budget on fundraising
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This is the crux of my point... companies can invest in sales / marketing to grow markets (i.e. GDP), but nonprofits are fighting over a fixed market that's 2% of GDP. Salesforce can get ppl to buy more stuff, but nonprofits can't seem to get more ppl to donate. It's zero sum :(
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