“Now is the time to put aside childish things.”

—    President Barack Obama, Inaugural Address

Following a speech I made recently — at a statewide gathering of beleaguered, direct-service, nonprofit organizations — a participant stood up and suggested that, given the dire nature of our country’s economy, wasn’t it now time for nonprofits to consider merging?

It was an interesting moment, as I looked out at the hundreds of colleagues who were gathered that day to discuss our shared future in these lean times. From the dais, I was able to detect an uncomfortable undercurrent in the room, as participants braced themselves for what they assumed would be my inevitable advice that, yes, the time has come for us to consolidate.

They had every reason to expect that from me, as I have been quoted on numerous occasions suggesting that we would be a more vital, stronger movement if there were 25 percent fewer nonprofits out there, each slugging it out for survival, in an all but saturated market.

However, I decided that I would push the group that morning, so I challenged them to consider three different levels of mergers.

The first, I suggested, is the traditional merger — where two groups become one. I told them there is certainly room for more of that, for truth be told, there is far too much duplication of effort in every community.

The second form, I continued, is probably a more intelligent and advisable version of a merger — where three or four groups band together to share costs, such as back room services like finance or HR, or even office space. Taken one step further, local community groups with shared missions or even statewide associations might begin to recognize the need to reframe the dialogue politically and, in pursuit of that goal, they might share the cost of an advocate who would take their “merged message” to the city hall or state house on a daily basis.

But then I challenged them to consider an even higher, more powerful merger — where American nonprofits opened a bank and merged their assets to form an economic powerhouse that would be even bigger than Bank of America. From that vantage point, they could make grants and loans to each other, offer credit to clients, build affordable housing, finance new main street businesses and, quite possibly, rewrite the way commerce is conducted on a worldwide basis.

You should have seen their faces.

It clearly had never dawned on them that nonprofit organizations had options based on strength. Understandably, most still view the sector as, at best, observers in the national dialogue, whose economies are wholly dependent on the ebbs and flows of the larger economy — hostages, if you will, of the whims of funders or the zeitgeist of the day.

Now, to paraphrase our new President (the first to get his first job at a nonprofit), it is time for nonprofits to leave behind the world we know — the roles we have traditionally played — and stand together and advocate for a more mature understanding of our role in the American economy. 

To achieve that level of influence, we must discontinue the go-it-alone tactics of the past, where we fight solely for our own special cause, or in our own corner of the community. We must now form coalitions based on common interest — the most important being our role in America’s economic recovery. 

And if we are courageous and purposeful, we could now enter into an era where we might be part of a dialogue, locally and nationally, which could redesign how the economy works.

For example, if you invest in a business, you are eligible for an annual, and potentially growing, dividend check, should the company you invested in show profit. Yet, if you invest in your community’s highest performing nonprofit organization — say, one that trains returning felons for jobs or that helps kids graduate high school and go on to college — all you get is a one-time tax deduction. Ask yourself, why not an annual and potentially growing tax deduction if a nonprofit could demonstrate a verifiable return on investment? That could open an entirely new revenue stream for citizens, and possibly usher in a bold new era of innovation in how services are delivered and funds allocated.

Taken a step further, imagine if local mayors looked to nonprofit groups as partners in the community’s economic recovery, and made them eligible to receive funding to open new social enterprise businesses? Given that, by IRS rules, nonprofits must reinvest funds back into programs, local municipalities might see their scarce resources being reinvested back into the community, rather than going to a corporate headquarters a few states away.

In fact, in Vermont, the state legislature just opened that door by recognizing a new corporate structure — the LC3, which is a merger between a traditional business LLC (Limited Liability Corporation) and the 501C3. The legislature sees that, for Vermont to survive these rough roads, it must be open to adaptations or hybrids that take full advantage of all the resources and entrepreneurial spirit of the community.

Charity has a valued role in our country’s history. Supporting our neighbors and sharing in a common destiny has been part of our cultural makeup since our founding. However, now it is time to explore a more mature version of this time honored, yet undervalued American institution. There is too much at stake for nonprofits, our communities and our country to remain tethered to traditional roles. Let us, the nonprofit sector in America, step forward together to accept the challenge that our new President has issued.

By Robert Egger, president and founder of the DC Central Kitchen, a nonprofit that works to fight poverty and hunger by recycling surplus food, and the V3 Campaign, which educates political candidates about the impact and potential of the nonprofit sector. Contact him at http://www.robertegger.org/.