Paul Lachine

Philanthropies of Scale

The problem with charities is that they have no motivation to become more efficient. The question is not how to create a chain of soup kitchens, but how to develop leadership that creates intrinsic incentives for the staff.

MIDLAND, TEXAS – Since starting my own nonprofit organization, I look at other nonprofits with new eyes. There are far more of them than I ever realized. As an angel investor, I did not normally engage with them. Now I worry that they are terribly inefficient.

As I travel in small towns, many of the businesses that I see – most of them, it seems – belong to large chains, with mass-purchasing contracts, standardized training procedures, consistent quality, and, I assume, profitability. The nonprofits, by contrast, are mostly small and are often run by people with passion but not much expertise or management skill. They benefit from dedication rather than efficiency – which is honorable but not easily scalable.

This is a challenge for the general proposition of self-help, and also for my own new venture: the Health Initiative Coordinating Council (HICCup), which will advise five communities competing to win the HICCup Prize for the greatest improvement, according to five metrics, in health (not health care) over five years.

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