Institutional Endurance & Scaling

The reading from this week that got me thinking the most is Hugh Whalan's, "How Misinformed Ideas About Profit Are Holding Back The World's Poor. In his Article Whalan makes that argument that Charities are unsustainable in their efforts to improve the work of the poor. However I feel like this is inaccurate, as some of the oldest organizations in operation today have done so as non-profits or charities.

Aside from Disaster Relief efforts, most charities have a singular issue which they are working to solve. But what happens when that issue is solved? In 1938 FDR founded the March of Dimes (which is why he is featured on the Dime today) with the mission of finding a cure for polio. Donations from March of Dimes helped lead to the development of the Salk vaccine. With a cure for polio, the March of Dimes now had a conundrum, did it dissolve now that it's original mission had been met? This surely would mean that everyone working for the organization would have to find other means of employment. Or did they decide to widen their efforts and mission in order to maintain their own jobs? So instead the mission was changed to that of birth defects. An issue with many more variables, ensuring their organization would continue. In fact this year the March of Dimes is celebrating it's 75th Anniversary. Once a charity reaches a certain level they can become almost too sustainable.

Most charities have seemingly impossible mission statements. Habitat for Humanity wants to eliminate homelessness, the United Way is focused primarily on child welfare and education. Their efforts will never solve these issues alone. But the argument that the free market can do so alone to me is also a fallacy. It is a free market system which lead to these issues in the first place. While entrepreneurs can make large impacts in developing markets with sustainable ventures I do not personally believe that it will make the efforts of charities unnecessary. While some who receive aid from organizations may become dependent, a good charity has a mission that aims to get it's beneficiaries off of it's services.

This is not to say that I doubt the intentions of those working for international and domestic charities, but what if larger seemingly impossible issues are chosen instead of smaller niche problems partially due to a need ensure that the employees have financial security? Could broadening the mission of your charitable organization simply be a method of scaling? This question is where I see Whalan's argument making the most impact. For Entrepreneurs sustainability requires that the customer's buying power increases overtime and the market expands. In contrast, just once charities get efficient at meeting their goals, logic dictates they will eventually have to pack up and leave whichever region they have invested their time and money in and pick a new location or broaden their services and mission statement.