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 By Bob Ottenhoff on December 9th, 2010, in these categories: Government | GuideStar | Nonprofit Practice In this holiday season we tend to focus on the role of individual contributions to charities. This is an important subject since many nonprofit organizations receive the bulk of their giving during the last few months of the year. But many nonprofits receive the majority of their funds not from individual donations but from service fees and contracts, particularly those in vitally-needed health and social service agencies. Sunday’s New York Times reported on the mounting debts of states, nearing several trillion dollars, and predicting a crisis point where “it could overwhelm them in the next few years.”
A new study underscores the vulnerability of state and local revenues and how it is beginning to impact nonprofit organizations. Released by the National Council of Nonprofits (NCN), the special report concludes that “The decisions to rely on nonprofits to provide services have sound policy, economic, and administrative justifications. Yet the convoluted, disjointed, and patch-worked laws and practices by which governments contract with nonprofits have led to nonpayment, underpayments, and late payments to nonprofits, in part because contracting and reporting processes have become excessively complex and irrational.”
The report lists a few of the problems occurring in many states:
- Government does not pay full cost of the services provided
- Contracts terminated mid-term
- Salaries frozen or reduced
- Jobs eliminated
- Late payments
- Benefits eliminated
- Burdensome contracting
- Excessive reporting requirements
Among the shocking results included in the report:
- Illinois’ Comptroller released a 50-page list of more than 2,000 nonprofits that the state has failed to pay almost half a billion dollars – and that’s for just the first half of this year;
- New York’s Comptroller found that 92.5 percent of the state’s contracts with nonprofits were late and the state had delayed paying numerous nonprofits for multiple years;
- The U.S. Government Accountability Office found that – for a single federal program – some states pass all dollars to the nonprofits to pay for the services while other states take funds for themselves; and
- The Congressional Research Service warned, “It appears that governments, especially state governments, may be contributing to the financial difficulties of nonprofit organizations, even to the point of not paying for contracted services.”
NCN takes a surprisingly optimistic outlook on solutions – probably more upbeat than I can muster as we work through this recession. Their special report concludes, “Although the convoluted ‘system’ is multi-jurisdictional, multi-layered, and excessively-complex, the solutions are fairly straightforward. Rather than requiring a big investment of money, most of the solutions can be achieved through intentional coordination and discipline in follow-through to make positive change for those being served, taxpayers, and the community at large.”
If you’re interested in learning more and sharing information about what is happening in your state (for better or worse) as well as your ideas for healing the broken system you can go to this link: http://www.govtcontracting.org/.
Posted By Bob Ottenhoff on October 26th, 2010, in these categories: Economy | Fundraising | GuideStar | Nonprofit PracticeWhen I first started writing this blog about the BBC, I had the world’s economy on my mind. But then a controversy over Juan Williams erupted adding a new twist.
With our economy stuck in neutral, it’s been interesting to follow the policy debate raging over what to do about it. Some pundits are encouraging another government stimulus plan in order to help prime the pump of development; others think the last plan was a horrible mistake and have turned it into a potent campaign target. It seems likely that gridlock will prevail and we’ll get neither more stimulus spending nor any significant changes in government spending.
Meanwhile, in the United Kingdom, the Conservative party leadership has proposed a massive cut in government spending of $127 billion over four years. The Wall Street Journal termed the U.K. a “global test case in the argument of choosing austerity over stimulus to repair the economy.”
One of the cuts that caught my eye is the one to the British Broadcasting Corporation (BBC). In return for a deal that guarantees a continued license fee for the next six years, the BBC agreed (or caved to government pressure, as the New York Times put it) to a freeze on its income and the assumption of new expense obligations previously handled by the government. The license fee obligates TV watchers to pay nearly $230 for every household with a color television set. The New York Times estimates that the license fee brings in $5 billion per year, and makes up nearly all of the BBC’s budget. The Guardian estimates that new additional costs and the license freeze will mean in effect that the BBC will experience a 16 percent cut in real terms.
The guaranteed revenue stream has helped the BBC become the best public broadcaster in the world and one of the world’s most powerful media companies, public or private. So although any cut is painful, the BBC has successfully fought off commercial competitors and critics who wanted to see the fee reduced or eliminated, as well as ensured itself six years of predictable revenue─not a small feat in a world of financial chaos.
Unlike the BBC, American public broadcasters rely primarily on voluntary contributions and local support for the bulk of its revenue. Our federal government contributes a measly $400 million or so for the entire system of over 1,000 public radio and TV stations. Most state governments provide some type of support, although these appropriations are under fierce attack at the moment in many places.
Last week’s firing of Juan Williams has brought some angry calls by politicians urging the elimination of federal government support. What these critics fail to understand is that American public broadcasting is primarily a collection of locally controlled and financed institutions, with relatively weak national organizations. This is both a strength and weakness. It is nearly impossible to destroy public radio because of its de-centralized nature. But the challenges in cobbling together funding from many local sources within a membership organization context─unlike the BBC’s license fee─means it will never have the domestic or international influence that the BBC enjoys.
