It seems like no one is sure why Unitus is closing its doors. That said – what can we learn from this situation if, as stated, Unitus is closing down because it has accomplished its mission and no longer needs to exist?
“We have always thought of Unitus as a project, and that when we completed the project, we would have the integrity to say we were done,” says Joseph Grenny, one of the seven founders, and the chair of Unitus’s board. (From the Chronicle of Philanthropy’s report on Unitus)
From a donor perspective, what this quote is describing is the issue of room for more funding, which we’ve discussed at length (see our page and blog post series on this issue). No matter how successful a program is, there are limits to how much it can be productively expanded.
In December, we argued that room for more funding is a key question few others are asking charities. The Unitus case – if they did in fact shut down because they “completed the project” – lends support to our argument.
- Last year, Philanthropedia polled 130 professionals in the sector; Unitus came up as a top recommendation.
- The Omidyar Network has granted $11.7 million to Unitus since 2005. (See the Chronicle story.)
We can’t find evidence that Unitus itself gave an indication that its use for more funds was limited. According to the Puget Sound Business Journal, Unitus was “interviewing potential candidates for its vacant top fundraising post as recently as a month ago.”
Donors shouldn’t rely on a charity to tell them when it’s running out of room for more funding. We believe that the issue of “room for more funding” is one of the most under-recognized issues in the field of charity evaluation, especially for individual donors.
Have a look at the MicroCapital Monitor, a monthly e-publication. http://www.microcapital.org/microcapital-monitor/
Each edition typically lists several hundred million dollars worth of commercial and quasi-commercial financing deals for MFIs. Definitely makes it difficult to argue for continued philanthropic provision of lending capital to MFIs. Also, Unitus’ decision is in line with the sales pitch commercially-focused US microfiance groups have been using for years: “With a relatively small, time-limited amount of philanthropic funding, we can create an industry that will grow indefinitely without us, relying on comercial funding.” I wouldn’t be unhappy if the rest of these groups stuck to their promise, declare victory, and look for a better use for their money.
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