The New Nonprofit World: Farewell to the Little Groups

Last Thursday the IRS finally published the list of non-compliant nonprofits. Those are the organizations that have – despite repeated requests from the IRS – not submitted their Form 990s. And presto, the nonprofit world in the US has shrunk by 275,000 organizations. You can go to the IRS site, tab to nonprofits, and download the list by state, either in PDF or Excel. Or you can go to Guidestar and for a small fee download the whole bit.

I took the time to download a cross sample of states, and the finding that has immediately leaped off the page at me is how our concept of nonprofit community groups will change, fundamentally, with this clean-up. Gone are thousands of small fraternal and veterans groups. Gone, too, are hundreds of local sports leagues, youth booster groups, on-again-off-again theater troupes, and others that have been a part of nearly every community in America. Veterans groups, gone. Women’s groups, gone. Religious-affiliated civic groups, gone. Reading the list is like reading our history, and a whole lot of America has vanished.

I know that the vast majority of these groups haven’t been functional, and I know that cleaning up the non-profit rolls has been long overdue. But I mourn at the ever-so-vivid loss of the small little groups that once really was the fabric of care, compassion, outreach, youth, and culture in towns, neighborhoods, and cities across our country. This really does show that groups can be too small to live, too small to be a nonprofit. We’ve tipped. Something fundamental has happened. Yes, it is possible for some of these groups to wake up and come back to life, but I doubt many will.

As I look ahead to what is an almost inevitable movement to lower the deductible amount allowed for charitable contributions, possibly to less than 30% of the contribution, I wonder how many more groups will be added to this list. The IRS is reportedly rolling out more and more groups onto this list every month, and when incentives for charitable giving drop for practically every American, you can bet that many more small groups that lack the fundraising expertise, the circle of donors, and the marketing clout to get their message out will find themselves on this list.

We may be heading into a next generation nonprofit world, in which small ventures – joining together with your neighbors to form a youth sports league, for example – no longer works. In which the dancer/choreographer with a unique vision and aesthetic is unlikely to form a new company from scratch. In which the after school arts program is less likely to form. In which the civic groups who raise a few hundred bucks by selling hotdogs at the high school football games to be able to give that money to local needy, will be less and less a part of our life.

I remember interviewing a state legislator a few years back in the process of doing a cultural development plan. He had one bottom line: close the gates to any new nonprofit start ups. Get rid of them, he said. They are a menace, a problem. They all come looking for money.

But here we are, with a government that needs to rid itself of services and needs a lot of services privatized – logically the ranks of what is now 275,000, and counting, fewer nonprofits. The good news for those that continue to exist is that there is a ton of work to do out there. And the good news is that there will be more room for smart entrepreneurs to license the hotdog stands and do the recycling and pick up the trash on the side of the highway and the countless other things that small nonprofits have done for decades. But I’ll miss them, that part of all of us that has made us believe in the American way of giving and helping and caring and doing in 275,000 small, unobtrusive ways. Won’t you?

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