Column: Dr Paugh On Charities, Bermuda & More
[Column written by Dr Nicola Paugh]
In Bermuda’s current conversation about nonprofits, there is one very common perception: there are too many charities. This concern, often paired with warnings about duplication and inefficiency, has become a convenient—but unhelpful— narrative. It results in an unproductive and potentially harmful effort to reduce the number of charities, especially when we do not have the necessary data to do so strategically. Rather than focusing on reducing the number of charities, we should be asking a more important question: how can we elevate and sustain the good work being done.
Are there really too many? Firstly, we challenge the actual belief that there are too many charities. While we may have approximately 300 registered charities, the number of nonprofits [organisations that hire and pay staff to provide community programmes and services] is a much smaller subset, estimated to be around 100 by those in the Third Sector. The remaining group includes PTA’s, sports clubs, church groups and other small voluntary organisations which are distinct from a nonprofit that employs professionals to provide social and community services.
Where “duplication” exists, is it actually bad? Secondly, the instinct to streamline [they should all merge] may be well-intentioned, but it risks weakening the very essence of some of our best services. Nonprofits are not factories churning out identical widgets; they are responsive, community-rooted solutions to social issues. Having more than one organisation working in a similar area doesn’t necessarily mean they lack effectiveness or efficiency. It can mean innovation, quality, and diversity of approach- resulting in more targeted and tailored services. In fact, many organisations that appear to overlap are serving different segments of the population or addressing different dimensions of an issue. Is that duplication? Perhaps in the narrowest sense, but more importantly, this diversity reflects the complexity of problems and the need for tailored, diversified solutions. Much like competition in the private sector drives innovation, more than one nonprofit working in similar areas can lead to differentiation, improved services, and broader impact. This is a good thing.
From duplication to effectiveness. Instead of focusing on the narrative of too many charities with too much duplication, we should focus on effectiveness and impact. This means letting market [donor] forces fund and sustain those organisations producing great results effectively and efficiently. This can be achieved through three simple steps: 1] a focus on outcomes, 2] the consideration of accreditation and certification, and 3] better data collection by the charities regulator.
Look for outcomes. This is where smarter funding decisions come in. Donors—including government funders, foundations, corporate committees and individuals—must look for and reward outcomes. It doesn’t mean demanding perfection or burdensome reporting. It means a looking for clear evidence of impact. Mission statements matter, programme goals are important, people served is definitely relevant. But what we really need to look for are the measurable benefits of services and demonstrated changes experienced by those served. What percent of a nonprofit’s client base experienced a positive change? What effect did their services have on community issues? Did clients experience a positive change in their leadership skills, their health, their mental wellness; and if so, how much? Were mindsets or behaviours in the community altered in any way, and if so, how? Look for the evidence in numbers and stories [testimonials].
The Bermuda Foundation’s Bermuda Vital Signs Study1 and the Vital Signs Convening Reports2 are fantastic resources to help educate our community on the types of outcomes that are needed in Bermuda. Identifying evidence of outcomes should be the most important criteria to consider in determining the effectiveness of a nonprofit.
Consider Accreditation and Certification. The quality of operations and services also matters, and there are many instances of Bermuda’s nonprofits operating with the highest standards. How do we know? For two decades, Bermuda has had a robust internationally validated accreditation framework under the Bermuda National Standards Committee [BNSC] that assesses whether an organisation is using best practices in governance, financial management, and service delivery. Today we announced the transition of this service to the Nonprofit Alliance. 22 nonprofits are BNSC certified or accredited. Others have alternative international designations. These types of designations should be considered and rewarded. Incorporating this type of quality assurance into funding decisions sends a powerful message: we value effectiveness, and we are willing to invest in organisations that demonstrate it.
Digitisation and automation of the Charities Regulatory Function: What Bermuda truly lacks is not coordination, but clarity—specifically, clarity around who is doing what and to what end, at a sector level. That clarity can only come from better data collection by the charities regulator. A digitised, streamlined system for nonprofit monitoring and reporting would make it easier to see where services are concentrated, where gaps exist, and what outcomes are being pursued. This is why the Nonprofit Alliance has been lobbying the Charities Team at the Registry General to enhance the type of data it collects on the charitable sector as well as for the automation of that collection, such that it can be aggregated and made publicly available.
Role of Partnerships and Collaboration, and maybe Mergers! Of course, there is an important role for nonprofits to play in working together for the best community results. All nonprofits should be collaborating and working in partnership with one another- and many are! The majority of our membership which includes almost 70 nonprofits, are actively collaborating with one another- either through formal collaborative groups [such as our Youth Development Learning Community and Food Security Working Group] or through individual partnerships.
As for mergers – they have a time and a place. As regulatory and compliance demands increase, for example most recently with PIPA, and with the tightening of the funding landscape, there is something to be said for nonprofit boards to consider where mergers may make sense. This is where we need nonprofit boards to face difficult conversations about efficiency, effectiveness, sustainability and impact. But mergers are not a silver bullet for Third Sector challenges.
The key point is that we should be wary of treating the number of charities as the problem in itself. The real issue is whether our system is set up to identify and elevate what works. A smaller nonprofit sector is not necessarily a stronger one. But a smarter one—supported by clear data and best practices,—absolutely is. If Bermuda wants to build a more resilient and responsive social safety net, we must shift our focus from cutting numbers to building capacity.
Let’s stop asking how many charities is too many. Let’s start asking how we can ensure every nonprofit has the tools, resources, and recognition it needs to make the biggest possible difference. That’s how we can build a better Bermuda.
- Nicola Paugh, Nonprofit Alliance of Bermuda Executive Director
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