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How Nonprofits Get Really Big
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William Foster and Gail Fine
This article appeared in the Spring 2007 edition of the Stanford Social Innovation Review (SSIR).
Between 1970 and 2003, 144 nonprofits went from founding to at least $50 million or more in annual revenue. While this is a small percentage of all the nonprofits started during this period, it’s a larger number than is generally perceived. How did these trailblazing organizations achieve such substantial growth?
- They focused their efforts on funding in one concentrated area. Casting a wide net may seem like a logical approach; but in fact, most high-growth nonprofits had a single dominant funding source, which accounted for just over 90 percent of their total funding.
- They found a funding source that was a natural match to their mission. Corporations, for example, almost always offer in-kind support focused on hunger or health issues. Far from being random, large funders’ interests often fall into distinct categories.
- They built a professional organization to support their chosen funding model, for example, bringing in people with expertise in areas like marketing or logistics. For many organizations, this step marks an important cultural shift.
Growth is not the right answer for every organization. But for those that do want to increase revenues substantially, understanding the paths that others have blazed over the past four decades may increase their odds of success.
To download the full article from the SSIR website, please click here.
Profiles of High-growth Nonprofits
(Grouped by dominant funding source)
Government
Individuals
Corporate
Service Fees
No Dominant Source
For William Foster's podcast interview on this topic, please visit SSIR's Social Innovation Conversations site.
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