Wednesday, March 12, 2014
Profits, Nonprofits, and the Church
Honestly, I'd not really anticipated much, what with my Religious Studies undergraduate degree. I'd pursued what interested me, and taken the coursework that I found fascinating. Having graduated and looking at at my prospects, I became convinced that this would lead to a lucrative career either driving a forklift or in a dishroom. I had experience in both warehouses and dishrooms, right there on my resume next to the degree, so I figured one of the two was a shoo-in.
I knew how to work, and was willing to learn, so after a few fits and starts, I found myself with a job in an office. I became a fetch-and-carry intern, sorting and filing and--here there's a sign of how old I am--faxing. I chugged around, learning things, like how to operate and program the database my employer used.
One thing led to another, and after a while, my immediate supervisor--the only other person who knew how to operate the database--left. Lo and behold, I had a real job.
It was at that point that I began paying more attention to the big picture of what I was doing. My workplace was a bit peculiar. The Aspen Institute was and is a very unique organization. Founded in the fifties, it was created with the idea that maybe it might help society if leaders--in business, government, and the nonprofit sector--took a few moments to place their lives into the context of classical philosophy.
Socratic method, togas, and Sophocles? That seemed to take, and so the organization grew, adding on programs designed to help leadership in varying different fields get a hold on what really matters in their field. I was working for a program called the Nonprofit Sector Research Fund, which gave grants to support research into the "how" and "why" of nonprofit organizations.
It was a heady place, a "big-ideas" sort of place, the kind of job that finds you sitting at a bar drinking beers after work with a member of the British aristocracy and one of the founders of ACORN, as they gossiped about Dennis and Margaret Thatcher's relationship.
It was not quite the dishroom I had anticipated.
And the more I worked there, and engaged, the more engaged I became in the ideas I encountered. Why do we engage in charity and selfless, mission-driven behavior? What should voluntary endeavor look like? How does that relate to government and to business? These questions were bubbling around in our society, and we had no real sense of the answers.
That's not quite true. The "answer," as it was being pitched out there in our profit-driven culture, was that nonprofits should look like businesses. As it was, they were slow. They were clumsy. They were inefficient. To be more effective, they needed to embrace the values of entrepreneurial endeavor. They needed to structure themselves like businesses, and act like businesses, and run themselves like businesses.
Leaders of nonprofit organizations needed to look to the C-suites of business for their inspiration. And charities that were doing work that businesses could handle more efficiently should just step aside and let the market do its job.
This was the early 1990s, and the big push was the transition from nonprofit hospitals to for-profit hospitals. Businesses were buying up charitable health care providers right and left, and while there was some concern that maybe this might be a bad thing, those concerns were dismissed. Nonprofits were clumsy and inefficient, after all. Once profit-seeking and market competition was introduced into the health-care sector, or so the argument went, the inherent efficiencies of the marketplace would drive down costs for health-care consumers. Just let the market do its job, and we will all benefit from the...
Yuh huh. Sure.
As economist Milton Friedman famously put it, the goal of every business endeavor is to maximize profit. Period. And if you're selling a product that people must buy or die, and aren't in a position to critically assess, there's just not a chance in hell prices are going to go down. You haven't researched your provider options while you're in the back of the ambulance as they're trying to revive you? Gosh, you need to be a savvier consumer.
It's been twenty years. We know how that worked out now. The price for hospital care has soared, with absurd markups and outrageous charges added on to bills that drive tens of thousands of families into bankruptcy while a few huge companies do really remarkably well.
Then there was executive pay. To get good leadership, you had to pay for it. If you expected an organization to fulfill its mission, you needed a motivated and committed executive. That means salary. So said the nonprofit bigwigs, and the CEOs of businesses who sat on their boards. A significant proponent of this back in the late 1980s and early 1990s was William Aramony, the head of the United Way. Aramony had made a bunch of changes to the United Way, but his biggest ideas were drawn from the world of big business.
For example, to drive the United Way to be more businesslike, responsive, and consumer-oriented, he pushed it to allow you to specifically allocate what charity you wanted your money to go to. Donor choice, they called it. It empowered the charitable consumer! What a good thing!
Of course, the entire purpose of the United Way was twofold. First, to free nonprofits from having to chase after donor dollars and to focus all their energies on doing good. Second, to free human beings from the endless dunning calls and letters from charities hitting us up for cash. Really. That's why it was created. It wasn't just about the convenience of payroll donation. Eliminating the waste and annoyance of endless charitable money-seeking was its mission, its whole reason for existence.
Twenty years after Aramony, nonprofits are still forced to advertise to get United Way dollars.
Aramony was also a jet-setter, who lived the lifestyle of a corporate executive. His self-justification was simple. If nonprofits are to be run like businesses, their executives should live like the leaders they are. He schmoozed and wined and dined with the powerful and the wealthy. He was an amazing fundraiser, and brought in a half-million dollar salary as recompense for his abilities...which back then, was considered a huge chunk of change for a nonprofit leader. Not so much any more.
He also, as it turned out, "borrowed" millions from the United Way to finance his C-suite lifestyle, which included a teenage mistress. Self-interest, as a value, does tend to do that sort of thing. That ended in seven years in prison for embezzlement, but as badly as that turned out, the ethic that made Aramony possible lived on.
In the ten years I worked for the Institute, I had a chance to delve deep into the history and reality of charitable and voluntary action. I read and met the best and most insightful voices in the nonprofit field. During those years, what continually and repeatedly struck me was that the fundamental value of nonprofit organizations is not the same as the ethos that drives business. The ethic and that guides and shapes the existence of a nonprofit is their mission.
Oh, sure, you need to be focused and realistic. You don't want to blunder around helplessly, with no plan, no measures of success, and only empty, unrealistic fantasies to guide you. But what drives a nonprofit organization is a radical commitment to its mission. Period. A nonprofit organization succeeds when its volunteers and staff have a driving passion to get 'er done.
That value is not the same as profit maximization, nor is it the same value as material self-interest or organizational survival.
The more I studied and the more I steeped myself in the best research being done on nonprofit organizations, the more convinced I became that extending the values of the marketplace too deeply into nonprofit organizations diluted their commitment to mission.
It was an absolutely fascinating and growing field of study, and as the years went by and I picked up more and more by osmosis, I found myself often thinking I might want to get into it myself.
But God had other plans, which is why I'm now a pastor. And in the church, in that sacred community where our holy and untainted mission is to follow Jesus and seek to love our neighbor, the yearning for profit and self-interest has no place.
Uh huh. Sure.