We Don't Need More Cheerleaders.

The organizations doing the most important work in the world today are making decisions based on stories that stopped being true a while ago. I know, because I believed some of those stories myself.

Why I’m Writing

This is The Social Prophet. A publication about where the social profit sector is headed, not just where it’s been.

I want to be clear about the perspective I’m writing from. I’ve spent 35 years inside civil society, not observing it from the outside. I led three nonprofits as an executive director. I helped build and launch AmeriCorps from inside the federal government, one of the largest civic infrastructure programs the United States has ever created. I’ve sat on nonprofit boards, including the kind I’m about to describe with some candor. And I’ve consulted with more than 375 organizations across 35 countries, which means I’ve been in the room for enough honest conversations to know what leaders say in private versus what they say at conferences and on social media.

We Need a Prophet.

Not a prophet with a crystal ball. A prophet who reads the present clearly enough to see where it leads. After enough cycles, after enough organizations navigating the same avoidable crises with the same avoidable blind spots, you develop a sense of what current choices are going to cost. That’s what this publication offers. Not predictions. Not criticism for its own sake. The honest read of where we’re headed, backed by data and evidence.

I also want to be transparent up front. I own and run Common Ground Consulting and Common Ground Labs, and I have client relationships to maintain and confidentiality obligations I take seriously. What I write here are my opinions, my independent analysis, not filtered through what any client needs to hear. The consulting work is where I apply this thinking directly. The Social Prophet is where I think out loud. Both are real. Neither is a sales pitch.

What follows are five beliefs the social profit sector holds right now that are going to be expensive. Not just philosophically wrong. Expensive, in lost staff, lost donors, lost relevance, and lost mission. I know these beliefs well because I’ve held some of them myself. That’s what makes them worth naming. That’s what makes them lies.

Sixty-one percent of donors still choose social profit organizations based on how little they spend on themselves.¹ The overhead ratio remains the dominant donor filter, thirteen years after Charity Navigator, GuideStar, and the BBB Wise Giving Alliance issued a joint statement calling it a poor measure of nonprofit performance.

They called it the “End the Overhead Myth” campaign. Thirteen years ago. The sector didn’t fail to communicate the truth about overhead. It failed to fight for it.

I led organizations as an executive director. I know what it feels like to rationalize a low overhead number as a point of pride when the honest version of that story is: we’re underpaying people, our technology is years behind, and our infrastructure is one funding gap away from crisis. Low overhead isn’t a badge of honor. It’s a confession.

The overhead myth locks organizations into a starvation cycle that compounds over time. Underfunded operations lead to underpaid staff, which leads to burnout and turnover, which leads to lost institutional knowledge and capacity, which leads to more underfunding because the people who could make the investment case have left. I’ve watched this cycle play out in organizations across five continents. It doesn’t get better on its own.

Ninety-five percent of nonprofit leaders are concerned about burnout. Only 3 percent of HR leaders feel prepared to address it.² The sector calls this a wellness crisis and funds resiliency workshops. It's not a wellness crisis. It's a structural design failure, and it's going to get worse as the funding environment tightens.

Here’s what I see coming. As government funding contracts and foundation giving consolidates, the organizations with starved infrastructure are going to hit a wall first. They won’t have the reserves, the systems, or the staff stability to absorb the shocks. The organizations that made the uncomfortable case to their donors for adequate investment and built the infrastructure to back it up are the ones that will still be standing.

Every time you brag about your low overhead, you’re telling donors that your staff doesn’t deserve competitive salaries, your systems don’t need to work, and you’ll settle for less. Stop it.

I've sat on many nonprofit boards. I say that not to establish distance from this critique but to place myself inside it. I know what it looks like when a board meeting is actually a briefing. When a board member who asks hard questions gets quietly labeled a problem. When the unspoken deal is: you just bring in donors, we don't need you to actually govern.

The dominant model of nonprofit governance is structurally broken. Board seats are too often awarded for donor capacity, not strategic competence. When a board’s primary function is fundraising, it becomes incapable of holding leadership accountable, because accountability might cost it a donor. That’s not a character flaw in the board members. It’s an architectural flaw in how we’ve designed governance.

Look at the pattern in major nonprofit failures over the past decade.³ There is almost always a board that "didn't know." A board that was kept in the dark, that confused polished ED reports with actual oversight, that had no mechanism for surfacing dissent or stress-testing strategy. "We didn't know" is not an excuse. It's the indictment.

The next decade is going to test governance harder than anything the sector has faced since the 2008 financial crisis. USAID funding gone. Grassroots giving eroding. AI accountability questions multiplying. Leadership transitions accelerating as an ED burnout crisis deepens. Every one of those is a governance stress test. Organizations with performative boards are going to face those tests with no one in a position to make hard calls.

What governance actually requires isn't complicated. Skills-based recruitment alongside donor recruitment. Term limits that actually end. Financial literacy that goes beyond approving a budget. And the organizational courage to hold leadership accountable, including, sometimes, removing leaders when the mission demands it.

That last part is where most boards fail. They've confused loyalty to a person with loyalty to a mission. They are not the same thing.

Total charitable giving hit $592.5 billion in 2024, a record.⁴ The headline looks like sector strength. The structure beneath it tells a different story.

Twenty million fewer American households donate today than in 2000.⁵ Donor retention sits at 31.9 percent, meaning that for every ten donors an organization acquires, seven will be gone within a year.⁶ One in four Americans plans to cut charitable giving in 2026.⁷ The broad base of small and mid-level donors that historically gave the sector both revenue and democratic accountability is disappearing.

The money isn’t vanishing. It’s concentrating. As grassroots giving collapses, the sector becomes dependent on fewer, larger donors. Ninety-three percent of high-net-worth donors plan to maintain or increase their giving. That means fewer people, deciding where more money goes, accountable to fewer stakeholders. Concentrated giving comes with concentrated control.

