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30% of nonprofits don't survive 10 years. It's not management failure—it's capital structure failure. Single-cycle funding can't support multi-cycle missions.
Popular explanations for nonprofit failure miss the structural cause.
Nonprofit leaders lack business skills
But: But well-managed nonprofits fail at similar rates. The pattern is structural.
Organizations lose focus chasing funding
But: Mission creep is a symptom of capital pressure, not its own root cause.
Donors stop giving over time
But: But even with consistent donors, single-gift models can't compound.
Too many nonprofits, too few grants
But: But even well-funded nonprofits face the same temporal mismatch.
Nonprofit funding operates on timelines fundamentally mismatched with mission requirements.
| Dimension | Nonprofit Reality | Mission Requirement | Mismatch |
|---|---|---|---|
| Funding cycle | 1-3 years (grant cycles) | 10-50 years (real change timelines) | Funding expires before impact matures |
| Capital structure | Single-use (spend once) | Requires repeated investment | Each cycle requires new fundraising |
| Risk tolerance | Low (can't afford failure) | Requires experimentation | Risk-averse behavior limits innovation |
| Time horizon | Next grant deadline | Generational impact | Short-term metrics dominate strategy |
Single-cycle funding creates a vicious pattern:
Perpetual fundraising
Leadership spends 40-60% of time raising next year's funding instead of executing mission.
Short-term optimization
Grant metrics favor near-term outputs over long-term outcomes. Strategy bends to funder priorities.
No compound growth
Each cycle starts from near-zero. Success this year doesn't build capacity for next year.
Perpetual Social Capital addresses the temporal mismatch by creating capital structures that:
Capital cycles back rather than depleting
Each cycle builds on the last
Structure outlasts any single grant or donor
Key insight: The solution isn't better fundraising—it's capital architecture that matches mission timelines.
Nonprofit failure is primarily a capital structure problem, not a management problem. When funding operates on 1-3 year cycles but missions require 10-50 year timelines, organizations face perpetual fundraising pressure that prevents strategic investment in growth. Each cycle requires starting over.
Approximately 30% of nonprofits don't survive their first 10 years. This isn't primarily due to poor management—it's structural. Single-cycle funding models can't support multi-cycle missions, creating a temporal mismatch that accumulates over time.
Traditional approaches (better fundraising, more grants) address symptoms, not causes. Structural sustainability requires capital that persists across cycles—endowments, earned revenue, or perpetual capital structures that don't require constant replenishment.
Perpetual Social Capital (PSC) is IRSA's framework for funding structures that regenerate rather than deplete. Unlike grants (which terminate) or endowments (which restrict deployment), PSC preserves principal while continuously deploying capital toward mission.