October 2008 Archives
By Aaron Hurst on
October 30, 2008 6:23 AM
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The supply and demand for pro bono services is inversely correlated to the strength of the economy. With the fall of the market, we see a sharp increase in:
- people in need of services from nonprofits
- nonprofits in need of professional services to help sustain their revenues and identify ways to increase efficiencies
AND
- talented business professionals raising their hands to donate their skills
Since September, we have seen a bump in the demand for our Service Grant program and an equally large (if not larger) increase in interest from business professionals seeking to serve.
We often see the greatest examples of civic engagement during tough times. The silver lining amid all the suffering is that these times cause us to reflect and put our lives in to perspective. We see how close we are to having our reality collapse and suddenly have compassion for those we had beforehand only read about in the paper--those who once seemed so foreign.
It is in these times that the government, corporations and philanthropic leaders must create vehicles for the newly compassionate to convert their intention into action. Some individuals will only engage in a short window of service, which will end when the headlines change. For many more professionals, it will be the start of a life-long commitment to service, their community and to society as a whole.
America needs to engage these citizen professionals. They are the next social entrepreneurs, politicians and community leaders. They will be our children's role models.
By Aaron Hurst on
October 24, 2008 12:57 PM
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As the stock market tumbles, conversation about the need for nonprofit mergers and acquisitions grows. Why can't nonprofits merge like companies do all the time? This month's headlines are dominated by stories of Wall Street mergers. Why doesn't it happen in the nonprofit sector?
While I don't have the data, I suspect that more mergers happen in the nonprofit sector than in the business community. Mergers of huge companies make headlines regularly, and it fuels a belief that mergers are rampant in the corporate world.
However, comparing a homeless shelter to Wachovia is off the mark. A homeless shelter is more like a local restaurant or a car wash in scale. When was the last time you saw two car washes merge?
With small businesses, the reality is that rather than merge they usually fail and go out of business. Later, another entrepreneur comes along, rents the space and tries again.
While we can all emotionally stomach a local restaurant closing, we find it criminal when a nonprofit closes its doors. Community members can accept having one less restaurant where they are able to enjoy a glass of wine, but for those seeking services from a local nonprofit, there may not be another option to replace the closed organization.
That is unless we can fund the next closest shelter to double their capacity to serve (and that would have to be done at a lower cost than creating a new nonprofit to replace the one that closed). There is still a cost here in human suffering as the remaining shelter will not have the capacity to meet all the new demand over night. It could be months or years before that happens.
So, we are back where we started. Why can't the stronger shelter acquire the other one as it falters and is on the brink of collapse? More often than not it does just that and assumes the remaining funding, staff, facilities and clients of the other organization.
This is precisely why I suspect there is more 'm and a' activity in the nonprofit sector than in small business.
Community Awareness and Treatment Services in San Francisco is a great example. Over the last few decades they have acquired the critical programs of failing nonprofits left and right. They are now holding companies for tons of critical services.
What have you witnessed? Is this aligned with your experiences?
By Aaron Hurst on
October 23, 2008 8:05 AM
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One of our star volunteers forwarded us a great Op-Ed from
USA Today titled
"Where are the Patriots?". It tells of past heroism during national crises, which came in the form of pro bono work performed by professionals. It correctly points out that this sort of heroism is missing this time around while companies are lining up to make a profit from our collective pain, rather than serving society.
By Aaron Hurst on
October 20, 2008 3:30 PM
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I bought a copy of
The Science of Fear at the MIT student book store recently. The basic premise is that we have both healthy and unhealthy relationships with our fear.
For example, after 9/11 people were scared to fly, and, consequently, there was a spike in driving. That spike created more casualties than any caused by flying or terrorism. In this case, fear changed behavior, which in turn created more deaths than the original source of the fear.
Despite this evidence, politicians and the media still sell this fear to get votes and viewership. Fear is effective at achieving these ends--even at a cost to the broader society.
This is nothing new. Michael Moore made an entire movie on the topic.
I also recently read about the happiness index and the related work at Stanford, which showed that after earning $40k, money is no longer a driver of happiness for individuals. In a rare case of positive media coverage, this finding was mentioned in the news to put the drop in the DOW in perspective.
Combined, these two pieces got me thinking about the metrics we should track as a society. Happiness and death rates (and associated causes) seem to top the list. GDP and household income seem pretty irrelevant unless you are looking to diagnose causes of death or unhappiness. For example, tracking the percentage of households with under $40k in income is only significant because they may be subject to money-related unhappiness.
What would you include in a society dashboard?
By Aaron Hurst on
October 13, 2008 1:09 PM
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I recently picked up a copy of
Crowdsourcing, the new book by Jeff Howe, and read it on my flight home from Chicago O'Hare.
According to
Wikipedia, "Crowdsourcing is a neologism for the act of taking a task traditionally performed by an employee or contractor, and outsourcing it to an undefined, generally large group of people, in the form of an open call." This is a pretty good definition.
The book focuses on some of my favorite sites like
Threadless and
InnoCentive. The latter was used in a discussion of how to use crowdsourcing to address social and environmental issues. InnoCentive has partnered with foundations to create cash prizes for the crowd in order to find solutions to diseases and other huge social and health challenges.
This is very cool, but it raises two questions:
1) Do you need economic incentives to have people seek solutions to collective societal issues?
2) How do we use this model to address smaller but critical issues facing nonprofits in various issue areas? Good social science problem solving could greatly improve existing programs.
By Aaron Hurst on
October 8, 2008 11:44 AM
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There is a fancy term in MBA-speak called the
"present value" of money. It basically means that a penny today is worth more than a penny ten years from now.
The same principle applies to social change. Service done today to help an individual, a community or the environment is exponentially more valuable than service ten years from now.
You can help a foster youth today, and they can become a productive, happy and tax generating member of society. If we wait ten years to help them they will likely already be in jail or living on the street. The odds of turning their life around will be considerably smaller.
You can help curb climate change today, and you might actually make a difference. Ten years from now it will probably be too late.
The theory of the present value of service runs contrary to the prevailing philosophy in Corporate America. Service and philanthropy are said to be things you do later in your career and in retirement (when you have more money, time and experience). While you may have greater assets in all of these areas later in life, the theory of the present value of service greatly discounts the value of those assets relative to more modest but timely assets today.
The next time someone tells you they plan to give back later in their career, share the theory of the present value of service. Encourage them not to wait another day.
By Aaron Hurst on
October 1, 2008 10:55 AM
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"If only nonprofits were run like corporations" is a common refrain among nonprofit and business professionals alike. Nonprofit leaders project a romanticized vision of corporations. Business professionals spend their nights complaining to their significant others about office dysfunction, but they have amnesia when they enter a nonprofit board room. Suddenly, they only remember what works at the office.
I was reminded of this projection issue when I opened a new bank account at a local bank in my new neighborhood. One week after relocating to Park Slope from San Francisco, I visited the local branch of a national bank. In the course of six weeks they made the following errors:
- Made a typo on one of my checks
- Forgot to complete the forms needed to send an ATM card to my wife
- Withdrew $750 cash out of the Taproot Foundation business account instead of my personal account (the Taproot Foundation once used the same bank)
- Entered a withdraw to open a CD twice, leaving us with a bogus six figure overdraft that froze our account
- Charged us an overdraft fee for their error and demanded that I call back at another time if I wanted the money refunded
If the bank was a nonprofit, I might have thought: This is so typical! If only this organization ran more like a company...
