Nonprofits Under Pressure: Merge or Die

The recession is ravaging the nonprofit sector, forcing many to consolidate or disappear, even as demand for their services rises. Over the past 15 years, the number of registered nonprofits doubled to 1.5 million organizations. Now, as funds dwindle—private donations fell 6% throughout the sector in 2008, their biggest drop in more than 50 years—many fear there are just too many groups, the Wall Street Journal reports.

To compensate, many groups are merging. “Leaders need to look beyond their organization and focus on the mission,” says the head of one group that rewards charities for collaborating or consolidating. But like any merger, nonprofit mergers can be painful. “When a Starbucks closes, customers may just have to walk further for coffee,” says the head of the National Council of Nonprofits. “But when a nonprofit fails, there might not be another homeless shelter.” (More nonprofit stories.)