October 16, 2018

Tackling Tough Questions About the Proliferation of Dane County’s Nonprofit Sector

Andy Davey

Community Resource Analyst Andy Davey presents at Madison Nonprofit Day.

The number of nonprofit organizations in Dane County has doubled in the last two decades. To what degree does this proliferation indicate a nonprofit sector that is healthy and vibrant, or one that is full of redundancies and confusion?

This question framed my presentation (based on the research paper, “Sifting through Abundance: Outlining the Nonprofit Sector in Dane County”) at the recent Madison Nonprofit Day, an annual conference for nonprofit leaders and service providers. I was hoping to provoke some lively conversation and thoughtful reflection, and learn as much as I could myself from those attending the session.

Knowing that most of the audience would be people currently working for nonprofit organizations, however, I wasn’t sure how they would respond. Happily, there was broad eagerness for new information, as well as a number of open, honest, and nuanced reflections about the nonprofit sector.

Quite a bit of discussion centered around how to foster more collaboration among organizations with similar missions—but recognition that it’s not easy. One attendee commented that collaboration muddies the water about who’s responsible for what, which can cause friction and frustration among the collaborators as well the funders. There’s also a question of power differentials: Will smaller organizations, especially those working at the grassroots level among marginalized communities, have as much say as larger, more established, and more privileged organizations?

Another attendee posed another very good question: How can funders collaborate more? MCF has been working in this territory, including through conversations as part of the Wisconsin Philanthropy Network, but we know we can do more.

After I shared a graph indicating that 55 percent of organizations (at least 1,300) in Dane County operate with annual revenue of $25,000 or less, one person wondered: What is the quality of life for staff when budgets are small? Does consolidation lead to better wages?

Presentation sketch by attendee Stephanie Steigerwaldt of What's Possible Now

Finally, there was a general discussion about why there are so many nonprofits and what that means. Julie Swanson from What’s Possible Now made the point that there are no incentives for disbanding an organization. Instead, incentives are geared towards keeping organizations going, even if their mission has been achieved or its model of work has become outdated.

This last point resonated with a recent blog post I read by Vu Le at Nonprofit AF: “Someone wants to start a nonprofit? Quick, grab the torches and pitchforks!” He notes that it’s really easy to start new organizations, driving some nonprofit veterans crazy. He provides some helpful guidance to those sector veterans for how to “put down the pitchforks and take a deep breath” and help guide neophytes “trying to make the world better place,” including providing trainings not just on how to start nonprofits but “assistance in dissolving nonprofits.”

In the end, the session raised as many questions as it answered, and provided much grist for the future research mill, which is what I was hoping for. It encouraged me that our work here at MCF to collect and analyze data, converse with lots of different people working in the nonprofit sector, and share our findings continues to serve an important need in the community.

Reach Andy at adavey@madisongives.org or (608) 232-1763.