Thursday, February 26, 2009

What’s Love (or Charity) Got to Do With It?

This is a true story. My friend went to a hospital yesterday to have her second baby. She was in the period known as “transition” when she was offered epidural anesthesia for her pain. Most standards of care proscribe that when birth is imminent, anesthesia should not be offered as it slows the process, increasing risks to the infant. Transition is a time when most women will cheerfully admit later that they are out of their minds. My friend said yes. The birth was delayed by more than an hour. Later in a reflection of the event, she asked, “Why would they do that?” The argument might be made that they had more compassion for her suffering than they had concerns about the infant, but the more likely scenario is what is known in retail as “up sell.” Epidural anesthesia will increase the cost of a birth (i.e. add gross revenue) by an average additional $2000. If that sounds cynical, consider the sorry statistics of infant mortality and iatrogenic birth complications in America. We spend more and have worse outcomes than between 25 and 35 other countries in the world, depending on who is gathering the numbers. (http://kuow.org/programs/theconversation.asp?Archive=4-4-2008) But this isn’t about American healthcare or its well-documented problems. It’s about the changing role of non-profit organizations in the United States over the last fifty years. Yes, the hospital where my friend delivered her thankfully healthy baby girl is a not-for-profit health care center that regularly solicits donations, operates with a volunteer governing board and is guided by a religious order, the Sisters of St. Joseph of Peace. Can it be that they are shamelessly seeking profits?
Certainly it is common sense that just because an organization is considered charitable doesn’t mean it can operate at a loss. Budgets must be balanced. Those with insurance must pay the freight for those without. But as Robert Herman and associates discus in The Jossey-Bass Handbook of Non-Profit Leadership and Management, 2nd edition, Medicare and Medicaid are one of the few areas where Federal aid has not been cut. That’s about all that hasn’t changed in the non-profit sector. In Lester Salamon’s chapter, “The Changing Context of American Nonprofit Management” he writes, “Nonprofit management appears to be well along in the process of “reengineering” that calls to mind similar process that large segments of America’s business sector has undergone since the late 1970s.”(82) Even with a 167% increase in Federal Entitlement Program spending for Medicare and a 222% increase in Medicaid spending, non-profit acute care hospitals are having to adjust, although less so than other types of health care, social services, child services, job training and education support. (Salamon, 86) There are many factors that Salamon lists which come as no surprise to anyone alive since the sixties.
By the late seventies, federal support of non-profit programs surpassed individual gifts by 2 to 1. Reaganomics in the 1980’s began to reduce support by about twenty-five percent overall. Although there was some renewal of spending in the 1990’s, it’s been decreasing since 2000. Not just the funding has decreased either. There has been a change in philosophy. Salamon writes, “For one thing, during the 1980s and 1990s, government program managers were encouraged to promote for-profit involvement in government contract work, including that for human services. (84) Some astute observers saw this with the encouragement and popularity of HMO’s and the very aggressive marketing strategies these mostly for-profit agencies had to encourage seniors to assign their Medicare benefits to the HMO. The Federal Drug Bill intended to appease consumers about the rising cost of their medications was also such an assignment of government contracts to for-profit entities. One hardly needs to be reminded of the contracting of services to for-profit agencies in supplying the military with meals and other services for the war in Iraq. With the encouragement of increased contracts and capital, the number of for-profit organizations competitively seeking to meet these needs has also expanded. “The sharp decline in relative nonprofit share occurred among rehabilitation hospitals, home health agencies, health maintenance organizations, kidney dialysis centers, mental health clinics, and hospices…Even the sacrosanct field of charitable fundraising has recently experienced a significant for profit incursion in the form of financial service firms such as Fidelity and Merrill Lynch.” (Salamon, 86.)
