It is counterintuitive to be gleeful at the closing of an organization’s doors and cessation of its operations. Some believe that such occurrences are certainly objectionable for the for-profit and government sectors as they argue that the adverse impacts of dissolution are extensive. Nonprofit organizations on the other hand endeavor to hang the “out of business” placard on the front door. That is, if the reasons for ceasing operations are due to mission fulfillment rather than the organization experiencing its demise due to some unfortunate or unfavorable circumstance.
Certainly we all would like to see certain nonprofits close its doors because they have fulfilled their missions. A few that come to my mind immediately are the Juvenile Diabetes Research Foundation, the American Cancer Society, the Muscular Dystrophy Association, and Susan G. Komen for the Cure. As much as we hope that these organizations will find cures for the diseases they were established to combat, their dissolution due to mission fulfillment appears to be unwelcome among the organizational theorists. Lending to the reasons is that these organizations have become regarded as highly legitimatized. Their legitimacy is secured by the perception that they are “too big to fail,” similar to some for-profit organizations who have just recently come to the brink of their own death. Organizational theorists put forth the idea that nonprofits that are persistent are recognized as being successful; and those that are dissolved are considered failures. (Fernandez, 2008, p. 124) For that reason, I believe that this theory has limited applicability because an organization’s dissolution is solely connoted with failure. In order to avoid the negative connotations associated with dissolution, organizational theorists would require these organizations to reinvent themselves with new missions and continue operations. But why should they if they set out to accomplish a specific mission only?
Consider the following nonprofits organizations featured in a recent New York Times article. Malaria No More, a 501(c)(3) organization, provides bed nets to persons living in malaria zones with the goal of ending deaths due to malaria. Due to its perceived success thus far, Malaria No More expects that it will which reach its goals by the year 2015, therefore ending its operations. Out2Play, a nonprofit organization established to construct playgrounds at New York City public schools, similarly plans to cease its operations. With over 120 playgrounds installed as of the time of the article, the executive director of Out2Play explained that they were simply running out of locations that needed their services (Strom).
For reasons similar to those stated above, these organizations are unjustly considered as failures by organizational theorists simply because they accomplished their mission and have decided to cease operations. No consideration is given to the good that they have done, let alone the fact that they accomplished the mission for which they set out. This thought certainly raises the question; is there room in organizational theory for these two organizations and those similar to them to be considered as successful? There very well may be according to Juan Fernandez in his article Causes of Dissolution Among Spanish Nonprofit Associations. Fernandez explains that because net earnings cannot be distributed to any private individual, dissolution due to mission completion is much easier for nonprofit organizations than for-profit organizations. (p.125) Unlike the for-profit sector, which can never really fulfill its goal of earning profits for its stakeholders, the nonprofit sector sets out with missions that are accomplishable.
But does this apply to all nonprofit organizations? Unfortunately, it does not. Those nonprofits identified as being large are also heavily bureaucratic. Being so means that board members often have “intense vested interests in the survival of the organization.” (Fernandez, 2008, p. 125) With such interests, dissolution due to mission completion is not possible. Instead, these nonprofits would be expected to reinvent themselves with new missions. Smaller nonprofits, such as Malaria No More and Out2Play, on the other hand are not held to such bureaucratic stipulations. Therefore, Fernandez contends that smaller nonprofits “that completed their missions should have a lesser capacity to generate convincing alternative frames of action” (p. 125).
Having declared missions that may be accomplished, and having accomplished those missions, there really is no reason for Malaria No More and Out2Play to continue their operations, so they believe. Some may argue that these organizations must persist; continuing operations in order to provide services such as maintenance of the bed nets and playgrounds. Those are null arguments for these organizations because by their own right, they chose not to include those tasks as part of their missions.
Organizational theory introduces quite the quandary; that dissolution due to mission accomplishment is automatically associated with failure, but is more acceptable for smaller nonprofits than those considered as being large. This most certainly introduces a double standard within the charitable sector; one that can certainly be a source of discontent among funders and board members alike.
Fernandez, Juan. Causes of Dissolution Among Spanish Nonprofit Organizations. Nonprofit and Voluntary Sector Quarterly. 2008. 37; p.113-37. Web.
Strom, Stephanie. “Mission Accomplished, Nonprofits Go Out of Business.” New York Times. 1 April, 2011: Web. 9 June 2011.