A group of nonprofit scholars has recently published “Diversity in Nonprofit Entrepreneurship,” a research article through Independent Sector to discuss what we currently know about the factors that influence the creation, growth, and survival of new nonprofits. More importantly, this paper discusses what else we need to know and the data we need to have in order to better understand and address the unequal opportunities that exist in creating nonprofits.
A recent Urban Institute report found that at least one-fifth of nonprofit executives and board chairs are people of color, and people of color serve on most nonprofit boards. However, there is much we don’t know regarding the (mis)alignment among nonprofit activities, minority entrepreneurship, and disadvantaged communities. Does the current ecosystem for nonprofits allow people of color to develop innovative solutions that could help address many social issues that they experience and understand?
For example, women of color are overrepresented in caregiver roles, especially in healthcare and childcare, but they are severely undervalued and underpaid for this work. Even though many of them do not have adequate wages or benefits, these women do not have enough time to raise awareness of these issues, discuss them in public spaces, or advocate for their rights.
Classic nonprofit theory states that nonprofits are created to address unmet social needs and diverse preferences, while current research supports a positive association between local nonprofit density and individual well-being. New nonprofits also create new employment opportunities and drive social innovation. Even so, some say that the nonprofit sector does not need to add new organizations to be vibrant; it just needs existing nonprofits to be bolstered in some way. There are even calls for more mergers and collaboration amidst constrained resources. Still, many support the view that the nonprofit sector can stay vibrant only if it continues to allow entry by new entrepreneurs who, in turn, bring new ideas that are then tested and re-tested in market conditions.
Equal access and opportunity in creating new nonprofits provide avenues for entrepreneurial activities responding to diverse needs. Thus, the discussion about how to bolster the vibrant and innovative nonprofit sector must involve everyone who has the access to create new nonprofits addressing unmet needs and examine disparities affecting nonprofit entrepreneurs of color. Furthermore, understanding which newly established nonprofits survive or fail can have implications for how public funds are utilized, especially in terms of equity. Unfortunately, many nascent nonprofit entrepreneurs falter before reaching the start-up phase. It is important to understand whether specific types of entrepreneurs are encountering systemic barriers that prevent good ideas from coming to fruition.
Having a better understanding of the factors that promote a strong nonprofit entrepreneurial process can encourage funders and policymakers to support smaller, newer, and BIPOC-led nonprofits for increased successful outcomes. Nurturing new nonprofits will promote innovative nonprofit programs that benefit their communities. Understanding such factors can also enable funders and policymakers to help unsuccessful or less impactful programs exit the market more quickly. A strong entrepreneurial process will support successful ideas and resilient nonprofits, and we encourage readers to check out this research paper to learn more about what we know and what else the sector needs to understand to create a vibrant nonprofit sector.
Dr. Mirae Kim is the visiting scholar at Independent Sector. She is an associate professor of Nonprofit Studies at the Schar School of Policy and Government at George Mason University.
