The End is Nigh: Limits to Growth of the Nonprofit Sector

Abstract

The nonprofit sector has experienced exponential growth over the past three decades with nearly 50,000 new nonprofits created last year. Past examples of industry growth suggest that this rate of growth is not sustainable. Empirical population ecology studies of nascent industries show a period of rapid growth followed by market saturation, then consolidation of organizations and market share resulting in increased competition for small and new organizations. We use historical nonprofit data from the NCCS and apply ecological models to show that the nonprofit sector may be fast approaching growth limits. Market saturation varies by metropolitan area and nonprofit subsector.