About Bob Bob serves as President and CEO of GuideStar and serves on the boards of Vision TV, Grameen Foundation USA, and the AAFRC Trust for Philanthropy. More...
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Posted on October 26th, 2009, in these categories: Nonprofit Practice
Most nonprofits are hard at work, laboring under challenging conditions with funding getting tougher by the month and demand for services continuing to increase. Others are working on important issues to elevate the sector to new heights, such as promoting transparency and accountability and measuring effectiveness and impact.
And yet public skepticism about the nonprofit sector (and I would add most public institutions) continues to grow. Why, when our work is so important and so badly needed?
All it takes is an occasional bad story to reinforce the public perception that nonprofits are not always what we think, or would like them to be. Exhibit A is a front-page series last week in the Washington Post: “One in three of D.C.’s AIDS dollars earmarked for small groups went to organizations marked by financial problems and questionable expenditures.” The articles detail a litany of lack of services, dubious résumés, ghost employees, staff turnover, double billing, and missing records. And to quote one of the headlines: “Yet, the Funds Still Flowed.” The Post series reviews 90 groups that were awarded a total of more than $80 million. The newspaper “built a database using thousands of pages of tax returns, audits and lawsuits; real estate, D.C. Council and court records; and corporate and police reports.”
All of these allegations are amplified by the fact that in today’s tough economy donors are more sensitized to the issues of efficiency and effectiveness. They want to know, is my hard-earned money being used wisely and making a difference?
Although the above-quoted allegations still need to be proven, they put the nonprofit sector on the defensive once again. What can we do to fight back? Here are my three suggestions:
- Embrace transparency and accountability and make them a baseline for appropriate nonprofit behavior. Be sure your organization is on GuideStar and takes advantage of the GuideStar Exchange program to share even more important information. Be wary of organizations that aren’t willing to be transparent. If we don’t establish our own good governance principles, we risk more regulation.
- Demonstrate to your stakeholders that you’re committed to making progress and measuring success. How are you doing? What are your goals? How do you measure short-term and long-term success? Your stakeholders deserve to hear regular reports from your organization.
- As the largest single source of revenue to the nonprofit sector, government at all levels needs to improve its due diligence before it awards tax dollars to charitable organizations. It needs to do more to investigate the charitable status of nonprofit organizations and demand transparency, accountability, and capability.
It hurts the entire nonprofit sector when the public thinks nonprofits are being used for political or personal reasons and aren’t providing badly needed services effectively and efficiently. It is in everyone’s interest in the nonprofit sector to elevate our practice and embrace transparency in all our work.
Posted on October 13th, 2009, in these categories: Health Care | Public Policy
I’ve been disappointed in the tone of the public debate on health care reform. Rather than have a reasoned discussion about different approaches to this complicated and difficult issue, we seem to be bombing each other with slogans and sound bites.
Sunday’s Washington Post has a front-page story that says, "The nation’s political discourse seems sour, angry, even dangerous," and that "‘uglier than it’s ever been’ is a phrase often volunteered" in this debate. The article reminds us that we’ve always had cycles of unruly political discourse, starting from the founding of our nation. What may be different today is that the Internet and cable television can much more easily spread over-the-top rhetoric (which, as the article points out, is often financially lucrative.)
George Will, the frequently grouchy conservative columnist, takes well-off liberals to task in his Sunday column, suggesting that "our vocabulary is composed exclusively of references to rights, a.k.a. entitlements." In the health care debate, Will observes, "Each proposal must be invested with the dignity of a right. And since not all proposals are compatible, you have not merely differences of opinion but apocalyptic clashes of rights." I think his observation holds equally true for conservatives and liberals in the health care debate.
A recent column by Roger Cohen in the New York Times brought this all into focus for me. "Whatever may be right, something is rotten in American medicine. It should be fixed. But fixing it requires the acknowledgment that, when it comes to health, we’re all in this together. Pooling the risk between everybody is the most efficient way to forge a healthier society." But Americans hear "pooled risk" and think, "Hey, somebody’s freeloading on my hard work."
Concludes Cohen, "Americans, born in revolt against Europe and so ever defining themselves against the old Continent’s models, mythologize their rugged (always rugged) individualism as the bulwark against initiative-sapping entitlements. We’re not talking about health here. We’re talking about national narratives and mythologies—as well as money. These are things not much susceptible to logic. But in matters of life and death, mythology must cede to reality, profit to wellbeing."
One of the things I like about working in the nonprofit sector is that there is an explicit commitment to thinking of others, not just our own well-being. We donate because we want to share our resources with others, often those less fortunate than us. We volunteer because we have skills and energy that can help others. We work for nonprofit organizations because it is an opportunity to serve others and make this a better world. The health care debate could use a little less complaining about me and mine and a lot more talk about you and us.
Posted on September 25th, 2009, in these categories: Health Care | Public Policy
I’m still trying to decide how health care cooperatives work and whether they can reach the scope and scale that our health care system needs to introduce some of the reforms that are being discussed.
Last week I interviewed Steve Delfin, executive director of the National Credit Union Foundation, who told me about how credit unions work. His blog on this issue is interesting. We learned from him that cooperatives are owned and controlled by their members—the people who use the co-op’s services or buy its goods. Any surplus revenues are reinvested in the business.
Steve also recommended an interesting Web site, the National Cooperative Business Association, or NCBA. Here’s a link: http://www.ncba.coop/abcoop_health.cfm. The site has a lot of interesting information on why NCBA thinks cooperatives can work for health care delivery. On it I learned that there are about 30,000 cooperatives in all, and that they have a significant impact in four sectors of the U.S. economy: agriculture and food, credit unions, mutual insurance, and rural electric. But not health care!
NCBA reports that there are four kinds of co-ops. Every model has at least a few examples of health care services.
- consumer-owned co-ops (credit unions and rural electric co-ops)
- purchasing cooperatives (hospitals buying equipment together)
- worked owned cooperatives (there are several in home health care)
- producer cooperatives (such as Land O’Lakes)
Unfortunately, the impact of consumer-owned health cooperatives today is relatively small. The NCBA estimates that approximately 2 million Americans are member owners of consumer-owned health-care cooperatives.
The NCBA identifies some important unanswered questions that policy makers will need to address:
- Will the co-ops be seeded by government grants or will they be loans?
- How much control will the government exert?
- How much time will the government give to get health care co-ops started?
- Will the co-ops be allowed to form into a federated co-op on a national scale?
- Will there be minimum federal standards that supersede state law?
- What laws would regulate regional co-ops?
These seem like pretty difficult and complicated issues to solve. What do you think?
Posted on September 18th, 2009, in these categories: Health Care | Public Policy
Nonprofit medical cooperatives still seem to be in the picture as an alternative to the so-called public option as part of the medical reforms being discussed.
In my last blog on this issue, I mentioned there are very few co-ops in the GuideStar database, and I expressed some doubts about the capabilities and scalability of creating new nonprofit co-ops to provide health services. To learn more about how co-ops work, I contacted a friend, Stephen Delfin, who serves as the executive director of the National Credit Union Foundation. Steve says that "credit unions are not-for-profit, member-owned financial service cooperatives. The thread between different types of coops is the non-profit, member-ownership stature and commitment to social responsibility."
He says they all operate with a commitment to the following principles:
- Open and voluntary membership
- Democratic control
- Non-discrimination
- Service to members
- Distribution to members
- Building financial stability
- Ongoing education (financial)
- Cooperation among cooperatives
- Social responsibility
Steve also told me that the co-op is a "business model uniquely positioned to tap into the post-economic melt-down psyche of Americans. Whether in health care or financial services, the business motives of cooperatives are not profit, but service to members." He discusses the cooperative model in a recent blog.
After talking to Steve, the concept of a nonprofit health co-op sounds a little more intriguing to me. Wouldn’t it be great to be a member of an organization focused solely on providing me and my family with excellent health care, rather than fighting through all the paperwork and bureaucracies that exist in health care today?
In my next post, I’ll take a closer look at how current health co-ops work.
Posted on September 3rd, 2009, in these categories: Uncategorized
I’m taking a few days off to recharge my batteries and freshen the brain before we jump into the hectic fall routine of deadlines, conferences, and budget planning.
Here in Washington, daytime temperatures are barely in the 70s, and the nights are dipping into the 50s. Without even looking at the calendar, I can sense we’ve moved into September. School buses are back on the road in morning rush hour. The hordes of tourists posing for pictures in front of the White House, down the street from our offices, are beginning to dwindle. My backyard is sprinkled with fallen leaves.
"Changing of the seasons." I’ve always liked that term. It suggests a certain predictability, the dependable rhythms of life. The heat and humidity of summer ultimately give way to the coolness and color of the fall. It happens every year. And yet there is change too. Things don’t stay the same. That’s what makes life so interesting.
