According to a May 2003 Harvard Business Review article by Bill Bradley, Paul Jansen and Les Silverman, the nonprofit sector could capture an extra $100 billion a year in increased social benefit by making five changes in the way it operates.

The research asked two central questions: Does money in the nonprofit sector flow from its original source to its ultimate use as efficiently and effectively as possible? If not, where are the big opportunities to increase social benefit?

According to the authors, nonprofits could save roughly $25 billion a year by changing the way they raise funds. By distributing funds more quickly, they could contribute an extra $30 billion to social causes. Organizations could generate more than $60 billion a year by streamlining and restructuring the way in which they provide services and by reducing administrative costs. And they could free up even more money, an amount impossible to estimate, by better allocating funds among service providers.

The authors admit that this $100 billion opportunity won't be captured overnight; pursuing it will take sustained commitment and an openness to questions and conversations that may pose challenges for a sector whose record of success is justly honored. McKinsey's early research suggests, however, that the payoff in terms of advancing the sector's core mission appears so large, especially in an era of tightening public budgets, that such a dialogue deserves a central place in the sector's agenda in the decade ahead.

Download the full article at the Harvard Business Review web site. (Please note: HBR charges a fee to download any article).