These social impact leaders have a lot to say about the life cycle of nonprofits

At least twice a year, we convene local leaders in the local social impact community to get a gauge on the state of the scene (and the role we can play in making it better).

This time around, conversation floated between a conversation that has divided the space on a national level: What should be the life cycle of a nonprofit?

There are “tectonic shifts” happening in the world of funding that are affecting that, said Philabundance founder Pamela Rainey Lawler. Foundations have been “pretty risk averse,” she said, but more and more project-based initiatives are getting funding.

It may be a good idea to have nonprofits have a shorter life span, said Corzo Center Director Neil Kleinman. The 501(c)(3) model, he said, is “flawed” in making a business around the social problem it was created to solve.

“There’s a promise with this 501(c)(3),” said PhillyCAM‘s Membership and Outreach Director Antoine Haywood. It’s a promise of longevity, he said, reminiscing on times local producers have come to PhillyCAM with an idea for a series under the guise of a nonprofit.

“Is that right for you?” he asked. (Some would argue no, absolutely not.)

Norris Square Neighborhood Project‘s Development and Marketing Manager Amanda Morales Pratt said many nonprofits’ life spans will live on in tandem with systemic socioeconomic inequity.

“It’s the life cycle of the social problem,” Morales Pratt said. “A nonprofit doesn’t want to die because they’re concerned their constituency won’t be served by someone else.”

If Broad Street Ministry were to say they wanted to “put themselves out of business,” said Wharton Social Impact Initiative‘s Associate Director of Community Strategy Stephanie Kim, it means “they want to fix homelessness.”

But there are so many factors that play into homelessness — education, economic opportunity, health care. The list goes on. It’s a system.

“The best nonprofits try to put themselves out of business,” said GreenLight Fund Philadelphia Executive Director Omar Woodard. “[But] you can’t do it with just a service. You need a systems change.”

The fundamental difference between a nonprofit and a for-profit, he said, is in leadership. The CEO of a profit-driven tech company will get ousted if the company is not hitting its goals. But nonprofit leaders, he said, will likely stay.

“A 501(c)(3) is still a business,” he said. “That’s the challenge.”