ndmclain-blog

[ndmclain-blog]

Beware the second Gilded Age

Continuing on the theme of philanthropy, our professor showed an image from the Gilded Age, when philanthropists were viewed with a great deal of skepticism - even scorn. That contrasted with an image of Bill and Melinda Gates (and Bono) as Time Magazine’s Persons of the Year. Like in most things, I think the proper treatment is somewhere in between.

In the article I posted in my other entry this week, the author spoke about how the Gates Foundation gave a substantial grant to the American Legislative Exchange Council, or ALEC, the brainchild behind bills for causes such as ‘stand your ground’, stricter immigration, prison privatization, energy industry deregulation (and the resulting climate change ramifications), and also ag-gag bills, which makes it illegal for anyone to film/tape/photograph the conditions of factory farms.

If you’ve seen documentaries like “Death on a Factory Farm,” “Food, Inc.,” or many others, you know what they’re trying to hide: factory farming exposés have revealed animals so packed in that they stand in place, unable even to turn around; body alterations without anesthesia; cows, pigs, and chickens housed in sheds with no windows and never breath fresh air or see the sun; and many more things to awful to talk about.

I think most of what the Gates Foundation does is laudable. Certainly, initiatives like battling malaria and other tropical diseases in third-world countries is something no one can disagree with. And to be fair, the Gates Foundation stopped funding ALEC after it became public, but my point here stands: there is likely to be something that philanthropists fund (especially the mega-rich) that you’ll disagree with. Beyond the ALEC funding, there is plenty I disagree with Gates on, particularly in some of their education initiatives and the assumptions they make about “underperforming” teachers.

But as we talked about in class, even if you disagree with the initiatives by the Gates Foundation, or foundations run by the Koch Brothers or others, your voice doesn’t matter. These are not accountable figures. By diverting the money away from (rightfully) paying taxes, they maintain control and power and can push their views, many of which people disagree with and which aren’t supported by evidence.

My favorite quote this week was from Teddy Roosevelt, who, when asked about charitable endeavors by people like Rockefelleer, said, “No amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them.”

This brings me back to the article I included with this entry, and which are readings touch on, as well. Many of the ultra-rich made their money in shady ways. I’m not saying that they were killing puppies or anything. But most of them made considerable sums off the backs of underpaid and abused labor.

Let’s use Gates as an example. Microsoft, either itself or its suppliers, has been accused of using child labor (and paying them 65 cents per house in 16.5-hour days) and of awful workplace conditions and exceptionally low pay.

And if you try to unionize to improve things? Yeah, good luck with that.

And as I said, Gates and Microsoft are certainly not alone in this (look up Apple or Wal-Mart overseas work conditions, as just another couple examples). We’ve talked in class a bit about the mega-rich donating as a way to settle a guilty conscience. And to be sure, some have plenty to be guilty about. I agree with the author of this piece; rather than donating on the backend, how about they actually pay workers (both in America and overseas) a living wage? How about letting them work in conditions that aren’t substandard and dangerous?

Sure, their profit margin won’t be as high, but they can sleep easier at night. People in both America and around the world would have a better quality of life and maybe even the ability to boost the economy by spending their money on items beyond the mere necessities (like they do now).

The cartoon in class showing the philanthropists in a bad light came from the Gilded Age. In that time, inequality was higher in America than it has ever been. And it’s understandable - citizens who can’t even pay their bills, feed themselves, or have proper shelter aren’t going to be so quick to lionize philanthropists for giving millions to a museum.

There’s plenty of evidence that inequality in America is approaching levels similar to the Gilded Age. Perhaps philanthropists would be wise to conduct business in a different way, or risk losing their exalted places in our society.

[ndmclain-blog]

It’s time for foundation reform

We spoke at length this week in class about philanthropic endeavors (namely, foundations) and whether it can co-exist in a democratic country. This article, while not new, echoes a lot of the sentiments in our readings from Reich, Ramdas, and others. Needless to say, I agree with them.

Enabling the super-rich to stash as much of their money away as they want, tax free, is essentially like a state-authorized offshore account. The restrictions, such as they are, are few. They have to spend five percent minimum a year. However, even that has a caveat: as this article states, that five percent can include administrative salaries, trustee fees, travel, receptions, office supplies, equipment, rent, and new headquarters.

