In Oregon’s social impact sector, a challenging reality is emerging: the time has come to reconsider the necessity of establishing more nonprofits.
While many might believe that an increase in organizations translates to enhanced community service, the current landscape indicates otherwise.
The shrinking federal budget has significantly impacted nonprofit funding, and this trend is amplifying the scramble for resources within the sector.
As federal grants diminish, local governments, foundations, and individual donors are being tasked with covering the increasing shortfall, putting tremendous strain on local funding sources.
This situation has resulted in a fragmented ecosystem where nonprofits are persistently underfunded and overextended, leading to a deterioration of meaningful community support.
The warning signs have long been apparent.
Reports have revealed that even before drastic funding cuts began under the Trump Administration, numerous Oregon nonprofits had already laid off employees and reduced operations.
With the ongoing decrease in federal grants and contracts, nonprofits are now vying for a shrinking pool of resources, resulting in a climate of fierce competition rather than collaboration.
Currently, hundreds of nonprofits in Oregon share overlapping missions, duplicating efforts, and scrambling for the same limited funding, while their communities continue to experience unmet needs.
What Oregon requires now is significant, unified action, shifting away from siloing efforts towards fostering connections and promoting community-focused solutions.
The urgency for this collective action is heightened by Oregon’s status, which has one of the highest per capita rates of nonprofits outside of New England, according to IRS data.
While this reflects a strong community-oriented spirit, it also fosters inefficiency across the sector.
From Portland to Pendleton and Phoenix, nonprofits frequently operate in isolation, competing for critical resources, expertise, and personnel.
Rural organizations are disproportionately affected, often under-resourced and unsupported, left to fill service gaps that should instead be addressed through systemic changes.
Challenges such as education, health equity, housing, reproductive justice, and climate resilience exemplify the need for coordinated efforts.
Imagine a scenario where Oregon’s nonprofits collaborate more intentionally, merging missions where feasible, pooling administrative costs, and prioritizing impactful community solutions over individual organizational egos.
Such collaboration could empower Oregon’s communities, particularly those most distant from opportunity, enabling them to create a more robust future for the state.
In this crucial moment, philanthropy and foundations in Oregon, including the Women’s Foundation of Oregon led by Libra Forde, must take an active role beyond mere financial contributions.
They must engage in proactive leadership to facilitate the unification of struggling, sunsetting, or duplicative nonprofits, creating clear pathways to collaboration and strategic mergers.
Rather than allowing organizations to resentfully dissipate, we should honor their original missions and ensure their legacies endure through unified efforts.
Often, nonprofit mergers are viewed as failures, yet they should be regarded as strategic opportunities.
When executed thoughtfully, mergers can lower overhead costs, deepen community impact, and provide a more consistent and coordinated response to needs.
Models such as shared services, backbone organizations, and collaborative leadership are not just theoretical concepts; they are effective practices that warrant scaling across the sector.
Today calls for unity amidst adversity rather than perpetuating division.
We must transition from a survival mindset to one of system-oriented thinking.
Rather than contemplating how to simply keep individual organizations afloat, we should focus on how various missions can flourish, whether in their current formats or in coalitions.
Communities deserve better than strained leaders managing underfunded initiatives.
They deserve sustainable ecosystems of care capable of withstanding the test of time.
Philanthropic institutions and foundations must support this transformative shift.
It’s time to halt the proliferation of nonprofits and initiate the construction of collective power.
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