Imagine what an extra $100 billion a year could do for philanthropic and other nonprofit institutions. That’s more than three times the annual giving of every charitable foundation in the United States combined. It’s nearly 20 times the amount spent annually on Head Start. In fact, it’s enough to give every high school graduate in the country a $40,000 scholarship. Adding such a windfall to nonprofit services seems too good to be true. But according to a study we recently completed with our McKinsey & Company colleagues, the nonprofit sector could free up that amount—maybe even more—by challenging the operating practices and notions of stewardship that currently govern the sector.
A version of this article appeared in the May 2003 issue of Harvard Business Review.