I agree with the author in that a free, democratic society should allow anyone to spend their money as they wish. But the tax deduction goes too far. As Reich says in our readings this week, “tax incentives for philanthropic activities date back only to 1917.” Before that, they have to pay taxes on their wealth - then, at that point, it could be used for whatever purpose they wished.

We already give the wealthy plenty of substantial tax breaks. In 2011, this was brought into the light by Warren Buffett, who famously said he paid a lower tax rate than his secretary. This is done in a variety of ways - captain gains, retirement savings accounts, the mortgage interest deduction on large houses and second homes, the estate tax, the list goes on and on.

This doesn’t even include tax incentives and giveaways by states and municipalities for many of the wealthy people’s businesses. When I go into a Colts game, I’m going into a $720 million stadium, paid for by me and fellow state and city taxpayers. Only $100 million of that was paid for by the owner, Jim Irsay, who has an estimated worth of $2.7 billion. I’m starting to see the genesis of the adage, “socialism for the rich, capitalism for the poor.”

In previous posts, I covered the Paradise Papers, where many prominent billionaires and mega-corporations hid money in offshore accounts, with estimates of $10 trillion or more. Cynically, this makes me think that even if we get rid of the philanthropic tax incentive, they’ll just stash more money overseas. But that’s not a good reason not to do it. We should eliminate the philanthropic tax incentive. If they want to give, they should - after they pay their share of taxes. It’s been said by some that paying taxes is patriotic, and it is.

I understand the attitude toward government. Fortunately, for those who discount government (including many who are wealthy), being able to shelter their wealth from government taxes actually helps “prove” their point - by starving the beast of tax revenue, the government has to shed services and is generally less effective.

I also get the idea of government as just a partisan gridlock, that nothing gets done. Not for nothing, but I think this also could be solved by getting money out of politics/government as much as possible. It won’t eliminate all our problems - nothing could - but it’d be a big start in the right direction.

The author of this piece also talks about the fact that most foundations are smaller in assets and likely need the tax-exempt status. Fair enough. I think a good start would be getting rid of the tax-exempt status for foundations of a certain asset size - for example, $250 million? $100 million?

Also, foundations need to be transparent. They should have to disclose more financially then they currently need to. Yes, this would require more oversight from the government, but with the additional revenue from the wealthy actually paying the correct share of taxes, the money would be there.

The author has some ideas toward the end of the article, and they seem common sense to me. Philanthropy is good, and the vast majority of philanthropists, I’m guessing, are just people who want to do good. But it’s also fair to say that some are just using this as a way to keep control and power.

[ndmclain-blog]

A free press is more important than ever

Before I began embarking on a career in government relations (and my masters degree program), I was a journalist. I wasn’t exactly covering Watergate — it was mostly small newspapers, as well as Angie’s List Magazine — but I gained tremendous respect for the profession. It’s a lot of work, and usually for very poor compensation (the main reason I had to leave the field). In addition, it’s usually thankless work, and these days, one that puts you squarely in the crosshairs.

The media, as a group, has a major perception problem. Polls show that 65 percent of voters believe there is a “lot of fake news” in the mainstream media.  The amount of people who trust media continues to decline, with only 32 percent reporting a great deal or fair amount of trust in them in a Gallup poll in September 2016.

President Trump exploited this to great effect during the campaign, calling media who seriously questioned him “fake news.” As a person who reads a lot of history, it brought to mind the Nazi dismissal of the press as “lügenpresse,” or “lying press.” While I know this brings me squarely into the realm of Godwin’s law, it was an impossible comparison not to make.

At this point, I should probably stipulate that the media, like any major institution, is not above criticism. It makes mistakes all the time. As media has come under the thumb of major corporations, the need to satisfy shareholders with impressive earnings led to massive layoffs of older, established journalists who had years of experience and many contacts in their belt but were more expensive. Either the journalists were not replaced at all, leaving the surviving staff spread too thin, or the replacements were young journalists, just out of school, having to learn on the fly.

In addition, deep muckraking investigative pieces are often axed as too time-consuming and expensive by the corporate masters. And as history has shown, these are the kinds of stories that lead to real breakthroughs.