At the same time federal spending was both decreasing and shifting its emphasis to the proprietary sector, private giving was slowing. “…Giving for human service, arts, education, health, and advocacy activities lagged behind the overall growth of the economy (62 percent verses 81 percent after adjusting for inflation). (Ibid, 86) Although private giving appeared to be increasing at the time of the publication of Salamon’s chapter in 2005, there can be little doubt that with eighty-four percent of Americans indicating that they feel things are headed in the wrong direction in a recent poll, individual giving will be strongly impacted. (NBC Nightly News, April 4, 2008.) In addition to a general economic downturn, there are other issues affecting non-profit giving.
People aren’t sure that non-profit organizations are effectively using their money or stewarding their causes. Salamon writes, “Reflecting this, the proportion of respondents in recent polls registering “a great deal of confidence” in non-profit organizations stood at only 18 percent as of May, 2002.” A Bank of America Survey of high net-worth household philanthropy conducted in October, 2005, revealed that although most households were either somewhat or very satisfied with the impact of their gifts, none were extremely satisfied. (The Center on Philanthropy at Indiana University, 2006, 23) As the number of non-profit organizations multiplies, so it seems, do the organizations to rate and in some cases, berate them. Websites like Charity Navigator, Charity Watch and the Better Business Bureau’s Wise Giving site might be great ideas, but they would have been unthinkable ten years ago. Salamon cites a 1996 article in The Harvard Business Review. Professor Regina Herzlinger listed the lack of three basic effective and efficient accountability measures that lead to distrust, “self-interest of the owners, competition, and the ultimate bottom-line measure of profitability.” (92)
Big name donors like the Gates Foundation are trying to change that, requiring objective measures of effectiveness. Charity Watch and the other evaluation websites address efficiencies by measuring things like the amount of donor money that is spent for fundraising and how much is spent on program administration as part of their rating standard. These factors must be considered as part and parcel of the change in philanthropy, just as are other market forces. “Nonprofit organizations are increasingly “marketing” their “products,” viewing their clients as ‘customers,” segmenting their markets, differentiating their output, identifying their “market niche,” formulating “business plans” and generally incorporating the language and style of business management into the operation of their agencies.” (Salamon, 94) The result may or may not serve the long term missions of the organizations, but it has created more partnerships and strategic alliances with for-profit businesses. This is one of the new “opportunities” in non-profit management. Another is commercialization. Salamon writes, “The clearest reflection of this is the substantial rise in nonprofit income from fees and charges, indicative of the success with which nonprofit organizations succeeded in marketing their services to a clientele increasingly able to afford them.”(93) Certainly social and demographic shifts in America support this. The baby boomers and all of their assets are coming of age—old age. It’s a double-edged sword. They are likely to support philanthropy but there is no doubt they are going to need traditional non-profit sector services like health care in unprecedented numbers--which brings us back to my friend, her “add-ons,” and some possible explanations.
Hospitals are the poster children for the identity crisis the changing nature of non-profit organizations present. Economic struggles in health care are the canary in the coal mine. “This tension has become especially stark in the health field, where third-party payors, such as Medicare and private HMOs increasingly downplay values other than actual service cost in setting reimbursement rates; where bond-rating agencies discount community service in determining the economic worth of bond issues and hence, the price that nonprofit hospitals have to pay for capital; and where fierce for-profit competition leaves little room for conscious pursuit of social goals…nonprofit institutions have had little choice but to adjust to these pressures…” (Salamon, 96) In a further explanation,Salamom writes “…What start out as sliding fee scales designed to cross-subsidize services for the needy become core revenue sources essential for agency survival.”(97)
What does this mean for the provision of things we have come to think of as essential to the American Way of Life? It may be that the Norman Rockwell picture of charity as good deeds by nice neighbors is gone forever. Capitalism has its trade-offs. Certain aspects and services of society remain at the center of the debate about what is a right in the United States and what is a privilege. Changes in the non-profit sector are symptomatic of our ambiguity about this argument. Perhaps it is time for America to stop thinking the nonprofit sector can do much of what governments provide in other parts of the world. It’s either that or lower our expectations, for which we will certainly need the option of anesthesia.

