Voices from the Third Sector

When Small Meets Big in the Nonprofit Sector: No David and Goliath Ending



In the classic biblical story of David and Goliath, young David, against all odds, conquers Goliath, a massive, astoundingly armored giant, who mercilessly taunted the Israelites. Improbably, the story goes, small overcomes big. Unfortunately, when small meets large in the nonprofit world, the outcome is usually more predictable (though typically less violent). In this arena, increasing pressures to demonstrate outcomes, produce flashy websites and marketing materials, and keep up with the latest trends in technology are burdensome to all organizations. Small nonprofits, with small overhead and small budgets, struggle the most.

This trend has become particularly worrisome in the social services field, where community and neighborhood based organizations have historically been the backbone of efforts to help the poor and sick. Neighborhood based settlement houses, originally established to meet the unique needs of the local community, were a critical building block of the social work profession. In these settings, a heavy emphasis was placed on staff and volunteers becoming immersed in the culture of the neighborhoods. Today, neighborhood houses and small social service agencies continue to operate across the country to meet the varied needs of their communities.  Large social service nonprofits, however, are becoming more and more prolific, and oftentimes the line between these organization’s nonprofit and for-profit wings becomes increasingly fuzzy.

With several hundred staff, and multimillion dollar budgets, agencies of this size and scope are able to offer a dizzying array of services from dozens of worksites across multiple communities.  Often equipped with staff designated specifically for fundraising, they are frequently supported by large endowments and are very successful at raising money from multiple sources. In stark contrast to the smaller organizations, these behemoths can employ marketing and design experts to launch elaborate websites and create glossy brochures. Most large agencies own complex, costly software programs, capable of producing data reports almost instantly. Cushier office environments and often heftier salaries and benefit packages can entice high quality staff and big-name administrators. All of this, in turn, is attractive to funders, resulting in even more money coming in the door.

Small neighborhood-based organizations are forced to look on with wide eyes.

As government funding for social services ebbs, the financial resources of social service nonprofits continue to decline, leading to increased competition for private grants and local contracts. Small organizations are forced to compete with large agencies for pots of money. Requests for Proposals increasingly include requirements for data collection and reporting and have expectations of communications and marketing related activities. These activities require extensive administrative and managerial oversight. Many funders, however, decline to support these activities, limiting their contribution solely to programming and direct service expenses only. This immediately puts small nonprofits at a serious disadvantage.

Most will agree that social service organizations must be held accountable for their work, as all industries must. Years of hard work, and billions of dollars of money have not resulted in significant improvements in the lives of the poor and the sick. The need for supporting organizations that are effective is perhaps more critical now than ever before.  Similarly, communities can benefit from large, sophisticated nonprofits, in order to have the capacity to compete with other parts of the country for large federal grants. But leaving behind the organizations that have supported our neighborhoods for decades, in place of large, multimillion dollar nonprofit conglomerates may not be the answer. An agency’s inability to provide outcome data due to insufficient technical capacity doesn’t necessarily equate to ineffective services. Similarly, glossy brochures, swanky offices, and impressive web designs won’t make our poor less poor, or our sick less sick.

Cultural awareness, institutional knowledge of a neighborhood, and community trust is key to reaching at-risk populations. What do we have at stake as a society as human services become less localized and more supersized? Unfunded mandates around data collection , technology use, and marketing capacities has lead the process of competing for funds a lot like David meets Goliath. The result, however, will be decidedly different.

Read more from Rose on challenges facing the social work profession here or at www.communitysolutions.com.


Rose Frech, Community Solutions

Image: CommunitySolutions.com

Rose Frech is a Policy and Planning Associate with The Center for Community Solutions. A licensed social worker, Rose most recently spent several years focused on supporting low-income children and families, through work as a system coordinator, program manager, counselor, and home visitor.


  • Renate Jakupca

    2014 Pragmatic Peace Paradigm for 2114

    ARK in Berea - This Pragmatic Peace Paradigm from the International Center for Environmental Arts
    addresses areas where Peace Agencies working together may be able to
    achieve greater efficiency and effectiveness in the real sense across
    boundaries, cultures, societies and nations to build the new sustainable
    Culture of Peace Movement for All Living Things (ICEALITY). Within
    these areas are growing zones of fragmentation, overlap, or duplication
    where multiple agencies and activities are creating waste and
    inefficiencies. Although at times, it may be appropriate for multiple
    agencies or entities to be involved in the same programmatic or policy
    area due to the nature or magnitude of the Peace effort, there are many
    areas where opportunities exist to achieve resource savings and achieve
    financial benefits.

    To address the issues identified in this
    report, Ambassador Renate says, being more realistic, will lead to
    better results. “If we would pick just one or two things, we can cut
    out a lot of the clutter and divided attention and actually experience a
    little transcendence and success, which is really what, according to
    the Iceality Methodology, drives humans to repeat good behavior over
    all,” she says.

    Full Story: