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Why Charities Should Have an Expiration Date

When an organization accomplishes its goal, Nancy Lublin thinks it should consider shutting down — not finding another mission.

Why Charities Should Have an Expiration Date

Vampires are real. I don't mean the bloodsucking immortals dominating your bookstore's romance-novel section. I mean the ones that masquerade as not-for-profits.

Companies aren't supposed to be immortal. For-profits go out of business all the time, for reasons good and bad, from fierce competition to poor management to an inability to adapt. Lehman Brothers. Circuit City. Linens 'n Things. All dead!

Now try to name a closed not-for-profit.

I'm waiting.

Still waiting.

It's okay. I'm an expert in this space, and I sat here for ages before I could think of one. So that must mean we're all doing incredibly amazing work, right?

Of course not. Just as in the for-profit sector, not-for-profits should have earthly life cycles. But it's actually hard for a not-for-profit to die, in part because, legally, dissolution "is still more onerous than it should be," says Sean Delany, executive director of the Lawyers Alliance for New York, which provides pro bono counsel to thousands of organizations. That aside, we all agree that, given limited funds and pressing needs, our common concern should be maximizing our resources. A not-for-profit exists to cure something, address an issue, or elevate the status of a group of people; if and when that's achieved, we should be done. This is a little different from the for-profit sector, where companies die of failure — I'm calling for death by success. In any case, simply put, the vampires gotta go.

I can think of one organization that laudably shut its doors: the September 11th Fund. Created jointly by the New York Community Trust and United Way of New York to help people and businesses affected by 9/11, the fund closed in December 2004 after distributing $534 mil-lion. That's right — a big, fat foundation achieved its mission, spent its money, and put itself out of business. "The purpose was to fill critical gaps, meet immediate needs, and help create systems to address long-term needs, not to duplicate existing public and private systems and resources over time," says Suzanne Immerman, who was the fund's deputy director. "The efficacy of the effort was directly related to its time-limited nature." If you know Suzanne or anyone else who worked there, kiss them.

On the other end, you have the March of Dimes, an organization created with a specific goal — to help find a cure for polio. Unlike most not-for-profits, it succeeded ... in 1955. What a huge, awesome, world-changing accomplishment! But today it suffers from mission creep, having broadened its agenda to "improving the health of babies by preventing birth defects, premature birth, and infant mortality." I like babies. I'm all for neonatal health. (I had a premature, low-birth-weight baby six years ago.) But I think the organization should have quit while it was ahead. Today, Charity Navigator gives it only one out of four stars for efficiency. I wonder if morphing from one cause to another has been part of the problem. And I think it's fair to ask, Would it have been better to celebrate the early victory and shut down?

I confess that I've been guilty of feeding vampires. Two years ago, (and 200 other groups) joined a coalition trying to pass legislation that would fund community-service efforts. We believed in the spirit of the Kennedy Service Act, though I — and many others — suspected (ultimately, correctly) that these federal funds would go to a few well-connected organizations. Getting the legislation passed was a long shot, but amazingly, the coalition leadership rocked it. President Barack Obama signed the bill on April 21, 2009. Today, the coalition still exists (and Do Something is still on board). It may do great stuff, but I do sorta wish that it had celebrated the win and folded.

The broader principle here is that companies and organizations don't exist simply to exist. A not-for-profit should ideally be not-for-perpetuity. We should not be donor-funded jobs programs. People give not because they believe in us as employable human beings but because they believe in what we do. Once we do it, we should wear a termination notice as a badge of honor.

In other words, it's time we all invested in wooden stakes.

@nancylublin (Team Jacob) welcomes your tweeted thoughts.

A version of this article appeared in the December 2010/January 2010 issue of Fast Company magazine.

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