Wednesday, June 11, 2008

Boston Foundation Urges Fund-Strapped Charities, Social Service Groups to Consolidate

Today's Boston Globe (Safety Nets Stretched Thin) previews the findings of a study set to be released today by the Boston Foundation, the largest funder of nonprofit organizations in Massachusetts.  According to the newspaper,

The report is billed as the most comprehensive portrait yet of Massachusetts nonprofits, a sector made up of more than 36,000 organizations employing 447,000 people and ranging from giants like Harvard University and Massachusetts General Hospital to neighborhood Little League teams and volunteer groups. 

The report is being released as state government and private donors are scaling back their support of nonprofit organizations, even as these organizations' operating costs are escalating.  In light of these circumstances, the study is recommending that smaller nonprofits should pool their resources, forge alliances, and improve their financial stewardship to make their programs more sustainable.

The Boston Globe story continues:

Boston Foundation officials have quietly advocated in the past that nonprofits consolidate to reduce overhead and offset funding cuts, but today's report marks a more formal and public call to action. Some nonprofits already have heeded the call. In a high-profile 2006 merger, the Women's Union and Crittenton, two Boston charities that help at-risk women and families, joined to form the Crittenton Women's Union.

More such mergers might be necessary as the economy worsens. "We have not yet had the kind of draconian cuts we had early in the decade, but it could happen," warned Paul S. Grogan, the Boston Foundation president and chief executive. "That's all the more reason for nonprofits to do the hard work of becoming more efficient."

The truth is, though, that in Boston

Nonprofits have played a growing role both as economic pillars and providers of services to the poor and disadvantaged as dozens of Boston area companies have been acquired and the state government has transferred many community health and youth services to outside groups. At the same time, with the number of public charities in Massachusetts nearly doubling in recent years while the population of the state has stagnated, the foundation's study concludes there are too many nonprofits with too few resources and too short a focus.

The solution would be for the nonprofits to consolidate. 


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