Should Nonprofits Become Obsolete?

Last week Google released Google Voice, a universal phone number that ties together your various phone numbers, email, SMS, and voice over IP addresses. It includes a central voicemail box. The product is a revamped version of the service previously offered under the name Grandcentral (which Google bought). My friend Allan Benamer, writes the Non-Profit Tech Blog and commented on the impact of the new offering on a nonprofit he used to work for called Community Voice Mail.

He wrote:

[CVM’s] admirable goal was to provide free voicemail accounts for homeless clients throughout the city…There is no doubt that a lot of good was done by CVM before Grandcentral showed up on the scene. Many clients attested to its usefulness. However, Community Voicemail is made redundant in the face of publicly available free voicemail. Indeed, Grandcentral actually offered homeless people in San Francisco free voicemail just like CVM.

Then quoting himself writing in 2006, Allan writes:

In a deep way, this really gets to the heart of what any non-profit’s true mission is which I believe is to render itself obsolete. If the private sector in the guise of Grandcentral is providing free voicemail, then shouldn’t every non-profit that is currently providing free voicemail in a very serious way ask: “Should we shut down our free voicemail services?” While this may be a sad outcome for many people, we should consider it a victory ultimately for the ability of our sector to step in when no one else did and conversely, to back off when others pick up the slack.

I think this thesis that the obsolete nonprofit is the best kind of nonprofit is wrong. But I offered a similar suggestion in a Financial Times column from the summer of 2007 when I wrote:

Another example of the changing face of philanthropy is the growing popularity of social enterprises – for-profit companies that are in business to do social good. Green Dimes is a for-profit company that helps consumers reduce the amount of junk mail they receive. But its bigger mission is to create a national Do Not Mail list, similar to the Do Not Call list that limits telemarketing. Ironically, if they achieve their mission, they will drive themselves right out of business – a fact they proudly trumpet.

Lucky for me, I had Kevin Jones, who understands value creation better than most, school me when he pointed out that if Green Dimes drove themselves out of business they would, in the process, build a massive reservoir of trust with their customers. That “trust to maintain personal information” would be hugely valuable to the company and would allow them to move on to bigger and better projects.

I’m writing about this today because I think it highlights the difference between programs and organizations. Great nonprofit organizations should hope that they can render their programs obsolete. If a program is designed to distribute food to the hungry, nothing could be better than a sudden lack of hungry people. But great organizations (for-profit or nonprofit) don’t just have a nifty product or program. They are well run organizations who understand how to recognize community needs, design a solution and execute a flawless delivery.

When we confuse programs with organizations, we naturally think that all resources should go to the program and organizational expenses should be minimized. But when we understand that value creation occurs at the organizational level, it re-orients our understanding of the nonprofit’s purpose.

Unless we design Utopia, nonprofits will never be obsolete.

[Update: Reader Ryan Lanham takes correct issue with my colusion in this comment. Click to read my response. My conclusion was speaking to the field becoming obsolete, but Ryan rightly points out that certain nonprofits might do best by closing their doors in certain circumstances.

Update Two: Clearly this post was sloppily written. See the comments for my further explanation of my premise.)


  1. Ryan Lanham says:

    To my mind, you make the right argument but with the wrong conclusion.

    What will never be obsolete is intangible value preserved for a time in certain institutions. That speaks nothing to profit or not, government or not, or to any other type of institution.

    On the other hand, reputation can assume a negative value as it no doubt has for the likes of Citibank or, worse, Enron.

    Organizational continuity only makes sense if the collected talent and trust has some meaning that cannot be matched or surpassed by new entities. Survival for the sake of survival is not justified.

    Some charities that dissolve after a set period are not unreasonable given that the wishes of the founder may not be perpetually relevant. In a community sense, this is hard to imagine, but who knows?

    Renewal requires continued perceived added value by those charged with governance. Otherwise, the right obligation of those charged to govern is dissolution.

  2. Good catch Ryan. That was a sloppily written last sentence. My point was that the nonprofit field will never become obsolete. But I completely agree that in certain circumstances a nonprofit’s best course of action would be to close their doors. This is true for for-profits as well.

    The big point I was trying to make was to rebut the idea that nonprofits should see becoming obsolete as their long term goal.

