Article from Don Griesmann's Nonprofit Blog - extract:
"It appears to me that there are several reasons why we have small ... and mid-size ... There are community needs that are best served by them. They are "on the ground" meeting priorities, goals and objectives that are not or cannot be met by larger nonprofits such as national groups, universities and others which have a different mission and vision."
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Source: Don Griesmann's Nonprofit Blog
You might also want to read some related items from the US, arising out of the recent financial 'meltdown':
Should Nonprofits Be More Like Business? - Blue Avocado
Nonprofits proud to be “unbusinesslike” these days - Pierce Arrow