Is There Too Much of a Good Thing in Mass?

Last Friday I attended my first meeting of the Nonprofit Consultant’s Network (formerly CNEN). Geeta Pradham, Director of Programs at The Boston Foundation, gave a little preview of a soon-to-be released study on the financial health of the nonprofit sector. The full report will be released on June 11 at The Boston Foundation’s event “Passion and Purpose – Raising the Fiscal Fitness Bar for Massachusetts Nonprofits.” From what I saw, the news is not good (especially for someone like me looking to land a job in this sector).

I’ve heard it said many times before that Massachusetts has a very high concentration of nonprofits (14% of employment, vs 7% nationally). I’ve even heard it said that the number of nonprofits in Massachusetts has grown to an unsustainable level. Unfortunately, The Boston Foundation’s analysis of more than a decade’s worth of 990 data may support this grim conclusion. More disconcerting than the doubling in the number of nonprofits since 1989 is the trend of revenues not keeping up with spending or even inflation.

After the presentation of preliminary results, there was a lively discussion among the attendees of the possible causes, effects, and solutions to challenges facing this sector. Here are some of the highlights:

• Lack of investment in capacity and infrastructure. (This discussion reminded me a bit of my economic development background and all the debates about what a community needs to be supportive of start ups.)

• Where will the leadership come from (or who is to blame)? Board of Directors? Major funders? Consultants? What about the constituents being served?

• Concerns about the rush to rely on consolidation. Mergers should be done for mission fit, not just financial necessity and nonprofits need to learn to cooperate more effectively.

• A human resources gap is expected as experienced professionals retire. (This one I liked as I’d like to solve that problem for someone.)

• The sector is so broad and complex, how can you make any generalizations about it?

How can you indeed. We'll see what the numbers have to say on June 11.