Too Many Nonprofits? Or Not Enough Support for the Communities That Need Them?
In the past two weeks, I've sat in rooms having very different conversations about the nonprofit sector. In one room, funders expressed frustration about the number of nonprofits competing for limited resources. Why are so many organizations doing similar work? Wouldn't mergers be more efficient? Perhaps some "weaker" organizations should simply close.
In another room, nonprofit leaders described growing demand, shrinking resources, exhausted staff, and the increasing difficulty of meeting community needs.
Same sector. Two very different perspectives. As the CEO of a nonprofit that also makes grants, I understand both sides. Funders are inundated with requests, and charitable dollars should be used responsibly. We should expect nonprofits to collaborate, operate efficiently, and demonstrate impact.
But we've become so focused on the number of nonprofits that we're losing sight of why they exist. Nonprofits exist because someone identified a need that wasn't being met.
Duplication Isn't Always Waste
Rhode Island's nonprofit sector is a major economic engine, providing jobs, supporting local economies, and delivering essential services. But its value extends beyond economic contributions.
When nonprofits offer similar services, it may appear wasteful. Yet they may serve different populations, neighborhoods, or cultural communities. One may have deep relationships with immigrant families. Another may specialize in rural communities. Still another may have earned the trust of people historically excluded from traditional systems. Their services may look similar on paper, but their relationships and accessibility aren't interchangeable.
Multiple organizations addressing the same issue doesn't necessarily mean there's too much service. It may mean there's more need than any one organization can meet. We don't question why multiple hospitals, schools, or grocery stores serve the same community. Accessibility, choice, and proximity matter. Why view nonprofits differently?
Redundancy Makes Systems Stronger
In engineering, technology, and emergency management, redundancy is deliberately built into systems. When one component fails, another can maintain essential functions. Our communities deserve similar protection. What happens when a nonprofit loses government funding, experiences a leadership transition, or must suddenly suspend services? Consolidating everything into one organization may create a single point of failure.
Redundancy alone doesn't guarantee resilience. Organizations need coordination and the capacity to respond when another provider struggles. But eliminating organizations simply because their missions overlap may leave communities more vulnerable.
Efficiency and resilience aren't always the same thing. Sometimes what looks inefficient on a spreadsheet makes a community stronger. Collaboration, Yes. Consolidation, Not Necessarily.
Not every nonprofit should operate indefinitely regardless of effectiveness or financial health. Mergers sometimes make sense. Sharing administrative functions, coordinating services, and pooling resources can strengthen organizations.
But these decisions should be driven by community impact, not simply a desire to reduce grant applications. Before suggesting mergers, ask: Whom does each organization serve? What trust has it built? What would disappear if it closed? Would consolidation improve services? Most importantly, have we asked the people who depend on these organizations? A merger that looks logical in a boardroom may have unintended consequences for the community.
These Are Not Normal Times
During COVID-19, I heard someone describe nonprofit funding as "throwing money into a black hole." That characterization stayed with me. At the very moment communities faced extraordinary hardship, organizations keeping people fed, housed, and healthy were being questioned about whether they deserved investment.
Today, we're facing another extraordinary moment. Government funding reductions and uncertainty are destabilizing nonprofits. Economic pressures constrain donors. Meanwhile, community needs persist and, in many cases, intensify. Yet we're debating whether there are too many nonprofits. We're asking the wrong question.
Instead, we should ask how to ensure essential needs continue to be met. That means supporting collaboration without demanding consolidation, providing flexible operating funding, and recognizing that organizational stability strengthens communities. Nonprofits cannot continually be expected to do more with less.
A Call to Those Who Can Give
For foundations, corporations, and individuals with capacity to give, this moment demands more. Consider increasing annual contributions. Provide unrestricted support. Simplify grant applications. Offer multiyear commitments. Foundations might consider exceeding the traditional 5% annual payout requirement.
If duplication concerns you, fund collaboration rather than assuming an organization must disappear. Accountability, innovation, and responsible stewardship matter. But nonprofits aren't interchangeable businesses competing for market share. They're essential community infrastructure.
When a nonprofit closes, the need it addressed doesn't close with it. Those needs shift elsewhere, often to organizations already stretched beyond capacity. The question isn't whether we have too many nonprofits. It's whether we're willing to invest enough in the communities that need them.
These aren't normal times. They call for generosity, trust, collaboration, and recognition that a strong nonprofit sector isn't a luxury.
It's a necessity.
About the Author
Kelly Nevins is a seasoned nonprofit leader with 3+ decades of experience in strategic development, team motivation, workplace equity, and community engagement. As CEO of the Women’s Fund of Rhode Island since 2016, she reports on the status of women and girls, the economic return on investing in women, and how gender-focused systems change strengthens communities.
