Every year a certain number of non profits are registered in the US. As the visions of individual who have a desire to see the livelihood of a people be improved or changed grows so does the number of non profits.
Since 1996 the number of groups classified under sec 501 (c) (3) of the IRS code has increased by 81% from more than 654,000 to 1.2 million. This may be an indicator that the gap between the rich and the poor is increasing, as the needs are being met by the non profits. As the economy continues to shrink, a new non-profit may be registered to fill in the gap so as to meet the needs of the poor.
Foundations have significantly increased in the last 15 years. According to available data, the Foundation Centre shows an increase from 39, 000 in 1994 to 75,000 in 2007. An indicator, that the numbers of individuals who have had an increase their wealth also have a desire in sharing part of it, supposedly for a good social cause.
As the number of non profits increase the competition for the few resources available to them becomes scarce. As the demand for more grants from the few foundations and corporations increases, the rules of restrictions also become more and more complicated and cumbersome especially for small non profits.
Would it therefore be wise to have a merge for some non profits so as to increase the synergy? Would this improve the missions and increase efficiency in the spending of the restricted dollars which are now scare in today’s economy? Mergers of corporations in the “for profit world” has seen the enormous growth of banks like Citibank and Bank of America. Non profits with similar missions can be merged to compete for these scarce resources and hopefully increase efficiency. This may hopefully reduce the work of the lending foundations and corporation in determining who get the funding from a smaller pool of applications.
This is the time that the corporations need to be more generous and less strict in their restrictions on grants. While the grant making processes are rigid and the reporting tedious, the time to reduce this restrictions is now when the economy is down since most of the non profits need more funds to meets the ever increasing needs. As the rate of unemployment goes up so does the increase of homelessness, debt management services, food stamps and need for clothing and shelter. Winter will be so difficult for some of the people that many corporations need to rise up at this time to meet the demand.
Should we allow the market forces to weed out the excess non profits who cannot endure due to a lack of unrestricted funds though they may be doing tremendous good in the society? Or should we change the rules of engagement to so that the market forces do not weed those non-profits that we need most, even though they may not have the funds?
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