Mission Accomplished, Nonprofits Go Out of Business

By STEPHANIE STROM
Published: April 1, 2011

A few nonprofit groups have recently announced plans to wind down, not over financial problems but because their missions are nearly finished

A few nonprofit groups have recently announced plans to wind down, not over financial problems but because their missions are nearly finished.

Most notable, perhaps, is Malaria No More, a popular nonprofit that supplies bed nets in malaria zones. Its goal is to end deaths from malaria, a target it sees fast approaching.

The charity has announced plans to close in 2015, but it is keeping its options open in the unlikely event that advances against malaria are reversed.

“We never planned to be around forever,” said Scott Case, a co-founder of Priceline and vice chairman of Malaria No More. “We have thought of this more as a project than as an institution-building exercise, and the project is nearing its completion.”

So far, the number of organizations opting to go out of business for mission-related reasons is too small to call a trend. It is still far more common for a nonprofit to close its doors because of financial pressure, which is increasing as governments continue to pare their budgets and donors maintain tight grips on their giving.

Still, the novelty of organizations going out of business once their work is done has attracted attention.

“I don’t think it’s going to be a widespread phenomenon because there are a lot of groups taking on problems like alcoholism and domestic violence that aren’t problems that go away,” said Jan Masaoka, editor in chief of Blue Avocado, a blog for nonprofits. “But I do see that in some cases there is an opportunity for organizations to wind down gracefully and with their job done.”

Out2Play, an organization started by Andrea Wenner in 2005, plans to close its doors next year. The group has put up roughly 120 playgrounds used by about 80,000 children in public elementary schools around New York City and is fast running out of locations, in part because the Bloomberg administration liked the idea so much that it took on some schools itself.

“When I first wrote the business plan, I thought about expanding it to other cities or into other types of institutions, like housing projects or hospitals, and we talked about those ideas and others when the board began seeing the end in sight,” Ms. Wenner said.

Ultimately, though, the board decided that the model worked best for the purpose it had served and that anything else would require more than a simple tweak.

“For example, in a housing project, you would still need someone to take kids to the playground and supervise them,” Ms. Wenner said.

In the end, said Robert Daum, chairman of Out2Play’s board, “we just decided to declare victory and go home. Money is a scarce resource, and there are lots of other good causes out there, so there is no point in hitting up our friends and contacts for gifts simply to perpetuate the organization.”

Out2Play is working to complete roughly 40 more playgrounds before it closes. It plans to leave behind an endowment to cover some of the maintenance costs associated with the playgrounds, Ms. Wenner said.

“Right now, I think of it as very exciting because there’s a great sense of accomplishment that goes along with it, but I’m sure on the final day, I’ll have a strange feeling, probably bittersweet,” she said.

Executives who have closed nonprofits say a feeling of pride overcomes any potential regrets. “Knowing that we were going to close helped us work with extreme urgency and intensity and not slack off for a minute,” said David Douglas, a founder of Water Advocates, a charity that closed late last year.

Over its five years, Water Advocates raised more than $100 million. Its goal was to increase awareness of water issues, as well as to pull together the efforts of a wide range of organizations. The open knowledge that Water Advocates was destined to go out of business helped it encourage greater collaboration among those various groups.

“We weren’t trying to attract attention to ourselves, which allowed us to focus on the issue itself, and we were always looking at ways to hand off things to other nonprofit groups,” he said. “And we weren’t competing for money, which also helped us build relationships.”

British philanthropy circles recently have been talking about the decision to close the Otto Schiff Housing Association, a nonprofit set up in 1933 to provide assistance to displaced Jews. In its latest incarnation, the organization operated a number of homes for victims of Nazi persecution.