With over 1 million nonprofit organizations competing for a very limited amount of money from funders, individual and governmental, the ability to acquire financial resources is important for their sustainment. My previous blog discussed the implications of an organizational theorists’ perspective in regards to a nonprofits accomplishment of its mission. As they contend, nonprofits that “complete their missions necessarily create new ones” (Fernandez, 2008, p. 2008). As highly bureaucratic organizations, led by individuals with vested interests, perpetuation of nonprofits through mission reinvention creates financial dilemmas which may be a potential source of exasperation, both internally and externally. This view is particularly observable from a resource dependency viewpoint. As Fernandez maintains, “organizations can only persist if they can maintain an incoming flow of resources. (p. 117). Therefore, with an overabundance of competition for money among nonprofit organizations, mission accomplishment and the subsequent dissolution may not be such a detriment after all.
Nonprofit mission reinvention consequently dissuades the evolutionary transfer of funding from one nonprofit organization to another. This is due to a second tenet set forth by resource dependency theorists.. That is, survivability is determined by the ability of organizations to “secure the dependence of other organizations on them.” (Fernandez, 2008, p. 117) This interdependence, once securely in place, is difficult to interrupt. As a result, nonprofits funding opportunities that would have been created by another’s dissolution vanish. In other words, funding opportunities would have been created had a nonprofit that fulfilled its mission simply ceased its operations. Those funders who were released of their financial obligations could have been potential sources of funding for either established nonprofits or newly created nonprofits.
As a nonprofit nears completion of its mission, it may experience reluctance on the part of funders to commit to financial support. Nonprofits that were once perceived by funders as having significance to the populations that they serve, are now viewed to the contrary. Nonprofits will themselves experience reluctance in pursuing certain types of funding. Securing public or governmental funding is viewed as a complicated, resource consuming process; one deemed as “not worthwhile” by a dissolving nonprofit organization.
A nonprofit’s resultant dissolution due to mission accomplishment creates a momentary void in the funding domain of the sector. It is only momentary due to the ever increasing population of nonprofit organizations as it is estimated that 30-50,000 new nonprofits are created each year. It should not be overlooked that this void is also created by organizations that dissolve due to other reasons besides mission fulfillment.
Fernandez, Juan. Causes of Dissolution Among Spanish Nonprofit Organizations. Nonprofit and Voluntary Sector Quarterly. 2008. 37; p.113-37. Web.