In today’s frantic, 24-hour news cycle, there is also increased emphasis on journalists to be “first” in getting a story out. I even dealt with this in my time as a journalist, which made me chuckle because I doubted the citizens of Zionsville were that anxious to find out about the recent decision at the Board of Zoning Appeal meeting that night. The emphasis should not be on who is first; rather, it should be about who gets it right. Rushing stories to press is a recipe for disaster. Instead, multiple sources should be consulted to verify and re-verify everything.

There is also the criticism of media as liberal. I often see this as a means to discount everything the media is covering if a story’s “target” is conservative/Republican. I am left-leaning, and I’d have to say that most of the journalists I worked with were probably left of center. That being said, we all strove to be as unbiased in our coverage as we could be. In some cases, we even overcompensated and gave Democrats/liberals more scrutiny. But in truth, I looked at myself as apart from politics when I covered things. If you were corrupt, it didn’t matter to me if you were Democrat or Republican — you were betraying the public trust and I was going to make sure people knew about it. I think the majority of media members felt as I do.

People also criticize some of the frivolous things that media chooses to cover. I share this frustration, as I don’t care about the Kardashians when so many bigger things need to be shown to the public. However, this goes back to media ownership by big corporations. In the search for advertisers, these corporations care about ratings, about page views. And if the people tend to click on articles about the Kardashians, or keep it on the channel when such topics are being discussed, then the media will be told to continue to cover it. It’s all about money, folks. Media is no different than the rest of society — the shareholders’ happiness is all that matters.

Rounding back to “fake news” — I am distressed by the growing belief in fake news because I find it so patently untrue, at least from the mainstream media. We have a pretty free press in this country, and we should be celebrating and supporting that.

If you want to see examples of truly ‘fake news,’ read this article that discusses the findings of Freedom House (we talked about this organization in class as it pertained to their country freedom ratings). While Russia spread fake news in mediums like Facebook in the U.S., not only is that happening in other countries, it’s often the government itself behind it. Citizens of countries like Ukraine, Egypt, Turkey, the Philippines, and many others can’t find the truth from any source, and many governments have sought to crack down on the Internet to prevent that from ever changing.

After the election, despite a difficult financial situation, I donated to a couple media advocacy organizations and got new subscriptions to The New York Times and a couple other publications I hold in high regard. I evidently wasn’t the only one.

The media must be held to account just like any other major American industry. But even as it sometimes frustrates, we need to support a free press and good journalism. The cost of not doing so is to lose access to any semblance of truth itself.

[ndmclain-blog]

Preserving the safety of NGO workers

In a class discussion this week, we talked about NGOs and whether it is possible for them to be truly neutral in any conflict in which they provide relief. Although I didn’t speak up, my thought during the entire discussion is that it’s imperative to be neutral, or at least be perceived to be by all sides, so as to keep your workers as safe as humanly possible.

I came across this article, which covers several topics, but two of note. The first concerns the situation in the Democratic Republic of the Congo. We covered a lot of international topics this week, and it served as a reminder that I do not follow enough of the issues going on around the globe. This is especially true of issues in Africa, which the media often fails to cover adequately. This article mentions that the Kivu Conflict in Congo has lifted it to a Level 3 emergency by the international relief community, joining Iraq, Syria and Yemen.

Congo is the 17th largest country in the world, but coverage of the issues there, either from fatigue or others, is often lacking. As you dig into it, the numbers from the conflict are startling. Estimates show as many as 45,000 people dying in the Congo each month, not just from conflict, but also disease and famine. In a particularly disturbing statistic, there have been more than 400,000 women raped in the Congo each year.

It’s very sad to read. This country has suffered for a long time, going back to the 1870s and the horrible and brutal treatment by the Belgians and King Leopold II (if you’re interested in reading more about this topic, the book “King Leopold’s Ghost” by Adam Hochschild is fantastic. The country’s longstanding suffering might make it easy for humanitarian organizations to become jaded by efforts there, but they must keep at it.

The second part of the article was a summary of a study conducted by the International NGO Safety Organisation, who asked the groups involved in the Congo conflict about their perception of NGO workers. While they had a desire to comply with international humanitarian law and mostly felt OK with aid workers, they also had concerns. These revolved around what they considered NGO incompetence and corruption. They also felt that the NGOs failed to consult with local citizens and thus led to bad implementation of relief efforts.

The study ultimately recommended keeping an open dialogue with the armed groups and avoiding getting too close with any one side so to avoid the appearance of favoritism. These seem like reasonable ideas and will hopefully lead to better relations with all sides and greater safety for the NGO workers.

[ndmclain-blog]

The race to become the most well-endowed

At the risk of becoming the class bore who only harps on one topic, I return to the Paradise Papers and an interesting article in The New York Times about the creative accounting/investment measures that some universities take to grow its endowments through private equity and hedge fund investments.

In some cases, the universities use these loopholes, called blocker corporations, to obscure from the public potentially controversial investments. The article cites one such example right at the top, a partnership between Indiana University and Texas Christian University in oil, gas, and coal investments.

These blocker corporations, created in tax havens like the Cayman Islands, allow tax-exempt entities like IU from the taxes they’d usually be subject to by engaging in these investments.

The article poses questions that have troubled me for some time, especially after listening to Malcom Gladwell cover the topic of excessive endowments on his Revisionist History podcast last year. How, in an era when tuition rates are going into the stratosphere, leaving students with loans that will hamper them for life, can universities justify such excessive endowments?

These shady accounting strategies will only heighten the scrutiny, and I say: bring it on. Perhaps legislation is needed to keep universities, especially public colleges, to keep a cap on how much endowment money can be kept. Indian University, according to what I’ve seen, has an endowment of almost $2 billion. And that makes them small potatoes actually - 43rd on a list I saw. Harvard is first at an astonishing $34 billion; the University of Texas appears to be the largest among public universities at $24 billion.

If endowments have to used (when they are used at all) to help retain talented teachers and researchers or build state-of-the-art facilities, can they at least freeze tuition in the process? This seems like a case of “Keeping Up with the Joneses” that has reached Cold-War-nuclear-arms-race levels of ridiculousness.

[ndmclain-blog]

Please, international oligarchy - may I have some more?

This week, in an well-timed (or ill-timed, depending on your perspective) reveal, several million confidential electronic documents were released into the public domain. The documents came from an offshore law firm, Appleby, as well as ‘corporate services providers and other business entities. The documents reveal approximately $10 trillion being funneled to tax havens, also called “tax paradises.”

The so-called Paradise Papers show thousands of wealthy individuals and corporations taking advantage of these paradises. Whether intentionally or not, this news coincided with the debate going on in the United States about the tax reform bill being discussed in Congress. The bill would cut the corporate tax rate from 35 percent to 20 percent. In addition, other analyses of the bill said that the wealthy will generate almost half of the benefits from it.

The idea here of course is that corporations will be more likely to create jobs here and that the wealthy will invest their money and spur the economy. However, in light of the Paradise Papers leak, why are we doing them any favors? Major corporations like Facebook, Apple, Uber, Nike, Walmart, McDonalds and others were included in the list. Trump Administration officials, including Commerce Secretary Wilbur Ross and Secretary of State Rex Tillerson, populate the list.

If they can’t play by the rules, why are we bending over backwards (or forward, depending on your perspective) for them? Bernie Sanders, in a statement after the release of the Paradise Papers, said the world was becoming an “international oligarchy” controlled by billionaires and considered it the “major issue of our time.”

While Bernie may be prone to hyperbole, he’s not far off. This is a significant issue. In John Oliver’s segment this week on “Last Week Tonight,” he discussed the incentives that states and cities give to corporations to get them to locate in their area. More often than not, the supposed touted benefits to the community never come.

In previous posts, I lauded the billionaires who are allocating lots of money to causes important to them. However, I’m starting to wonder if they’re just papering over their indiscretions with the occasional philanthropic endeavor.

In another story I took note of this week, Joe Ricketts, the billionaire whose family owns the Chicago Cubs, recently shut down two online news sites, Gothamist and DNAinfo, after their employees voted to unionize. While not surprised, it was dispiriting.

