We in nonprofits are good at taking on myths and sacred cows. But perhaps the least examined of these myths is the one about "going to scale." This OpEd takes a closer but brief look at the conventional wisdom in this area:
Myth #1: Nonprofits don't go to scale (get a lot bigger) because they lack the vision or the ambition
The reality here is that the dominant capital markets for nonprofits -- government and foundations -- actively work against nonprofit growth.
Regarding foundations, the common funding policy of "one smallish grant per organization per year" means increased volume doesn't lead to larger foundation grants. In fact, when nonprofits grow, many foundations become less interested in them. A commonly stated reason is "we want to feel where our size grant can really make a difference" . . . which often translates to: "we feel better funding organizations where we are one of their most important funders."
Government -- overall the biggest funder of nonprofits -- is not only the biggest engine for growth but also the biggest barrier to growth. Most community nonprofits . . .