Since there is no chance of a national license fee, the decentralized approach is not our only alternative─it may indeed be the best way to serve a country as diverse as ours.
Posted By Bob Ottenhoff on March 23rd, 2010, in these categories: GeneralDavid Brooks of the New York Times wrote on February 4 about the sociologist Eugen Rosenstock-Huessy. Just before World War II, he emigrated to the United States and began teaching at Harvard, converting his lectures into English. But he had a problem. According to Brooks:
He noticed … that his students weren’t grasping his points. His language was not the problem, it was the allusions. He used literary and other allusions when he wanted to talk about ethics, community, mysticism and emotion. But none of the students seemed to get it. Then, after a few years, he switched to sports analogies. Suddenly, everything clicked.
"The world in which the American student who comes to me at about twenty years of age really has confidence in is the world of sport," he would write. "This world encompasses all of his virtues and experiences, affection and interests; therefore, I have built my entire sociology around the experiences an American has in athletics and games."
In the same article, Brooks refers to Professor Michael Allen Gillespie of Duke University, whom he paraphrases as saying "American sport teaches that effort leads to victory, a useful lesson in a work-oriented society. Sport also helps Americans navigate the tension between team loyalty and individual glory. … Gillespie appreciates the way sports culture has influenced American students too. It discourages whining, and rewards self-discipline. It teaches self-control and its own form of justice, which has a more powerful effect than anything taught in the classroom."
So that’s it. The code is broken. We in the nonprofit sector have been describing our work in earnest and serious ways, when the world was thinking sports. We don’t talk the sports lingo well enough.
It’s ironic, since so much of what we talk about is really "inside baseball" and so arcane no one can understand what we’re talking about. Maybe we need more talk of home runs out of the ballpark when we have a successful program. Or asking for patience when we’re only hitting singles. Could we say our programs are in the red zone when we’re at a critical moment? Successfully completing a phase of a project could be moving the chains. Nearing the end of a program could be first and goal.
How many times have you heard someone described as not a team player? And when was the last time you heard of an executive director taking one for the team? Development directors get it. They’re always talking about more shots, more goals. And how many times have you thrown a Hail Mary pass to a funder? Maybe even tried swinging for the fences with the audacity of hope.
We’ve got as much passion as any rabid fan. I think we can make this work.
Posted By Bob Ottenhoff on December 28th, 2009, in these categories: GeneralBack from a few days of travel with my family and an opportunity for a little rest, relaxation, and reflection. Now it’s back to digging out from last week and thinking about the year to come.
I’ve always resisted making formal New Year’s resolutions. It feels artificial and confining to me—too much like those who lurch from one diet to another or buy a gym membership and never quite make it. Those kind of resolutions usually don’t last very long because they’re not truly connected to our real beliefs. On the other hand, I’m a strong believer in setting personal and organizational goals and striving to the best of my ability to reach them—not just at the beginning of the year.
Sometimes setting goals can leave us with a false sense of control. Or become all consuming. I got to thinking about setting goals a week or so ago, when David Brooks of the New York Times had a column about President Obama’s governing style. One of the things that caught my attention was the fact that Brooks thinks Obama has learned how to "embrace the complexity."
Mark Whitaker from NBC offers a slightly different perspective in a piece in today’s Washington Post, "Lessons from Obama’s First Year." He makes this interesting observation: "Given all the rejection and dislocation in his youth, is it any wonder Obama became so invested in imposing order on his adult life? … In President Obama’s case, the highly organized defenses he developed as a result of his dysfunctional childhood many have left him ill-prepared to confront the more unruly forces of cynicism, egotism and self interest that hold sway in Washington, on Wall Street and on the world stage." Governing, Whitaker asserts, isn’t about creating order. Instead, "it’s about learning to love the madness of governing before you can master it."
In another article in today’s Post, Robert Samuelson reflects on his 40 years in journalism and how much it has changed during his career. Today, he says, "journalism is a jumble. … ‘The marketplace of ideas’ often resembles a demolition derby—victory goes to the most aggressive."
He has the same thought about our society: "Democracy is a messy, often shortsighted, unreasoned and selfish process. People have interests, beliefs and prejudices that, once firmly entrenched, are not easily dislodged—and certainly not by logic or evidence." Further, "good information does not inexorably lead to good government." Samuelson quotes Henry Rosovsky on this point: "Never underestimate the difficulty of changing false beliefs by facts." Although "people do change their minds," Samuelson contends that "experience has more influence than argument."
So go ahead—set some goals. Trying hard is important and good for the character. We can all do better. I know I sure can. But don’t forget to love the madness of our world and embrace the complexity!
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In this holiday season we tend to focus on the role of individual contributions to charities. This is an important subject since many nonprofit organizations receive the bulk of their giving during the last few months of the year. But many nonprofits receive the majority of their funds not from individual donations but from service fees and contracts, particularly those in vitally-needed health and social service agencies. Sunday’s New York Times reported on the mounting debts of states, nearing several trillion dollars, and predicting a crisis point where “it could overwhelm them in the next few years.”