We have, alas, become a world of corporate fetishists. Although the economics behind it have long been exposed as baloney, we’re back to trickle-down economics. States and towns beg Amazon to place their headquarters in their area; employees beg their employer to try to have reasonable pay and benefits. Philanthropy is a good thing, but I’m concerned if it’ll just become another form of begging.

Unless you’re a billionaire or a big corporation, in 2017, you’re Oliver Twist.

[ndmclain-blog]

Wealthier favor ‘individualistic’ donation causes

In light of this week’s reading, I thought this was an interesting study/article. To get down to brass tacks, the study showed that people with less money were more likely to donate to something when the request was emphasized with ideas of social connection and community. Conversely, wealthier people were more likely to give when they felt that request appealed to their sense of independence and self-reliance.

While this is interesting, it doesn’t seem surprising, at least to me. Anecdotally, I sometimes see an attitude from wealthier people that is sort of being special and set apart. Whereas, those who have less money may think in terms more communal. The article touches on this:

“Past research has shown that people with higher incomes tend to have a greater sense of personal control. Money allows people to meet their personal goals without needing to rely so much on others, and this may affect how they see themselves. Research also shows that people with lower incomes tend to see themselves as more connected to others, maybe because they need to rely more [on] other people in their everyday lives.”

The study says that more research would be needed to see if tailoring the message to the wealth of the person being solicited is a viable strategy. But it makes sense to me. Even in our readings, giving money was seen as just part and parcel of being wealthy in ancient Greece and Rome. But there was no question that they were set apart, as the masses were the recipients.

I don’t know if the study necessarily means that appeals to ego are more important to get wealthier people to donate, but it seems like that may be the case.

[ndmclain-blog]

Altruism at the cellular level

I found this article to be incredibly interesting. The readings this week address altruism in several places, most of all in Alan Wolfe. Although I’m obviously not well-versed in the study of altruism, I have to admit that I was very skeptical by the idea of altruism being innate in us.

I tend to think that more likely, we’re somewhat blank slates, or tabula rasas, as mentioned in the readings, and that the people who raise us, the environments we’re exposed to, help form who we are. For the purposes of this discussion, I am excluding some of the biological mechanisms that can mess with brain chemistry and cause depression, anxiety, bipolar disorder, sociopathy, et al. Those issues can, and do, affect how we interact with the world, both bad and sometimes, good. Lincoln, my favorite president, likely was a much more empathetic person because of the depression he suffered from.

In reading this article, I was struck by the possibility of microbes/parasites possibly being able to influence creatures toward altruistic behavior. And in a sense, I can see the Darwinian argument at play here. Darwin’s theory is often called “survival of the fittest,” and to be sure, the strongest and fittest of the creatures often survives. However, another interpretation of the theory is that the creature that is more adaptive to change is the one that will survive.

Darwin clearly struggled with how to explain altruism, though I tend to agree with his idea that a group’s cooperation with one another would give them an advantage in staying alive. This article actually makes the case that this altruism goes down all the way to the bacterial level, and that they can be stronger by encouraging altruism in their hosts. Fascinating stuff.

[ndmclain-blog]

The Halcyon Days of Labor

We spoke in class yesterday about nonprofit membership associations, and as part of that discussion, touched on trade unions and so-called “right to work” laws. The final paper that I am doing for this class addresses labor unions in America, so I figured I’d touch on the topic a bit this week.

Although I am not part of a union (nor is my father) my grandfather worked for 50 years as a union construction worker. He raised three children (who went to college) in a comfortable middle-class existence doing that work, and he retired with a substantial pension that allowed him to build his own dream cabin, which I loved.

Those days seem quaint now. I’ll be lucky if I retire by 70. Pensions are mostly nonexistent. Wages are stagnant, and have been for more than 25 years. Employer-sponsored health plans continue to offer worse and worse coverage.

I must admit that I am sympathetic to the idea of trade unions. I think they have been vilified to an unreasonable degree. Without them, it’s unlikely the things we take for granted today — the 8-hour day, the 40-hour work week, safe working conditions, et al. — would be in existence. People were maimed and even lost their lives to give us those things.

Trump promised a lot of things that he never intended to deliver on during his campaign, but I think the most disappointing one, and the one I saw through transparently at the time as pandering, was the idea that the “factories are coming back” — that manufacturing was going to come back to America. The one-two punch of automation and globalization ensured those days are gone.