Here are my resolutions for this weekend: Enjoy friends and family. Take special notice of my surroundings—the color in trees, the nighttime skies with a full moon, the graceful shape of a front porch. Bicycle every day.
And when I come back next Tuesday? I’ll think about that later.
Posted on August 24th, 2009, in these categories: Nonprofit Practice
GuideStar’s mission is to help donors make better and more informed decisions and—just as important—help nonprofit organizations become more effective and efficient.
Earlier this year I traveled to Los Angeles and witnessed an amazing event. There in a large hotel ballroom were more than 200 nonprofit-organization managers gathered to learn how to make their organizations more effective, by aligning their activities and improving their organizational focus.
One of the speakers was Marissa Tirona, who spoke about how to build an organizational dashboard. I liked her session so much that we invited Marissa to be part of a free GuideStar Webinar. Marissa is a project director with CompassPoint Nonprofit Services, one of the country’s leading nonprofit consulting organizations, which is based in the San Francisco Bay area. She provides management coaching, training, and consulting services primarily in the areas of nonprofit finance, leadership, strategy development, impact metrics, and governance.
More than 1,000 nonprofit professionals registered to attend Marissa’s Webinar, "How to Build an Organizational Dashboard: Track and Measure Organizational Performance Easily and Inexpensively."
Karen Rayzor, GuideStar’s director of nonprofit relations, moderated the Webinar. She reports that more than 60 questions were submitted prior to and during the presentation. She says there was a collective sigh of relief when Marissa addressed a question from Terri Heckman asking whether the dashboard should be used to evaluate an organization’s executive director or staff. (The answer: no, but there are other metric processes for doing that.) Other questions included:
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"Is a dashboard something we should share with the public?"
Deborah Ricci. (Answer: it’s more for internal work, but some of the highlights could be)
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"How do you guard against cherry-picking metrics to look good?"
Mike Mithani (Answer: it’s important to be accurate and honest, after all this is about organizational improvement)
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"Can you explain the difference between setting the annual goals for the organization, which we review periodically, and the dashboard?"
Natalie Apchin (Answer: it depends on your organization; some set monthly and quarterly goals as an accompaniment to the annual goals)
Interested in Marissa’s answers to these and other questions? You can find the audio stream and the presentation’s PowerPoint slides on our Webinar archives page. Once there, you will also find links to previous Webinar presentations.
Let us know what you learn and what your organization is doing.
Posted on August 21st, 2009, in these categories: Public Policy
This week’s debate about the Obama administration’s health plan has focused on a "nonprofit co-op" alternative to a government-owned insurance plan.
I started to wonder, what exactly are nonprofit cooperatives? Tuesday’s New York Times describes them as private, nonprofit, consumer-owned providers of health care, much like the co-ops that offer telephone, electric, and other utility services in rural areas. My understanding of co-ops is that one of the key characteristics is that they are owned and governed by the customers.
The Times article reports a study done by University of Wisconsin professor Ann Hoyt "that there are nearly 30,000 cooperatives with revenues of more than $650 billion a year. They include farm co-ops, retail food co-ops, rural telephone and electric co-ops and credit unions—entities as diverse as Ace Hardware, The Associated Press, Blue Diamond Growers and Ocean Spray."
I asked Chuck McLean, GuideStar’s VP of Research, what we could learn from GuideStar’s database about nonprofit co-ops. Chuck points out that many cooperatives are not tax-exempt and thus not in our database. In fact some co-ops are even for-profit, so it gets even more confusing. Furthermore, there’s a big challenge with assigning the correct NTEE taxonomy code to a nonprofit co-op, which makes finding it on GuideStar more difficult.
Chuck’s research finds that there are currently about 1,300 tax-exempt nonprofits coded as cooperatives in the IRS Business Master File. About half of them are telephone and electric co-ops, and these organizations account for the overwhelming majority of nonprofit co-ops’ revenue and assets. Only 16 of the organizations are involved in providing local health care.
I have a hunch that if this idea about nonprofit co-ops continues, it will also spill over into the already heated debate about describing what is a "nonprofit health organization" and how they differ from for-profit hospitals in service and price. Soon to follow, I’m sure, will be more debates about the appropriate levels of compensation, transparency, and accountability for nonprofit co-ops.
I’d like to hear more, too, about how officials expect to create nonprofit organizations capable of providing health services to a large number of people. I don’t know much about how health services operate, but I do know that starting and operating sophisticated nonprofit organizations is hard work—and expensive, too. And it takes time to do it well!
