Who Decides? The Wrong Standards for Nonprofit Survival

Aug 20, 2025

The latest from David Callahan, There Are Too Many Nonprofits. What’s the Solution?, is a reminder of what it sounds like when a generation of nonprofit leaders forget why we exist in the first place. He, like many whose professional careers began during the peak of the neoliberal era, wants to hold the sector accountable to the wrong standards — those of the market.

The problem is that once scale and efficiency become the primary measures of value, care, trust, and belonging are immediately disqualified as wasteful. And now, as Callahan points out, we are moving into leaner times. If market logic remains our governing measure, the very qualities that make nonprofits essential will look like liabilities at the moment they are most needed.

The Wrong Frame

The first danger in Callahan’s argument is the frame itself. When efficiency and scale are assumed to be the primary standards of legitimacy, then what makes nonprofits most distinct, our ability to respond with care, belonging, and reciprocity, will always appear as inefficiencies that can be eliminated.

This is why so much of the sector’s energy has been wasted on overhead debates and endless attempts to justify ourselves in market terms. Once the measure is borrowed from the marketplace, the contest is already lost. You cannot win an argument for relationship, trust, and human dignity on a balance sheet that was designed to measure cost-efficiency.

Callahan nods to the upsides of diversity in nonprofit ecosystems, but his prescription still treats it as duplication to be eliminated. What looks like redundancy from a distance is often what makes civic life resilient. The patchwork of small organizations is not a bug but a feature. It is the sector’s way of responding to human need in particular places with particular care. By treating efficiency as the standard, he risks flattening that diversity into something streamlined but fragile and unable to respond to local needs.

Funders as Arbiters

As my friend

T. Clay Buck

put it, “Who decides?”

Buck recalls being asked the question every fundraiser knows by heart, especially from family foundations: “How are you different from the other groups doing the same work?” On paper, organizations appear interchangeable. In practice, the subtleties in philosophy and tactics can mean everything.

Buck describes his time on the board of a housing organization that was routinely turned down for grants with the advice: “You should partner with or become part of other housing organizations.” The trouble was that this particular group specialized in serving people living with HIV. They were an agency of last resort when everyone else had turned clients away. From a distance, it looked duplicative. On the ground, it was the only door still open.

As Buck observes, funders are often well-meaning and intelligent, but they are not embedded experts in these niches. Their vantage point is efficiency, not relationship. And when they become the arbiters of survival, the particularities that make nonprofits indispensable are erased in the name of streamlining.

No Regulators, No Safeguards

In the corporate world, mergers and acquisitions at least pass through regulatory oversight. However imperfect, there are mechanisms in place to weigh not only shareholder value but also the potential harm to competition and consumers. The point is that there is, in theory, a mediator between private interest and the public good.

No such safeguard exists in the nonprofit sector. When a funder pressures a small organization to merge or fold into a larger one, there is no regulator to ask whether a community will lose something vital in the process. There is no mediator to ask whether the specialized knowledge of a “duplicative” group is in fact irreplaceable.

Which means decisions about nonprofit survival are left entirely to those who control capital. And, when the logic of efficiency reigns unchecked, whole communities can lose access to the very care they depend on — not because it was unnecessary, but because it failed to appear valuable from a distant, managerial point of view.

The Shared Logic of State and Market

It would be a mistake to think this danger comes only from funders. The deeper problem is that both the market and the state operate from the same premise: decisions about survival belong to those at the top.

The market enforces this through efficiency and capital flight. Organizations that cannot prove scale or growth are written off as unworthy. The state enforces it through subsidy, regulation, and bureaucracy. Groups that do not fit the categories of compliance or contract deliverables are denied access to public resources.

For a long time, government subsidy masked this reality. As long as public money was plentiful, nonprofits could afford to flatter market logic without actually living by it. They seemed to be competing in an open field, but in truth their foundation was secured by government support. That cushion allowed a generation of leaders to forget what the sector was for because survival did not depend on remembering.

But as subsidy retreats and fiscal austerity sets in, the mask is slipping. The logic of state and market now shows its teeth. Our sector has been steeped in these assumptions for so long, and with so little questioning, that in a precarious moment like this one we cannot even see them coming for us.

Where Soft Authoritarianism Turns Hard

What we are facing now is the tightening of the frame. For decades, the disciplining logic of state and market showed up as soft authoritarianism—grant guidelines, strategic plans, efficiency metrics, reporting requirements. Annoying, sometimes demeaning, but tolerable so long as money kept flowing.

But in leaner times, those same logics harden. What once felt like guardrails becomes a gate. Funders consolidate, contracts disappear, mergers are encouraged, and organizations without scale are quietly shut down. The mask of benevolence slips, and the disciplining mechanisms reveal their true purpose: not to strengthen the nonprofit sector, but to shrink and control it.

This is the point Callahan misses. He presents these changes as pragmatic, even humane, but what he calls solutions are the predictable outcome of decades of assimilation to market standards. The danger is not just that we lose organizations. It is that we lose the memory of another way of existing altogether—the one that was never meant to live by those standards in the first place.

What We Risk Forgetting

If we accept Callahan’s prescription, we risk forgetting the very reason the nonprofit sector exists. We were never meant to mirror the market’s pursuit of efficiency or the state’s obsession with control. Our purpose has always been to safeguard the forms of care, belonging, and reciprocity that refuse those measures.

When market logic governs, relationship looks like waste. When state logic governs, dissent looks like disorder. But, when the gift governs, care becomes the point, and belonging becomes the measure. That is what our sector protects at its best—not scale, not efficiency, not tidy metrics, but the messy and enduring ties that make communities resilient.

Forgetting this leaves us unmoored, vulnerable to every new round of technocratic management advice. Remembering it, by contrast, is the only way we withstand lean times without losing our soul.

The Question Before Us

Callahan is not wrong to see dysfunction. But the danger is letting the market set the terms of our critique. If we keep answering decline with efficiency and consolidation, we will have forgotten the very reason this sector was created: to preserve and embody forms of care, reciprocity, and belonging that neither the state nor the market can sustain.

As Buck put it, “Who decides?” That is the question someone with a platform like Callahan’s needs to answer. If we leave the answer to those who see only through the lens of market logic, then the future of our sector will be closures, not renewal. But, if we decide — if we reclaim our own logic, then leaner times could become the moment we rediscover our purpose.

We are not here to mirror the market. We are here to show that another way of life is possible.

Jason Lewis

, Founder, Responsive Fundraising