Recession forcing nonprofits to merge and close

The Wall Street Journal recently published an article regarding the impact of the recession on nonprofits which I found fascinating.

WSJ Article: Recession forces nonprofit mergers, closings

It's a triple whammy:

1. Foundations have had to cut back on grants because the investments which are their revenue sources have performed so badly that they need to preserve principle.

2. Government funding has been slashed due to budget cuts and attempts to reduce spending.

3. Individuals have had to cut back on giving due to..yep, same reasons enumerated above.

While charitable giving in response to the earthquake in Haiti has been incredible, natural disasters have typically resulted in a short-term spurt in giving which sometimes has long-term negative implications for non-humanitarian organizations which do not benefit from those donations.

The article speculates that the economic prosperity of the last few decades has generated an excess of nonprofits. Hmmm...now there's something worth considering.

To prove this point, here's a test. Which of the following organization(s) is a made up name?

1. The National Breast Cancer Coalition
2. The National Breast Cancer Research Center
3. National Breast Cancer Foundation
4. Breast Cancer Fund
5. Breast Cancer Action Network

How about if I told you none of these? Yes, these are ALL nonprofits whose mission relates in some way to breast cancer, either research, patient advocacy or patient services. All of them various levels of management, be it a president, vice president, often multiple VPs of development, marketing, events, communication, and so on and so forth.

How much further would we be in the fight against breast cancer if some of these joined forces, pooled their dollars and focused their research?

Now, I am not advocating that the government should stop issuing 501(c)3 status to anyone who wants one. I am not advocating that any organization be mandated to join forces with others. But I do have a thing for Darwin:

Survival of the fittest, baby.

That's why it's so important that to survive a charity make compelling reasons why donors should support them. That they show donors in tangible ways how those dollars are fulfilling the mission, are being put to good use and not being squandered. That's why trust in an organization is key.

Just like in the rest of the business world.