  3. Elizabeth says:

    I like the thinking regarding value creation. On a tangential note, there is a question, too, about competition. In the private sector, it would likely result in a better outcome if two services were forced to compete with each other. However, in the nonprofit sector, when it requires public good resources to pay for a service, we assume that one model makes the other redundant — with really have the tools to evaluate which model might be better for the end user.

  4. I think the argument from Kevin Jones is misapplied to Community Voicemail (CVM). The argument states that nonprofits cannot be obsolete because if they made themselves obsolete they would accrue a reservoir of trust that they can use for bigger and better projects. There are obviously two bright lines here: did the nonprofit make the issue it was pursuing obsolete and does it have trust?

    In this case, CVM was made obsolete by Google’s efforts. It didn’t have the good fortune of making homelessness go away or the need for free voicemail go away. Google (and Grandcentral) basically pushed CVM’s efforts into technical obsolescence. This SHOULD force CVM to evolve in its mission (and there’s wiggle room in it) and move towards other areas that Google Voice doesn’t impinge upon.

    As I pointed out in my article, trust in CVM was eroded by CVM’s downtime and lack of stability. Remember, voicemail is somewhat similar to dialtone. You either have it or not. When it’s down like CVM’s service was frequently down, there was no easy way to gain confidence in CVM’s ability to recover from outages. I suspect Google Voice will not have as much downtime as CVM’s system will have. CVM doesn’t take proactive measures like Google’s Appstatus page:

    So no, CVM is not the master of its own fate here. It’s being buffeted by market forces that are coalescing around the provisioning of free voice services so that you would buy upmarket items later on. I would like CVM not to die but to evolve. There are certainly other issues that they could take on and I even presented an option for them. It’s up to them.

    There are hints that Google will re-offer Project Care again. At that point, your argument will be even tougher to hold on to. Do you seriously want homeless people to take on inconsistently available voicemail because of the notion that nonprofits can’t be obsolete? Ultimately, you and I should be considering the knock-on effects of well-provisioned voicemail over whether or not a nonprofit should keep providing an obsolete service.

  5. OK, I have to admit again I was sloppy with my conclusion. Allan, see the updated post in case you saw the original one.

    I would not argue that any given nonprofit “cannot become obsolete”. And the Google/CVM example is a good, clean cut example of a nonprofit that maybe is now obsolete. But my point (again, sorry I was sloppy) was that your premise that a nonprofit’s true mission should be to render itself obsolete is wrong.

    It is an easy assumption to make. As I pointed out, I made the same assumption myself. But I think it mistakes programs with organizations and that mistake is at the core of a lot of the fundamental problems in our sector.

  6. It’s worth noting that this is not a one-size-fits-all issue. Certain kinds of nonprofits, notably schools and universities, are not designed to make themselves obsolete because there is always a new generation of young people to educate. The same could be said of many cultural institutions, such as museums and performing arts centers.

  7. I don’t know if I can agree with Kevin Jones about the accumulation of social capital that occurs with nonprofits. Not all nonprofits gather enough social momentum around them to transfer themselves to the next phase of operation after they win out on their starting issue. Witness the devolution of the SCLC and NAACP after the winning of the Voting Rights Act of 1965. They’re still around but hardly as effective as they once were. How much social capital would a nonprofit have to gather to justify moving on from their original issue?

    It’s not a bad idea but I think it needs more fleshing out before I would move away from my original argument that nonprofits should try to make itself obsolete. At least I have a clear goal in mind, “work till the issue is over”. It’s transparent and produces an easy decision rule for funders and the community at large.

  8. Let’s imagine eBay decided that they were set up to facilitate the swapping of Pez dispensers (true story) or that Amazon was set up to sell books only (amazing!) and that both decided that was their core mission and they would do nothing else.

    OK, now, mission creep is an incredibly important issue for nonprofits. But it is generally what Peter Lynch called “diworsification” ie. adding on unrelated areas that did not benefit the whole simple in the pursuit of size.

    The important point is that if a nonprofit is to be successful at scale, they must build a robust organization. Robust organizations do not become obsolete. They are in short supply all the time. To stay robust, an organization must not be distracted by mission creep, yet at the same time, the robust organization must not confuse itself with its programs. If a program becomes obsolete, then move on to a higher level issue.

    That being said, if a small nonprofit is a single program organization and the landscape changes dramatically, it might be best to close down. But I reject the idea that nonprofits should strive for obsolescence. I understand where that mindset comes from, but I think it sells short the importance of robust organizations.

