People have been asking for a while now whether there are too many charities—either too many focused on accomplishing the same things, or too few able to prove social impact.
But now, as the nonprofit charity sector enters its third year of steep declines in donor dollars, a new question is dominating the conversation: are traditional, middleman charities—whose purpose has been to raise money for various causes and spend it as their boards see fit—becoming obsolete?
To be sure, Establishment charities aren’t just struggling for new dollars in this recession. They’re also scrambling to regain credibility amid years of chronic waste, fraud and abuse dogging the sector. Traditional charities also are being pushed hard, to reinvent themselves amid new competition from Web-spurred advocacy networks and the rise of new “sector-agnostic” mass activism initiatives, including new social enterprises. For some time now, philanthropy thought leaders have predicted that unless traditional charities fundamentally reinvent themselves as aggregators and issues experts—and retool their funding models—they could die trying.