But what of trade unions? The far-right in America has done a good job demonizing unions. And there have no doubt been instances of corruption and incompetence among union leadership. Even with the right’s best efforts, a recent poll showed labor unions with a 61 percent approval rating in America.

Although unions in manufacturing may not have been able to stem the tide of job losses to globalization and automation, what about so-called “knowledge workers” or the “professional class?” Sure, some of it could (and is) automated or outsourced. But would it be the worst thing in the world to see if people could come together and try to unionize? The relationship between ownership/management and workers/employees have been trending in one direction for a long time now.

Perhaps I’m being a bit of a Pollyanna. In that same poll page I linked to above, more than 70 percent of Americans favored “right to work” laws. I have my doubts that people truly understand those laws or its effects, but even with that, a disturbing number of people are fine with it. It’s unfortunate. As more people take advantage of “right to work” laws, they get to enjoy the benefits of unions without having to take any of the risk — the “free rider problem.”

This is exactly what conservatives in America wanted when they began to put these laws forward — to further undermine unions. And it’s worked. Perhaps people are too self-oriented to make sacrifices that will benefit the group. That’s part of the reason why health care is still not where it needs to be.

Polls show Bernie Sanders is the most admired politician in America (admittedly not a high bar to clear these days), and his support of the revitalization of trade unions is pretty clear. I admittedly was a “Bernie bro,” but I never thought he would (or will) become president. More important though, his popularity shows that progressive ideas have a bright future, especially with young people, if only the politicians have the stones to tout them.

I’m a cynical person, and I doubt the tide will turn on this issue, but I’m hoping it does.

[ndmclain-blog]

Mo Money, Mo Problems

Earlier this semester, we discussed the article, “The Gospel of Wealth” by Andrew Carnegie. He spoke about the responsibility of those who accrue great wealth to give it back to society. He spoke of living a modest lifestyle. And, in a particularly relevant topic given the Trump and (some) Republicans’ tax plan which involves elimination of the estate tax, Carnegie didn’t believe in leaving his fortune to his heirs.

A slight majority of Americans favor lowering or repealing the estate tax, though it has been said, and I agree, that they wouldn’t feel that way if they understood the issue properly. Other polls show that Americans feel that wealthier people are not taxed enough.

Nevertheless, while at least still on this planet, the first-generation wealthy need to do something with their money. And, on the model of Carnegie, they are philanthropic, though, as this NY Times article shows, they’ve done it a little differently.

This article talks to the founder of the Inside Philanthropy website and he says that rather than be stewards, these folks want to solve society’s problems — and solve them now, while they’re still alive.

Our readings this week included a chapter on foundations by Kenneth Prewitt, where the history of foundations and how they’ve evolved where covered. In it, both Carnegie and John D. Rockefeller were discussed as not believing in charity, which they envisioned as a temporary band-aid; rather, they wanted to address what caused the need for a band-aid.

That’s all fine and good; however, this article does raise the concern that these billionaires, still alive, are very active in how and where their funds are dispensed. In a sense, a moneyed elite are determined what causes are worth their valuable dollars.

In some cases, that means their money goes toward causes that have political undertones. As such, the Bill Gates, Mark Zuckerbergs, and George Soros’s of the world are criticized. By all accounts, they are willing to shoulder that criticism if it improves society as they see it. But there’s a flip side to that, as well; conservative philanthropists like the Koch Brothers also use their money to advance their agenda, which includes the growth of conservative dogma and questioning the existence of climate change.

Though I may agree with how Gates and Soros spend their money and loathe how the Kochs spend theirs, I at the very least acknowledge that it is their right to do so in their lifetimes, especially when the wealth they accrued was their own. I have a tougher time believing they should hold their wealth past their deaths.

I’d go the other way and raise the estate tax, considerably. It might motivate those who are sitting on their funds to actually use them when they’re alive. And if they don’t spend it, it goes back to the people. Either way, the economy would likely get a greater boost by the funds actually being used than if it sits in a bank.

As pertaining to foundations, I have a tougher time negotiating that one. I think that foundations should have very clear, specific aims if they are to retain funds after the passing of their benefactors. Otherwise, over time, the intended purpose of the foundation may become muddled over time.