Stay tuned as the nonprofit sector gets more involved in the health care debate. Here at GuideStar, we’ll try to add some light to a discussion that has been all too short of solid information.
Posted on August 11th, 2009, in these categories: General
I’ve been asked by several readers to describe "theory of change." So I decided to go to one of the experts, Jacob Harold, program officer at the Hewlett Foundation. Jacob is a frequent writer and speaker on the subject and recently conducted a free Webinar for GuideStar. Jacob has also been very helpful to me personally in thinking through GuideStar’s long-range strategy.
I’m sure there are a few readers already thinking that what we need is more action and less academic talk. I like action, too. But it’s easy to create action. Ask any nonprofit employee, and they’ll tell you they are overworked and drowning in opportunity. But are they doing the right work? And what results are they getting? That’s why I think it’s worth the effort to spend some time thinking about your organization’s "theory of change." Think of it as a map that helps keep you on course and focused on creating results.
Here’s a summary of our recent discussion on "theory of change."
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What is a thumbnail definition of "theory of change"?
A theory of change is your understanding of what has to happen to reach your goal.
Almost every action has a theory of change. You reach out to turn a doorknob because you believe that’s part of what has to happen to open a door.
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In your experience, do most nonprofits have a theory of change?
Most every nonprofit has a theory of change—even if it’s just implicit. For something simple like opening a door, there’s no need to write down your theory of change. But if you want to tackle something complicated like homelessness or global warming, it becomes more important to specifically articulate why you think a particular approach might work.
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What makes a good theory of change?
Where possible, a theory of change should be based on hard scientific evidence. That doesn’t mean that every nonprofit has to go out and do a lot of research. But nonprofit leaders should know if there’s evidence to back up their approach. If there is evidence that an approach doesn’t work (like abstinence-only education), then you can avoid repeating the mistakes of the past. Reinventing the wheel is bad enough. What’s worse is reinventing the square wheel.
There are some rare cases where a problem or an intervention is so new that there may not be a lot of research available. In those cases, though, having a theory of change is just as important—if not more—because it will force you to make your assumptions explicit.
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Can you give a few examples?
There aren’t as many good examples floating around as I’d like, but here are a few thoughts re some that are already available:
Probably the best example is from EMCF: http://www.emcf.org/how/theoryofchange.htm.
Another good one is for the Harlem Children’s Zone: http://www.tc.edu/i/a/document/9857_ExecutiveSummaryHCZ09.pdf.
There’s a "theory of change and a theory of action" for the Harvard Family Research project: http://www.hfrp.org/evaluation/the-evaluation-exchange/issue-archive/professional-development/theory-of-action-in-practice.
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How is this different from a logic model?
A logic model is a more specific description of what you do and what will result from it. Many organizations might use the same theory of change—but a logic model is specific to one organization’s work. Logic models are often structured as a big arrow from inputs (what you use) to activities (what you do) to outputs (what happens) to outcomes (what lasts).
Ultimately the words are less important than these three basic rules: 1) stay focused on results, 2) be clear about what you’re doing and why, and 3) have a way to get feedback to find out if you’re successful.
You can find more on this topic here and glossaries here and here.
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What are some resources you can suggest for those wanting to learn more?
One resource, no surprise here, is www.theoryofchange.org. There’s also a good exchange on the Huffington Post between Hewlett Foundation president Paul Brest and Sean Stannard-Stockton of Tactical Philanthropy here. In 2004, the consulting firm Bridgespan published a seminal article on this topic in the Stanford Social Innovation Review entitled "Zeroing in on Impact."
(Disclosure: the Hewlett Foundation has funded GuideStar, Bridgespan, SSIR, and www.theoryofchange.org.)
Posted on August 3rd, 2009, in these categories: Economy | General
On July 22, I joined Brad Smith, president of the Foundation Center, on a teleconference to talk about the future of the nonprofit sector. It was the first time GuideStar and the Foundation Center have collaborated on such an event and only one of a few things our organizations have ever done together. It was great fun, and I really enjoyed working with Brad and his staff. After many years working for foundations, Brad brought interesting insight into the world of how foundations think and work. After such a great start, we are pursuing other activities to do together.
