Make a Difference
Wednesday, December 23rd, 2009
pic from Ben Heine
Regardless of size, every non-profit organization needs the ability to do some basic administrative functions, such as human resources, accounting, purchasing, and auditing. Larger non-profit organizations (defined by me as having greater than $3.5 million in revenue) are able to achieve economies of scale in many of these areas, allowing them to spend a smaller percentage of their overall income on administration and more on direct care. Non-profits generally begin to gain this benefit by expanding to offer a wider cross section of services across multiple communities. For small non-profit organizations, they are unable to benefit from such economies of scale. Rather, they tend to excel in treating a small, focused segment of one community very intimately for their cause. Simply put, they subscribe to the theory of quality over quantity to the cause. Smaller nonprofits also have a tendency to be more passionate or driven by faith vision to donate their time effort and own funds to the cause. Thereby, every donation brings them to want to do even more with what donors give.
Nonprofits that have too much money do not always make wise choices.