Thursday, February 19, 2009

Ten books you might think about reading if you work in nonprofit organizations

What I am discovering the more I do "board" work is that it is somewhat surprising that any non-profit organization survives. We all do good work but most of us who serve on boards are not as effective as we might/should be and most programs for stewarding our constituents are at best, inadequate. As I move toward that final day at Goddard College, I prepared a bibliography for those of you who may have any interest at all. Here are my top fifteen in alphabetical order rather than in order of importance.
Annotated Bibliography
1. Tom Ahern T. (2007) Raising More Money with Newsletters than You Ever Thought Possible, Medfield MA, Emerson and Church.
An unlikely title to find on a serious annotated bibliography, but this small book offers more practical and effective advice for successful fundraising than many texts with more serious academic titles and authors, especially as relates to using media as a means to achieve fundraising goals. Ahern includes advice on everything from format to content to targeted prospects. Best of all, his suggestions work quickly for real world nonprofits.

2. Bartkowski, J and H. Regis (2003) Charitable Choices: Religion, Race, and Poverty in the Post-Welfare Era, New York, New York University.
For those who have witnessed the shift from government responsibility to a “faith based partnership” in the provision of social services in the United States, this book provides an objective look at the “Charitable Choice Act.” It details the historical context of such a shift as well as the problems on both sides for such an economic expedient. Although the study focuses on the social and cultural impacts in Mississippi, there is much to extrapolate here for not only the United States, but the world.

3. Block, S. (2004) Why Nonprofits Fail, San Francisco, CA Jossey Bass.
Both practical and pragmatic, Why Nonprofits Fail describes the most common pitfalls for nonprofit organizations and offers strategies for recovery. Block uses examples from real world organizations to validate his observations and solutions. Although the solutions are useful, perhaps most useful is the knowledge that dysfunctional nonprofits are not unique to the reader. It makes it a lot easier to admit to the problem and to begin to work toward resolution.

4. P. Burk, (2003) Donor Centered Fundraising, Chicago, IL, Cygnus Applied Research.
Penelope Burk didn’t intuit why donors support the non-profit organizations they do, she studied and validated her research in a large sample of Canadian citizens. By doing so, she offers advancement and development professionals some of the first solid research in the field of donor attitudes. The reader understands from Burk’s book that there is a difference between an organization’s needs and what a donor needs to support the organization. By basing fundraising activities and stewardship on the donor, the organization has a foundation of practices for more sustainable fundraising.

5. Carver, J. (1997) Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations. 2nd edition. San Francisco, CA, Jossey Bass.
Chief Executive Officers and members of Governing Boards who seek continuous improvement of the work they do should begin with the books by Carver. By separating the work of the CEO (means) and the Board (ends) he describes a framework for keeping roles straight and organizational focus on appropriate goals and strategy, ultimately resulting in a more sustainable future for the organization. This simplified and understandable structure for governance allows both CEO and board clarity of purpose.

6. Christensen, C. (2003) The Innovator’s Dilemma, New York, Collins Business Essentials.
What does it take to make quantum leaps in organizational change? ‘Disruptive Innovation’ is what Christensen terms a shift in thinking from using the same answers when one should be developing a new set of questions. This business classic details examples of innovations in industry that succeeded because they disrupted ‘business as usual.’ It’s an easy extrapolation from examples used in this book to the kind of thinking required to go beyond incremental shifts in social change.

7. Cooperrider, D. and Whitney D. (2005) Appreciative Inquiry: A Positive Revolution in Change, San Francisco, CA, Berrett-Koehier.
Commonly one may approach interventions for organizational dysfunction with negative observations. Appreciative inquiry as a tool for solving problems may be best described as beginning to teach someone to build a boat by first motivating them to yearn for the sea. Cooperrider and Whitney believe that inquiry is change and if that inquiry is positive, i.e. appreciative, change is more likely to be both lasting and positive. Practical application of appreciative inquiry is also much less stressful for those of us who are somewhat conflict averse.

8. Ellerman, D. (2008) Helping People Help Themselves: From the World Bank to an Alternative Philosophy of Development Assistance, Ann Arbor MI, The University of Michigan Press.
Ellerman focuses on the deepest layer of economic life: The cultural values that determine the institutions that support the economy. His hypothesis is that in order for change to be sustainable, it must come from those within who are changing—not donors or nonprofit leaders. The premise seems obvious but Ellerman presents his argument with such clarity that the potential relationships between industrialized and other countries can be easily understood, at its best and at its worst. He also suggests constructive paths on which to travel the rocky road of “helping” in underdeveloped countries.

