97% of nonprofits operate with less than a $5 million budget, 92% operate with less than a $1 million budget, and 88% with less than a $500,000 budget (link to statistics from National Council of Nonprofits).
This is striking: nearly 90% of nonprofits have an annual budget less than $500k! On one hand, many of these organizations are under-resourced and under-staffed, and they’re forced to duplicate efforts (like fundraising) and work in isolation from others doing similar or complementary work. This resource-scarce reality creates a $500k barrier that 90% of nonprofits are struggling to break through. Small nonprofits often stay small. But on the other hand, some of the most transformational change is happening at the smallest scale, and that change is being championed by people who are making real sacrifices to advance their impact (they’re heroes!). We would know because so many of the organizations we stand beside in our accelerators are trying to break through this $500k barrier, and we’re going to the ends of the earth to help them scale their impact.
The sector would do well to:
- Help organizations break through this $500k barrier of resource scarcity by helping them tap into new funding sources.
- Support mergers and acquisitions between organizations.
- Build coalitions to work together and get funders to fund the coalition.
- Kill zombie nonprofits that are puttering along but are not effective.Note: 25% of organizations in our portfolio are non-profits.