How Nonprofits Are Set Up to Fail: Ghosts from Our Pre–Colonial Past

By Steven E. Mayer, Ph.D

A favorite maxim of mine is that “the fish will be the last to discover water.” We fish can’t easily see the big ocean of complex currents that we’re all swimming in, forces which produce barriers and stumbling blocks that limit our strength and hinder our progress.

If a nonprofit organization is to become stronger in pursuing its mission, it must get stronger in all the essential areas of nonprofit performance – not just Program but also Administration, Community Connections, and Resource Development.  I detail those areas of organizational capacity in a post, a simple framework for understanding nonprofit organizational capacity

My message of the importance of building nonprofit organizational capacity is supported by just about everybody, especially such leadership organizations as National Council of Nonprofits and Grantmakers for Effective Organizations. It’s embraced less so by small nonprofits wanting only to do Program Now and feel greatly put upon by the powers that be.  “Just give us the money and get out of our way,” they say.

A closer look at “the powers that be”

Nonprofit organizations as well as grantmaking foundations make up what is ironically called the “independent sector.” This is to distinguish it from the private sector (business large and small) and the public sector (government large and small.)

I say “ironically” because the independent sector isn’t independent at all but is quite dependent on those other two sectors for its legitimacy, revenues, and much of its agenda. This agenda includes a plateful of social problems that business left behind as too cost-ineffective or inconvenient to deal with. It’s the same agenda that the public sector has neither the will nor the means to address.

This blog post is not the place to detail the list of problems or shortfalls created by those two sectors, or to take valuable time documenting what you already know about conditions in your own areas of concern. I assume I’m talking here to those who want to put their best feet forward and help solve social problems. I’m talking in particular about challenges we face in trying to respond productively to the many calls for action that we hear, including the challenges we face in building strong, effective organizations for doing the work that no one can do alone.

A favorite maxim of mine is that “the fish will be the last to discover water.” We fish can’t easily see the big ocean of complex currents that we’re all swimming in, forces which produce barriers and stumbling blocks that limit our strength and hinder our progress.

Nonprofit corporate structure seen through a historical lens

Now that more and more nonprofits and foundations find themselves crosswise with people of non-European descent, there is greater attention paid to the guiding principles of how nonprofit and institutional philanthropy organizations work. Like fish discovering water, we’re seeing operating assumptions that are highly culture-bound. One hears increasingly that the sector is “colonial” in attitude and runs in the exploitative style of a plantation system.  If so, this would explain why the two dominant sectors would have little interest in letting their supplicant grantee organizations get stronger. At the least it would explain their lack of inclination to trust their impoverished and increasingly frustrated charges to know what needs to be done to advance their cause. “Got to keep them down, while pretending to care,” one can almost hear them say.  Fortunately, pushback is here. Players in the nonprofit world are demanding the resources to grow and become stronger so they can better do what their missions call for.

While we can see mini-trends in philanthropic giving towards a more genuine wish to help nonprofits be more productive and to show more progress in their mission fields, old habits of giving die hard. Said to be “colonial,” the basic structure for philanthropic or nonprofit organizations is even older, originating not in 1919 or 1819, but in 1619 or 1319 or older, as is the donor-donee relationship. 

Contemporary top-down authoritarian structures derive from Medieval European church and state structures, which in turn derive from the Roman Empire, which at its height stretched across much of the world that sent willful immigrants to North America – the green area shown in the image above.  This mind–set, whether called “colonial,” “corporate” or “white” is largely concerned with how to make things happen through an organized group effort controlled from the top by those with authority who expend as little of their own resources as possible while raking in as much as they can walk off with.

While probably all cultures know from their own experience that groups can make things happen that individuals cannot do alone, different cultures have different methods or styles for making organized work happen.  In the US, European–oriented strategies have prevailed, for better and for worse, ever since Europeans claimed these lands as their own and took over. Changing those ways and mind-sets isn’t easy, especially if one doesn’t even want to see how we got to this moment in history. While many say they don’t want to be a colonialist exploiter, those same many don’t resist the force of habit and culture.

Am I right in thinking no one would dispute this, or do I really need to cite some references? Here’s a good one: Barbara Tuchman’s A Distant Mirror: The Calamitous 14th Century. It’s long but readable, informative, skippable, and sprinkled with subtle snark. You really can see back to the 14th century from here, especially the origins of almost all our contemporary institutionalized ways of doing things right here in deepest, darkest, outer Medieval Europe.

Later corporate structures were modeled on both military and church structures, at least originally. They’ve diverged, and corporate entities have shown considerable abilities at innovation, managing large projects and building wealth where and when they want and, as they would say, “getting things done.”  I once heard the wise Vietnamese teacher Thich Nhat Hanh say, “You Westerners are good at building organizations, we’re good on the spiritual side of life, let’s get together…”.

In similar ways, nonprofit organizational structures are modeled on the corporate structure of the early 20th century, and since then have been largely stuck in their ways. They haven’t been given (or they haven’t taken) the permission or resources to respond directly to the same situations that give corporations their flexibility. Nonprofit as well as foundation board seats are increasingly held by executives from the corporate sector; too often they act as hobbyists or brakemen rather than enablers of creative and productive progress. 

Adaptation and disruption, lauded as values by the corporate sector, is not admired or supported in the nonprofit sector. Philanthropic funders do precious little in support of expanding the mission-related capacities of nonprofit organizations.  Why? Perhaps in fear they might lose control. Actual success in mission work is as unanswered a question as ever, and the evaluation models for showing success are hopelessly antiquated, rooted in early 20th century management and science.

An updated call to build nonprofit organizational capacity

Meaningful support – a big push – for building nonprofit organizational capacity has yet to see its day. Fortunately, breakthroughs are happening in a number of arenas affecting the performance of “the independent sector.”

  • “Advocacy” is now recognized as lawful work for nonprofits. We can thank the formal organization Independent Sector for its own advocacy toward this end in the early 2000s. With this recognition, network- and coalition-building to support policy and system change can proceed.
  • Attention is now paid to “racial equity and social justice” as a legitimate focus for philanthropy, with sometimes meaningful financial support from grantmaking foundations and individual donors.
  • Awakening among the public to the horrors of police brutality, slavery, racism, and our nation’s participation in such evils, allows us to heed the growing calls to repair it.

These events each contribute to a push away from our Medieval European history and can provide meaningful and plentiful work for the Private, Public, and Independent sectors.  Still to come, we hope, is greater support for building nonprofit organizational capacity evermore capable of pursuing urgent missions.


This blogpost was published in an earlier form on this website on June 21, 2021. 

How to cite this blogpost: Mayer, Steven E., How Nonprofits Are Set Up to Fail: Ghosts from Our Pre-Colonial Past  Minneapolis: Effective Communities Project. Downloaded from [month, date, year]