In my travels around the country as the new president of theFoundation Center, I've heard a number of pundits and philanthropic leaders suggest that there are too many nonprofits in America. Some argue that 1.3 million nonprofits is simply too many for funders and the public sector to support; others point to examples of multiple organizations working on the same issue in the same neighborhood, or lament what they see as the inefficiency and ineffectiveness of many nonprofits. In my view, some of that frustration is driven by the very real pressures funders feel at a time when their assets have been ravaged by turmoil in the markets and many nonprofits are looking to them for a lifeline. But it's also a reflection of the growing influence of market-based thinking within the nonprofit sector. In its ideal form, a nonprofit marketplace assumes a mechanism by which foundation and individual donations are allocated to the highest-performing nonprofits as measured by a set of reliable, generally accepted metrics. Many good minds, a great deal of innovation, and growing resources have been applied to the creation of such a marketplace; that it will become a reality, either by design or through a more fluid, open-source process, is a given. There are limitations, however, to the market framework, the most important of which is the fact that the nonprofit sector exists precisely to deal with challenges that are the result of what economists would call market failure. If markets never failed and always allocated resources efficiently, we would live in a society where everyone had access to quality health care, adequate housing, and a decent income; felt safe in their homes and communities; and took clean air and pure water for granted. It is precisely because markets do fail and aren't perfect that we have as many nonprofits as we do. According to supporters of the nonprofit marketplace concept, the goal of such a market is to create maximum social value from every philanthropic dollar so as to ensure continued progress in solving a range of social issues. As the Austrian economist Joseph Schumpeterfamously observed, however, markets reward winners -- sometimes extravagantly so --and punish losers (sometimes harshly) through what he labeled a process of "creative destruction." In theory, a well-functioning nonprofit marketplace would efficiently allocate philanthropic resources to fewer nonprofits working at near-maximum efficiency to make the world a better place. Unfortunately, reality has a tendency to trip up theory. Today, for example, we find ourselves mired in a deepening economic crisis that, among other things, has caused the collapse of many of yesterday's most spectacularly successful firms. Unemployment is rising and predicted by many to reach 10 percent or more. People in growing numbers are in need of jobs and the services nonprofits provide. Indeed, a recent article in the Wall Street Journal suggested that financial sector professionals who had been laid off should consider taking a course at the Foundation Center! No one would argue that nonprofits shouldn't strive to be more effective and efficient. But in my view, the most constructive time to have that conversation is when resources, opportunities, and employment in other sectors are abundant -- not in the midst of a worsening recession. Right now, instead, we need to be doing everything in our power to support and strengthen this country's nonprofit sector. A nonprofit job is a job, plain and simple. Even if it's a job at an underperforming nonprofit, that job is giving someone an opportunity to learn skills of trust and cooperation, foster social solidarity, and contribute to the public good -- precisely those civic values that serve to underpin a robust democracy. I asked a friend the other night if he thought America had too many nonprofits. Without hesitating, he shot back, "Are you kidding, we don't have enough." -- Bradford Smith