I guess I’ll have a decision to make when I inevitably make my billions.

[ndmclain-blog]

Nonprofit advocacy - an overlooked but vital role

http://www.njnonprofits.org/NPsCanLobby.html

During class this week, I presented my synthesis of the readings we had. While most concerned nonprofit roles, some addressed advocacy work. This was close to my heart, as my primary nonprofit experience was working for a national nonprofit technology trade association as a government affairs manager.

I read and followed legislative bills and proposed agency regulations around the country, looking for anything that could prove damaging to our members’ industry. If a bill or regulation was problematic, we lobbied against it, often traveling to that state, testifying in hearings, and meeting with the legislators at stakeholder meetings.

Beyond bill analysis, I also worked on volunteer recruitment. Given that our advocacy department was two people in an industry comprising thousands across the country, we needed a robust volunteer network, so I worked to recruit from among our members those that were politically inclined and got them involved. They often spoke at legislative hearings and met with legislators to voice their concerns.

We also formed coalitions with other associations in our particular technological niche. Often times, even though these coalitions included huge names like Best Buy and Google, our little nonprofit lead the charge.

As I talked about advocacy in class, I saw some eyes glaze over. To be fair, that was often the response my boss received when he presented our department reports at monthly staff meetings. While I understand that some of it may be true, the truth is, without advocacy, our members could find themselves, quite literally, out of business.

I’m sure smaller nonprofits don’t even think there is the time or need to advocate. I would caution them not to brush it off so quickly. Remember: advocacy isn’t just lobbying. Lobbying is just one part of advocacy, and hopefully, it just the last resort when other efforts fail. Both the Almog-Bar/Schmid and the Lobbying Guidelines readings sort of say the same thing.

I would encourage nonprofits to advocate in smaller, more proactive ways. For example, if your nonprofit has fundraisers or annual dinners or major events, have you considered inviting the local state representative for the area your headquarters is located in? Regardless of party, politicians want to get their face out there, and to be associated as a friend of the nonprofit world is not a bad thing for them.

If your organization deals with issues that policy-related, have you offered to serve on planning or advisory groups? This could provide an opportunity to hobnob and work side-by-side with politicians; these contacts may prove fruitful down the road if you find yourself in a jam.

Now, if you do eventually do some lobbying, my advice: the IRS ‘substantiality test’ is a bit too discretionary for my taste and leaves your organization up to IRS whims. I’d consider, if your organization gets involved in advocacy, to take the 501h election.

The trade association I worked for had a 501c6 designation, which was a little more loose on the rules concerning lobbying. That being said, having read the guidelines this week, I don’t think lobbying for 501c3’s is necessarily problematic, especially if you file the 501h and instead are governed by the ‘expenditure test.’ Take a look at this chart:

How realistic is it that your nonprofit would go over these limits? Granted, if you hire a lawyer to lobby, that can add up fast, but lobbying doesn’t have to involve lawyers. And remember, there is still plenty of advocacy work that your organization can do that is subject to no limits whatsoever!

Even from the time of DeTocqueville, people have noticed that associations have a valuable political role. Obviously care must be taken not to appear to overly partisan, but wise, judicious use of advocacy can take nonprofits to another level.

[ndmclain-blog]

Nonprofit Sustainability: The Holy Grail?

http://nonprofitaf.com/2014/12/can-we-all-just-admit-there-is-no-such-thing-as-nonprofit-sustainability/

In the study I read this week by Stephanie Moulton and Adam Eckerd, “Preserving the Publicness of the Nonprofit Sector: Resources, Roles, and Public Values,” they determined that “earned income is negatively associated with performance on the innovation role and is not significantly associated with the other roles.” This was inconsistent with the idea that nonprofits who focus on earned revenue can be free to be “more innovative and less constrained by donor or funder expectations” (675).

It was in this light that I found this post on the delightful blog, “Nonprofit = Always Fresh.” I found it interesting that nonprofit initiatives receive pushback from foundations and donors if the ideas’s eventual financial self-sustainability can’t be proven. The author believes that sustainability is ultimately not a real possibility, nor a desirable one if it could even be reached. I got a chuckle out of this particular sentence: “Chasing after this concept called ’sustainability’ is like searching for the fountain of youth, or El Dorado, or the Holy Grail, or a copy of the original Star Wars movie that has not been bastardized by George Lucas (Han shot first!).”

