The Incredible Shrinking Nonprofit

What Steps can we take to run this place out of business?

A counterintuitive, but powerful question.

Coming from a business perspective, the nonprofit goal of putting themselves out of business can be foreign (It still feels foreign to us). But, in a theoretical extreme, any effective nonprofit would be a shrinking one.

The Holy Grail is pushing the organization out of business because of lack of demand! If it’s effectively and efficiently tackling the problem (and consciously not evolving its mission), the organization should serve an ever-decreasing customer base. Even in the cases of structural problems, this bears out: consider a domestic violence-focused nonprofit providing services so effectively that it no longer has customers. Please note we did say “theoretical extreme” above. But it is happening–consider Out2Play:

Case Study: Out2Play

Out2Play was a New York-based nonprofit organization focused on developing public playplaces for students of public schools in New York City. Started in 2005, the organization has provided 120 playgrounds that serve 80,000 students. The nonprofit is closing its doors in 2012 after receiving stronger support than expected—Mayor Bloomberg’s administration even adopted the cause—and placing playgrounds at nearly all public schools in New York.

We just decided to declare victory and go home. Money is a scarce resource, and there are lots of other good causes out there, so there is no point in hitting up our friends and contacts for gifts simply to perpetuate the organization.

This decision was made at the Board level after evaluating potential alternatives including developing playgrounds for housing projects. Ultimately, the Board decided that a pivot would have required the organization be reinvented from the bottom up—and that wasn’t the best path forward.

Source: The New York Times.

Although out of reach for many nonprofits, in no part due to lack of zeal, these outcomes illustrate a key tenet of the nonprofit world: under the right circumstances, it venerates dissolution. Dissolution is the 501(c)(3) process analogous to Chapter 7 bankruptcy, in private-sector terms (liquidation).

As a professional that worked with “critical assets” (i.e. large loans to companies on the brink of extinction) at a large financial institution, this stands my understanding of “mission accomplished” on its head! But within that disconnect is a powerful mindset.

The next time you or your (nonprofit) organization is faced with an opportunity or a challenge, switch your framework to: “what steps can we take to run this place out of business (in a good way)?”–it just might tweak your outlook enough to brew up some creative, reach-for-the-sky ideas.

Do good. Tackle good.
-Brian

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