Thursday, February 26, 2009
What’s Love (or Charity) Got to Do With It?
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
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
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????????
- 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.
Tuesday, January 27, 2009
Rush Limbaugh, backlash and other fears
It seemed no coincidence that about the time I was queasy over the say/replay of that unfortunate person, three other pings hit my radar. First, I got a call from the eighty-five year old woman who raised me, who happens to be a woman of color, to talk about how wonderful that our country has taken a step forward although my old hometown, according to her and she still lives there, has not. We talked about the old Jim Crow days and my family's "difference." My mom was a closet Texican. My dad, a Jew by birth who experienced both the quota system while growing up and life in a Nazi prison camp, lived in fear of being "found out" in our All Christian Town.
I'd gotten off the phone with her and was checking email when I discovered a request for "National 'Hug a Caucasian Day" from a young friend. Obviously, in some circles I don't qualify as a Caucasian, but I pass. There is a backlash of fear that some of our majority privilege might be diminished. It reminded me of the late sixties, being one of the few white people on the bus to Washington D.C. and feeling the hostility. "Hey, I didn't choose my color! I'm here trying to right the wrongs!" I wanted to shout. It got so bad on that bus ride-- between people threatening to burn us, jail us, or bomb us and my fellow travelers glaring and in one case, spitting on us--that the other three white people began to invent black relatives.
The final thread in this little saga was a note from my second reader (remember packet #5 is coming soon) to remark that I hadn't addressed white privilege in my thesis which is about governance and fundraising for NGO's. The thesis uses our school in Kenya as an example of what not to do. Okay, I whined a little. "That's not what this thesis is about" not because I didn't agree that there were issues , but because I didn't want to write another, perhaps more relevant thesis, about white people going to Africa to Save the Natives. It happens a lot. Still, all this concentration on race in such a short period of time made me feel, well, vunerable somehow.
Maybe what is really bugging me is that I have made so little progress. I cried for joy as I watched the inauguration so maybe I am just as hung up on race as Rush--in a different way. My emotional response to my second reader was a flashback to the sixties. Have I gained so little depth of understanding of the experience of people of color? And yes, as I hit "publish post" I am a little nervous about some people finding out I am a half breed Jew/Texican. What am I so afraid of? What are any of us so afraid of?
Monday, January 19, 2009
Imagine?????????
Of course, inspirational as all this is, those of you at Goddard in the SBC program know it's packet time. We're on the home stretch for this semester and I am personally on the home stretch for finishing the program. Ann Driscoll asked what suggestions I might have for improving the program. Natually, like you, I think the program is pretty awesome as it is, but living in this new world of possibilities we never dreamed of, I gave thought to how we might make "progressive education" even more progressive.
As I've said more than once, I believe we need to keep our program academically rigorous. Somebody says "progressive" and somebody else thinks it's just another way of saying "slacker." And maybe some of you really have a better handle than I have on how to do the Goddard thing in a more meaningful way. For my thirty cents (and we all know it was quite a bit more) I'd like to change the idea of "study plan" to "inquiry." I wish I'd started every semester with a question. In my case, looking at fundraising, the first semester's question would have been, "Why do people give money to non-profit organizations?" Each of you have your own questions, or maybe you didn't, and then your question might have been "What does 'sustainability' really mean? or social entreprenuership? or whatever you had on your mind. The "study plan" then might look more like, first I'm going to do a literature seach and describe what I found. Then I'm going to do a little field research and describe it. Then I'm going to write my conclusions and come up with the next logical question.
Okay, it's just my idea. Hopefully you have some ideas of your own. And by the way, I don't think anybody in the SBC program would find accreditation issues or rigor issues in approaching it this way. I just never thought about it that way. Now as I near the conclusion, I wish I had. And I'm only one student. I hope you have some thoughts of your own and if you are reading this, you take them time to post them. Thanks.
Sunday, January 4, 2009
Jambo from Kenya and Engineers for a Sustainable World
The women's co-op has been very successful with the Kiondo business (the baskets they weave and we sell in the U.S.) We've been so fortunate that our major problem right now is how to maintain the supply as we haven't found an economic way to ship. Right now, that's the only means of making money in Ngomano. If the microlending is successful perhaps more small businesses can germinate in this dusty thirsty financial climate. Too many people are hungry for us not to be able to figure out a simple thing like shipping, either. And hooray for Goddard for an education program that allows us to be here doing this as part of our studies.
For me, the joy is being here, watching more people who are genuinely interested in making a difference experience Africa, and being with my Kenyan friends who are so willing to share their hospitality, knowledge, and wisdom with us. I hope we'll be smart enough to repay a fraction of the gifts they so freely give.
Sorry if this blog is a bit disjointed. Second typing. First disappeared in the African cyberspace. I'll be back to you in five days to tell you how we did before proceeding on to Masaii Mara to work with Andy Aho on energy sources, pumping, and for the SBC's, social entrepreneurship, of which Andy is the Master. Wish all you were here for the first hand experience.