Meanwhile, the largest foundations average a 5.2 percent payout rate while sitting on record endowments.⁸ Here's the Sector Math: at a 5 percent payout rate, a $10 billion foundation spends $500 million and keeps $9.5 billion.

The endowment isn't funding the mission. The mission is funding the endowment.

Foundations speak the language of trust-based philanthropy and power-sharing. But, only 10 percent have actually transferred decision-making authority to communities. Eighty-three percent report “some stakeholder participation.” Listening, however, is not power-sharing. It’s the appearance of power-sharing, and the sector has been far too polite about the difference.

The trajectory here is clear. As government funding contracts, including the $9.3 billion in USAID cuts that eliminated 83 percent of its programs and gutted a decade of localization progress last year, organizations are becoming more dependent on philanthropy precisely as philanthropy becomes more concentrated. The organizations that don’t actively diversify their funding base now, while some grassroots infrastructure still exists to build on, will find themselves entirely subject to the priorities of a small number of funders. That’s not a funding model. It’s a vulnerability that compounds with every passing year.

When five foundations can reshape an entire field’s priorities with a single grantmaking cycle, we don’t have a philanthropic ecosystem. We have an oligarchy with tax advantages.

The numbers look impressive. Ninety-two percent of nonprofits now use AI tools.⁹ Nearly universal adoption in a sector that typically lags technology trends by a decade or more. You'd think the results would follow.

They haven’t. Only seven percent of nonprofits report major impact from AI. Eighty-one percent say usage is ad hoc and individual. Four percent have documented workflows.

Four percent. That means 96 percent of social profit organizations are running disconnected individual experiments that disappear when someone leaves, a subscription lapses, or a funder stops asking about it. That’s not transformation. That’s a sector-wide hobby.

The organizations seeing real results have three things the rest don’t: documented workflows, organizational governance, and measurable benchmarks. Not the tools, but the systems for using them consistently and knowing if they’re working. Everything else is performance.

Here’s what concerns me about where this is going. As AI gets embedded in fundraising, program delivery, and client data, organizations without governance are quietly building liabilities they haven’t priced: Data handled carelessly. Decisions made by algorithms no one has reviewed. Accountability gaps that a funder, a journalist, or a community member will eventually find. No concern for equity. The organizations that govern AI well right now are building a structural advantage that will be very hard to close in three to five years. The ones that don’t will spend that same period cleaning up problems they created today.

Most nonprofit AI “strategies” still exist to satisfy a funder’s checkbox. A program officer asks what you’re doing. You point to a few staff who use it individually. The box gets checked. Nothing changes. That’s not adoption. That’s compliance theater, and it’s going to look very different in five years when the sector separates into organizations that actually transformed and organizations that checked boxes.

If your AI strategy lives in one person’s head, hasn't been put on paper, and isn't meaningfully changing how work gets done, you don’t have a strategy. You have a liability.

The sector has survived recessions, funding contractions, and political headwinds before. Leaders who have been through multiple difficult cycles have earned some confidence in the sector’s durability (and their own leadership). I understand the instinct.

But this is not a cycle. It’s a structural break.

The USAID dismantling eliminated tens of thousands of jobs, terminated 5,200 contracts, and erased decades of institutional knowledge in months.¹⁰ Nonprofits that lost federal funding saw average revenue drops of 34 percent.¹¹ Only 15 percent of corporate citizenship leaders describe their nonprofit partners as stable.¹² China and Russia are already filling the governance vacuums the United States has left behind.

The model the sector was built for rested on three things: government funding of the infrastructure, philanthropy supplementing and innovating, and a broad base of grassroots donors providing democratic accountability. All three are under serious pressure simultaneously. That’s not a stress test. That’s a realignment, and it will take ten to fifteen years to fully resolve.

“Resilience” has become the sector’s word for enduring unsustainable conditions without changing anything. We fund resilience training. We celebrate resilient leaders.

What we’re actually celebrating is people absorbing structural failures personally, burning out, and leaving, while the structures that created the failures stay intact. That’s not resilience. That’s learned helplessness with better branding.

Having helped build AmeriCorps from inside the federal government, I know what it looks like when large-scale civic infrastructure gets created, and what it looks like when it gets dismantled. The organizations that will define what comes next aren’t the ones waiting for things to return to normal. They’re the ones redesigning right now, building new revenue models, new governance structures, new partnerships, and the willingness to let organizational forms die when they’ve outlived the missions they serve. The mission matters. The form is just the vehicle.

Stop planning for recovery. The thing you’re recovering to doesn’t exist anymore. Plan for what’s next.

What This Publication Will Do

The Social Prophet publishes monthly. Each issue will take a deep dive into one structural question and treat it with the seriousness it deserves. In the coming issues: what vendor-funded AI philanthropy actually costs the sector. The real shape of the post-USAID international development landscape. Who controls the next generation of philanthropic capital? What will leadership models look like when they don’t require martyrdom?

This isn’t vendor content or foundation PR. It’s pattern recognition from 35 years of watching cycles play out, applied to the decisions the sector is making right now. A prophet doesn’t predict the future. A prophet reads the present carefully enough to name where it is leading. That’s what I intend to do here, every month, with candid insights and strong evidence.

If this resonates with you, please forward it right now to one person who needs to read it. Not someone who will agree with all of it. Someone who will push back, debate, and argue respectfully. That’s how the thinking gets better.

The social profit sector deserves better than comfortable stories about its own resilience. It deserves an honest analysis of where it’s actually headed. That’s what this is. Welcome to The Social Prophet.

THE QUESTION

What decision are you postponing because you’re still hoping the model you built for comes back?

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