9. Hofstede G. and Hofstede G.J. (2005) Cultures and Organizations: Software of the Mind, New York, McGraw-Hill.
This book is a fascinating study of cultural norms in which the authors interviewed thousands of people in dozens of countries who were employed by IBM, a methodology that allowed for a more controlled look at fine distinctions and differences, even in countries where language and geography are similar. Hofstede and Hofstede’s interpretation of the data provide organizing principles for thinking about not only culture, but its consequences. This text is a classic and should be read by anyone working or studying in a culture not his or her own.

10. McCarthy, K.D. (ed) (1990) Lady Bountiful Revisited: Women, Philanthropy and Power, New Brunswick NJ, Rutgers University Press.
This collection of essays on the history of women’s philanthropy illuminates how women have used philanthropy to create social change in a culture that has allowed them few avenues to do so. What strikes the reader most is that despite cultural, economic and political barriers, women have been at the forefront of social justice issues in the United States and Europe at least since recorded history.

11. McIntosh G. and Rima S. (2007) Overcoming the Dark Side of Leadership: How to Become an Effective Leader by Confronting Potential Failures. Grand Rapids, MI, Baker Books.
The strength of this book is not in its title, but in the examples that assist the reader in understanding that what makes some leaders great also leads to their undoing. For those seeking to go beyond evaluation to assist with both personal and leadership growth, Mc Intosh and Rima offer some very important insights. It is especially useful in dealing with people of faith who may be wrestling with the fine line between their inner demons and divine direction.

12. McLaughlin, T. and Backlund A. (2008) Beyond Founder’s Syndrome: Moving to Nonprofit Success, Washington D.C., BoardSource.
Founders are unique in terms of their roles in organizations which offer idiosyncratic opportunities and challenges for the sustainability of a nonprofit organization. These challenges and opportunities are ably addressed in this book, which also provides suggestions for both avoiding and repairing founders’ syndrome, a dysfunction of non-profit organizations in which the founders fail to allow for or provide for succession or shared responsibility.

13. Principles and Techniques of Fundraising (2007 edition), The Big Red Book, The Fundraising School, The Center on Philanthropy, University of Indiana Fundraising School, Indianapolis, IN.
The only way to acquire this book legitimately is to enroll in the University of Indian Fundraising School basic course, which is worth it if only to have the book. It is a compendium of everything anybody might need to know about fundraising and includes hundreds of resources on dozens of related topics. Anyone involved in nonprofit organizations should have a copy, whether staff or volunteer.

14. Riggio R and Orr S.S. (2004) Improving Leadership in Nonprofit Organizations, San Francisco, CA, Jossey Bass.
Passion alone does not make for an effective non-profit organization. Riggio and Orr have written a book well-grounded in theory, research and practice that provides a comprehensive resource for both boards and CEO’s who wish to lead social change. Not just another management book, this one truly focuses on such important issues as the moral dynamics of charity and effective strategies for the twenty-first century.

15. Senge, P. Scharmer, C. O. Jaworksi J. Flowers B. (2005) Presence: Exploring Profound Change in People, Organizations, and Society, New York, Doubleday.
“Presence” is a concept adapted by Senge, Scharmer, Jaworkski and Flowers who write that the whole is entirely present in any of its parts. When problem solving we tend to think of individual parts (or issues) rather than seeing the greater whole. Solving difficult problems requires a new way of thinking that encourages deeper levels of learning for more complete awareness. Too often, the authors write, we remain stuck in old patterns of seeing and acting. This books details a methodology for a method that encourages new ways of seeing and discovering new possibilities for problem solving. Given the complexity of today’s problems, new ways of finding solutions are invaluable.