With moderator Katherina Rosqueta, founding executive director of the Center for High Impact Philanthropy at the University Pennsylvania’s School of Social Policy & Practice, ably guiding the conversation, Brad and I discussed the impact the economy is having on the sector and what we believe it means for the future. I presented the results of our latest nonprofit economy survey, which covered March through May of this year. Some 52 percent of participants said contributions to their organizations had decreased compared to the same period last year, 58 percent reported that demand for their organizations’ services had increased, and only 36 percent said that they had adjusted their 2009 budgets in response to the recession.
I was surprised by how similar these results were to the findings from our previous survey, which covered October 2008 through February 2009. In particular, I expected more organizations to have altered their budgets after several months of reduced income.
I see changes coming in the near future as the year unfolds. I suspect many nonprofits are living off reserves, which they can’t do forever, or making only minor adjustments to their current budgets, hoping things will improve soon. I also believe that different types of nonprofits are feeling the recession’s impact in varying degrees. Some subsectors and some regions of the country are being hit harder than others. Still, I believe that overall, the sector’s going to have to come up with new ways to cope with fewer resources and greater demand. Outsourcing, more meaningful collaborations, pooling resources, and bartering are just some of the options we need to consider. In the end, I think that our individual organizations and the sector as a whole will be stronger because of these efforts.
We’ve posted a recording of the teleconference on our site. I invite you to listen, and I welcome your comments.
Posted on July 28th, 2009, in these categories: General
I’m not much of a television viewer these days, other than sports and news, and probably would have missed NBC’s The Philanthropist it if it hadn’t been for the kerfuffle caused by the Council on Foundations. In late June, the COF came out with a statement saying in part: "[THE NBC prime-time program]The Philanthropist is to charitable giving as The Pink Panther is to police work. The show is a romanticized, action/adventure depiction of a powerful businessman’s efforts to find meaning in his life by applying his fortune and acumen to the problems of struggling communities in developing countries. … While some elements may ring true, very little of the first episode conveys the realities of philanthropy." (Read the entire statement here.)
This statement generated a flood of comments. In his blog, Sean Stannard-Stockton gave a spirited defense of having fun while doing good work at the same time. Bill Schambra blasted the COF—and much of organized philanthropy for that matter—in a Chronicle of Philanthropy piece, saying, "American philanthropy can heap contempt upon The Philanthropist’s short-sighted, sentimentalized, amateurish understanding of charity. Or philanthropy can pause long enough to consider that, in its determined and single-minded drive toward professionalization, it may in fact be systematically cutting itself off from its own deepest wellsprings." (Read his review here.)
Last week, Schambra and the Hudson Institute hosted another of their interesting debates, this time on The Philanthropist. Guests included Sean Stannard-Stockton, Ian Wilhelm from the Chronicle, and Steve Gunderson from COF. (A video and recording of the session will soon be posted on the Hudson Institute site.)
Another guest was Tom Fontana, writer and executive producer for The Philanthropist. He has a long list of creative credentials and awards, including writing and producing for the television series St. Elsewhere, Homicide: Life on the Street, and Oz. Fontana’s ambitions are simple: make interesting television programs that generate ratings. Stuck in a 10 o’clock time slot in the middle of the summer, a recent Philanthropist episode had 5.5 million viewers, which is a lot of people by philanthropy standards.
Fontana’s style is to use real-life experiences—from doctors, detectives, and jailers—to hang his plots. So I think it’s pretty interesting that he would think the adventures of a freelance philanthropist would be sufficiently entertaining for a television action series. It should make those of us hard at work in the nonprofit sector proud to know our field is seen as exciting! And it underscores the rising popularity and social acceptability of charitable giving, which is good for both our work and the people we serve.
By the way, I asked Fontana why he selected the title The Philanthropist, since most Americans who donate to charity and volunteer probably don’t have a clue as to what that word means. Fontana said he didn’t really know, but the producers certainly didn’t test it before they decided to use it. I wonder if the ratings would have been higher if they had chosen a different title?
The panel discussion got bogged down for a while debating the distinction between charity—giving from the heart like The Philanthropist does—and what professional grantmaking does—what we today call philanthropy—focused on research and outcome measurement.
We can all get bogged down if we’re not careful. In the end, The Philanthropist reminds us that most charitable giving is motivated by a variety of reasons, priorities, and values. That’s what makes American generosity so special, and that’s why we need to be careful not to expect all giving to be driven by evaluation and analysis. Come to think of it, that advice may be useful when watching an action-packed TV program as well. This one just happens to touch on a subject that’s near and dear to our hearts.
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