Nonprofit World Must Work Together

To the Editor:

The last few months have been marked by attacks on the philanthropic and charitable sector, both from outside antagonists and from within the field itself.

More so than at any other time over the past 10 years, fear, confusion, and uncertainty are paralyzing the sector. Of course, many of these fears are real. Nonprofits and foundations are laying off staff. Endowments are dropping precipitously. Grants are drying up. More importantly, government cuts affect people — and those in greatest need of support are hit first and hardest. But rather than address these needs in a measured way, we have had a season of distraction filled with a series of reports and revelations that range from shocking disclosures of excessive compensation for executives (“Irvine Foundation’s Downturn” The Mercury News) to disheartening facts (“Some Foundations Spend Lavishly on Own Board Members,” Baltimore Sun) to disquieting opinions (“The Nonprofit Sector’s $100-Billion Opportunity,” Harvard Business Review).

Distractions draw attention from problems that can and should be addressed. Worse yet, they waste precious energy. Rather than continue our internecine bickering and hand-wringing, it’s time to end the distractions and refocus on the true work at hand. In these difficult times, there are two fundamental ways that we can work differently to make collective progress to strengthen and support individuals and communities in need.

The first way is not to lose sight of the fact that grant makers and nonprofits are inextricably linked and mutually dependent. Like siblings that know one another too well, we are too often disdainful of one another; we see only flaws and shortcomings. When foundations become averse to taking risks, the chances for nonprofits to be innovative are greatly reduced. When nonprofits fail to understand and appreciate the real constraints under which grant makers operate, it necessarily causes funders to pull back, further distancing them from the field. In light of current economic and political realities, it is more important than ever to reaffirm our respect for the unique skills and resources each of us brings to the sector, and to remind ourselves that we share common goals and dreams of making the world a better place.

Secondly, we need to stop making ourselves such easy targets for criticism (or worse, regulation) from outsiders. It’s nearly impossible to imagine a scenario wherein nonprofits would prescribe ways for the for-profit sector to “fix” itself, yet nonprofits appear to draw a disproportionate burden of proof. This disturbing trend can be best countered by consistently demonstrating the real difference our work is making. Anything is measurable if you know what you’re looking for; articulating and measuring results is the best means of capturing the impact of our efforts over both the short and the long term. Rather than letting ourselves be defined by for-profit consultants and politicians, we should take this opportunity to define who we are, define what success means to us, and focus on the substantive results we’re achieving every day.

As an example, over the past 10 years, women’s philanthropy has emerged as a powerful force in the sector. Last year, the Women’s Funding Network received a significant grant from the W.K. Kellogg Foundation to support its member foundations’ grantees working with women and girls adversely affected by September 11. By engaging in a careful evaluation process, the network learned that grants given through the women and girls’ networks nurtured connections with organizations outside of the mainstream, leveraged funds, and led to strong collaborative relationships with other local service providers and advocates. Measuring results in this case affirmed the Women’s Funding Network’s long-held belief in the unique effect that women’s philanthropy and nonprofits, working together to tackle the needs of underserved women and girls, can have on their communities.

The question is no longer how we measure these outcomes, but when. We need to more deliberately create an expectation and demand among ourselves for measuring and improving our own results on a regular basis. Our work would be many times easier if all we had to measure were profits. Unfortunately — or perhaps fortunately, depending on your point of view — we measure success by measuring the real difference that we make in people’s lives. We are in the business of helping girls be more enthusiastic about math and science, finding homes for formerly homeless families, and providing companionship for shut-ins. For those foundations and nonprofits that are ready to walk the walk, measuring results individually and sharing these results with sister agencies in order to help shape funding and policy decisions is the best, most constructive step towards improved accountability, autonomy, and staying power.

The choice is ours. We can continue squabbling among ourselves, and allow others to prescribe what they think is best for us, weakening each other — and the sector — in the process. Or we can define the issues, frame the debate ourselves, and work collectively and with renewed vigor to establish what’s truly important to our field, our organizations, and the people and communities we serve.

Allison Fine
Executive Director
Innovation Network
Washington

To the Editor:

The nonprofit-management literature emanating from the business world includes much useful data and analysis. Unfortunately, its effectiveness is too often diminished by its arrogant and patronizing tone.

Much of the venture-philanthropy movement wisely has moved beyond its early arrogance to achieve a more productive, mutually respectful partnership with nonprofits. However, an unwarranted tone of superiority continues to characterize the writings of some nonprofit “experts” coming from the business side, exemplified in multiple recent articles associated with McKinsey & Company.

The nonprofit sector’s generally negative reaction to the Harvard Business Review article by McKinsey’s Bill Bradley, Paul Jansen, and Les Silverman (“A $100-Billion Debate Erupts,” May 29) reflected not only real weaknesses in the authors’ logic, but also, I suspect, nonprofit leaders’ accumulated frustration at the continuous drumbeat of gratuitous and implicitly insulting advice coming their way.

In their response to nonprofit reactions to their original article (“McKinsey’s $100-Billion Prediction Strikes a Nerve,” Letters to the Editor, June 12), the McKinsey authors reinforced their arrogant tone. Rather than taking a conciliatory approach to nonprofits’ outrage, the authors essentially say, “We were right and we gotcha where it hurts.”

Another recent McKinsey-related article, “Teach for America Learned the Importance of Capacity the Hard Way,” by Jerry Hauser, a McKinsey alumnus and now COO of Teach for America, provides a useful case study of capacity building.

Unfortunately, in the abstract of the article on its Web site, McKinsey explains that “while nonprofit leaders zealously build programs and raise money, they often neglect the organizational structures and management processes that help institutions endure.” Often? Neglect? Like “always” and “never,” these are unsupported and loaded words that belie an attitude and invite a fight.

Neglect of capacity building may be a problem at some nonprofits. Others, including a number that I have served as an executive, consultant, and board member, are keenly focused on capacity building, to the extent that resources permit them to be so. And if endurance is the measure of management effectiveness, then the past few years surely have provided examples of “neglect” by the leaders of for-profit corporations. Indeed, no company I know has so far matched Harvard’s 366-year run!

In fact, there are examples of effective and ineffective management in both the nonprofit and business sectors.

Managers on both sides need to share their expertise without the implication that one side has a monopoly on brilliance, which it does not. Some business methods are transferable to nonprofit organizations, some are not, and some companies could learn a lot from nonprofits about building a committed work force, serving customers, reducing costs, and maintaining the integrity of governance, among other goals. There are numerous conferences and workshops designed to teach nonprofit managers business skills. Maybe we’re overdue for a conference on “applying nonprofit management techniques to for-profit firms.” The fact that none, to my knowledge, has yet occurred illustrates the imbalance in the current dialogue.

Both sectors could benefit from a mutually respectful conversation. Initiating one will require an end to arrogance, both in tone and attitude, from some in the business world who profess themselves “here to help.”

Michael J. Worth
Professor of Nonprofit Management
George Washington University
Washington