Monday, February 9, 2009

Standing at the intersection of School, Life and Work

It's lonely here at the corner--and not just because I get the sense nobody out there is reading this. It always feels a little lonely when something is finished, when you know you are never coming back to this place again. Yes, I finished my thesis, the annotated bibliography, the personal synthesis paper and all that other stuff required in the Student Handbook if you are to be qualified to call yourself a candidate for graduation. My next trip to Vermont will certainly be my last as a Goddard College student--at least that's what I think. (I thought that once before and ended up back for another run.) A friend who called earlier today reminded me that I'm making an assumption my work will be accepted. It's not as if it happened in a vacuum. Over the last year I have been communicating with my third semester adviser, my fourth semester adviser and my second reader. If it isn't quite right, we're close enough that I can amend it. So yes, really, no more cafeteria food, talent shows, music room--what was that pool game called? Most of all, no more Goddard friends having our residency reunions. Where else would I find such an engaged and engaging group of people to have passionate conversations with about, well, yes, school, life and work--not to mention saving the planet.
Some of the rest of my projects are on the verge of turning a corner too but I'm not sure where the road leads and frankly, I'm not feeling as prepared as I hoped to be directing, both figuratively and literally. (You can see what I mean by going to YouTube, searching "clayforearth" and clicking "getting there.") The film production company has just submitted it's first grant proposal to Sundance. My son and I will partner in a new green car business.My husband (and fellow student) Jim announces his retirement from the health care business, not because he's retiring but because it's time to do something else. Our friend was just here from Soysambu Conservancy and Jim is thinking maybe someone should be formally rescuing Cheetahs in Kenya. After alll, our first graduating class from the school in Ngomano is getting ready to take the National exams. Jim's efforts there are no longer that of starting up, but of maintenance and Benson is doing a fantastic job of keeping the momentum going.
But for all you readers who aren't reading this, never fear. I made a six month committment to keep up this blog for the college and I'm sticking to it. You'll be able to find out first hand how life after college goes--at least until the light changes.

Monday, February 2, 2009

Next????????

A week from today I'll hopefully be finished with another degree. Since one of the requirements for this Masters' is something called a "personal synthesis" paper that describes:
  • What you have learned about yourself through your entire Goddard experience
  • How you have developed as a contributor to/practitioner in your field as a result of your Goddard experience
  • How your final product is a reflection of this learning and growth
  • How you final product may contribute to the growth of your field

I've been reflecting like crazy. Fortunately, like most Goddard students I also have a busy life that allows me unexpected opportunities for both learning and reflection on a sometimes hourly basis. The subject of my final product is sustainability for non-profit organizations. I chose it because I volunteer for a number of these kind of organizations and was often astounded at how ineffective we can be at both governance and fundraising. "There's got to be a better way," I'd tell myself after another board meeting during which I wondered, if not for legal requirements, why anybody would need a board--let alone volunteer to serve on one.

Not to recount my essay ( soon be available down in the dusty stacks at the Goddard Library) but I'm pretty excited about what I learned. Here's the short version. There are some good ways to make boards more effective. If you are curious, check out the work of John Carver regarding rethinking what takes some of us off task and fumbling through the metaphorical weeds. There is excellent information on boards available on-line from BoardSource and other sites. If you serve on a board, check it out. Do not rely on your board orientation to teach you what you need to know to make your valuable time expenditure worthwhile. If your organization is having trouble raising funds (and who today can say they aren't) check out the University of Indiana's Fundraising School. They have week-long classes on fundraising fundamentals that SOMEBODY in your organization should attend. The class comes with a Big Red Book that has a bibliography that will easily get somebody like me through a doctorate if interventions for education addiction are unsuccessful. They also have a great website. If you sit on one board, consider sitting on two. It will make you a better board member for both boards because it will give you perspective. Finally, if you are determined to start your own non-profit, do all of the above plus write a business plan. It doesn't matter how passionate you are. Without a solid foundation (i.e. strategy for sustainability through governance and fundraising) you will be one of thousands of organizations that fails to make a lasting impact for its constituents and volunteers.

This month I'll be attending three board meetings. Like I said, life gives me opportunities to learn and reflect. What I can't really answer accurately is whether my study has or will contribute to these organizations. What I am sure of is, it hasn't hurt them. Any of you who have had experience with toxic situations know what I mean. Hopefully for a brand new graduate, that will be enough.