  9. Rumors of the death of Community Voice Mail are (ahem) premature, to say the least. My lengthy rebut to the original post on Non-Profit Tech about CVM and Google Voice are on our blog (, but in this conversation, I think it’s important not only to make the distinction between program and organization, but program and technology. The two rarely, if ever, equate. Google is offering a great new technology that may be of value to (say) a homeless person without a phone, who can put it on a resume or a housing application. But a phone number in and of itself doesn’t do much to help that client learn about new job prospects, or find out about new housing possibilities in her community, and this is the much harder thing. Community Voice Mail has moved beyond simply providing phone numbers to people because the impact isn’t sufficiently large; instead, we have program managers in each CVM city sending broadcast voice messages to their clients about jobs, housing, health care, events and other important things. This information is local and relevant to the specific needs of our clients, and people are getting jobs and gaining access to information they would ordinarily have trouble getting. The technology delivered the information, but the important work is pure “program”: the local people identifying and distributing local information to their clients, and constantly working to drive usage and expansion of the service.

    Allan’s comments about the New York City CVM program that “died” in 2007 is instructive. The agency hosting that program was counseled (by Allan!) to end the CVM program partially because GrandCentral had arrived on the scene and was offering free voice mail to everyone. The implication was that “the market” would provide, and CVM was no longer needed. Of course, soon after, GrandCentral was purchased by Google, and stopped providing phone numbers to anyone until last week. CVM clients in New York lost their voice mail, and hundreds of agencies could no longer provide this tool to their clients. (The New York CVM program was resuscitated with a new agency last year). The market did not provide for homeless people and their agencies, and until it becomes profitable to do so, it likely never will. Google may be able to provide a (great!) free technology, but if it’s not tied to anything else, it will have much less impact than it could have.

    My point is that Community Voice Mail is primarily a program, not a technology. We’re a federation of 47 local managers and 2000 social service agencies that are using voice mail (and email, for that matter) to deliver to clients the information they need so they can take action and improve their lives. Clients with just a phone number can wait around for employers to respond to their job application, or they can constantly learn about new jobs they can apply for through the broadcast messages we send to them through Community Voice Mail. There is a difference.

    Steve (Community Voice Mail)

  10. There will always be a need for the monitoring of delivery to more vulernable populations, such as the homeless. Yes, the service or program may be obsolete, but is it effectively reaching those the nonprofit served? What are the metrics of this population? This would also apply for inner city situations.

    I, personally, so not see business heavily focused on these areas as it is not a target market. This nonprofit is not obsolete, it needs to fill in the gaps of service and focus on quality of service.

  11. There’s a reason why nonprofits don’t offer free email or free web pages. Those were services that were easily monetized by Web entrepreneurs. Free voicemail is entering that domain as well.

    Sure, there’s a “program” behind CVM. It apparently consists of broadcasts of job announcements and other sundry fare. That’s on one side of the ledger (and frankly, easily duplicable even in a Google Voice context with a robocalling service). The other side are the line costs and program management expenses that nonprofits incur when they’re using the technology. CVM will have a tough time keeping nonprofits from bolting to Google Voice once the nonprofits figure out their new costs.

    So the question here is: If nonprofits see a cheaper (i.e. free) way to deliver a similar service, should they use it or not? And if yes, what impact should it have on CVM? I don’t want CVM to just go away, but it does needs to change. Without a recognition of these impending technical developments, the issue of obsolescence isn’t going to only be raised by myself but by all of CVM’s partnering agencies as well as their clients. It’s been two years since Grandcentral was bought by Google and CVM seems to have acted as if something like Google Voice wasn’t going to happen. The challenge isn’t on me to defend this thesis that CVM is obsolete, the challenge is on CVM to evolve its mission.

  12. @tactphil on rendering nonprofits obsolete: recommended reading.

  13. kevin jones says:

    Alan, I agree not every non profit creates a “bank of trust.” value is not a general quality, nor is it a commodity. that comment was specific to greendimes in their role as trusted intermediary pointing you to sustainable choices in eliminating your junk mail. if they had guided you wisely and safely to the goals they and you shared, then you could imagine that trust that you’d placed in them would be a sustainable value and potentially transferable or extendable to other enterprises, causes, etc.