How Nonprofits Get Really Big (2024 Update)

This pair of articles from the Stanford Social Innovation Review make the argument that if you are after sheer size, revenue concentration may be the way to go:

In the 2007 SSIR article “How Nonprofits Get Really Big,” our Bridgespan colleagues William Foster and Gail Perreault identified US-based nonprofits, founded within the previous 30 years, that had reached at least $50 million in annual revenue. Limiting the age of nonprofits in their data to a 30-year span ensured they were able to identify instances where organizations “found their funding model” and scaled relatively rapidly. It also established a clear starting point from which revenue growth could be measured. The data showed that over 90 percent of these “really big” nonprofits “raised the bulk of their money from a single category of funder such as corporations or government—and not, as conventional wisdom would recommend, by going after diverse types of funding.” Conversations with leaders at these nonprofits underlined that achieving scale had required fundraising teams and capabilities that were tailored to the needs of their primary funding sources.

Now, with much having changed in the social sector over the past 17 years, we wanted to know—Did the original findings still hold? This article is based on a new analysis of the 297 US-based nonprofits founded since 1990 with over $50 million in annual revenue in their most recently available audited financial statement or IRS Form 990. We will refer to this group of 297 nonprofits as “all large organizations” below. We also interviewed the leaders of more than a dozen of these organizations to describe our findings and the implications for nonprofits and their leaders, particularly those seeking scale.

Read the original 2007 article. And then read the 2024 update.