If every project had to prove its eventual financial sustainability, the author says, most projects would never get off the ground or eventually undertaken. He states that the pressure on nonprofits to become self-sufficient ultimately leads to mission creep, wasted time/resources, and a change in public perception. That seems consistent with the Moulton/Eckerd study.

For better or worse, many big donors are seeking self-sustaining projects, so nonprofits on the lookout for the big sharks may have to deal with such questions. At least some have done this, and there are advocates for it.

We’ll see where it goes!

[ndmclain-blog]

What does social capital matter if they’re all like you?

https://www.nytimes.com/2017/09/28/opinion/trump-republicans-authoritarian.html

There was a lot of hand-wringing among Democrats and those left-of-center over how Trump managed to win the 2016 election. Although many reasons led to the result, it seems obvious that the Democrat forsaking of “Middle America” played a part. Hillary Clinton famously did not make much of an effort to campaign in Rust Belt states like Michigan and Wisconsin — areas taken for granted, assumed to go blue but did not.

I thought it was interesting, in reading the New York Times article above, the results of the study in states like Michigan and Wisconsin (and Indiana). People in the conservative areas of the country, while scoring highly on social capital, scored lower on social tolerance — they had critical views of African-Americans and immigrants.

After reading Putnam’s “Bowling Alone” piece this week, it made me wonder: what value, if any, is social capital if it’s completely insular? Sure, it helps to be a member of the “Old Boys Club” or the Knitting Club or the Bible Reading Group when you’re looking for work in those regions, but what if you’re not of that ilk? We talk about pluralism in this country, but it seems that, at least in conservative areas, a type of segregation still exists, if at least in the mind.

Karen Stenner, a Princeton professor, had an interesting quote in the article: “It is a lot easier to be generous and considerate and civic-minded and invested in one’s community if one’s community is full of people much like oneself.”

That quote harkened me back to our class discussion this week of what constitutes “community” and what makes certain places more engaged than others. My neighborhood is not homogenous, in almost any measure. There are white folks, Hispanics (including my wife), African-Americans, etc. The homes vary in quality and size, and in fact a growing number of the homes aren’t even owned; they are rented. Some are lower middle-class; plenty are firmly in the lower class. There are people who have lived in the neighborhood for 30-plus years, as well as those of us who are very young and new to the area.

My neighborhood has no community groups that I’m aware of. There is some neighbor intermingling, but usually between those who are similar. People mostly keep to themselves. I find it depressing at times. Is it possible to have a true community among people of so many different stripes, not just race, but economics, education, etc.? I don’t know the answer. I hope so.

While social capital has a lot of value, I think it cheapens it a bit when it’s just people from the same backgrounds. Our class discussion about the diversity problem in nonprofits, particularly on the boards, sort of highlights that for me. We must strive to be better at expanding the diversity of our social contacts if any of us, whether in a nonprofit aspect or any other, can claim to be truly representative.

[ndmclain-blog]

Nonprofit group seeks to restore feeling of community

In August, I attended a luncheon in downtown Indy, a fundraiser for a nonprofit faith-based group called the Ten Point Coalition. I was actually attending to visit with a relative of my wife, but in the process, I learned a lot about an organization that I think is trying its hardest to bring the idea of “community” back to Indianapolis’ most violent neighborhoods.

In recent years, Indianapolis has experienced a rising murder rate. That doesn’t appear to be slowing down in 2017, regrettably. I was born on the east side of Indianapolis, and though I moved around the state in years since, I returned to the east side to buy a home and start a family with my wife. With a son born in June, I am even more concerned about this issue and safety of where I live.

That is why I am encouraged by groups like the Ten Point Coalition. I am not a religious person, and, like Berger and Neuhaus mention in our readings, I probably have a liberal’s skepticism toward religious-based nonprofit groups receiving government funds or being involved in public policy.

That being said, I think that religion can play an important role in fostering community. A lot of these areas have been ignored by an increasingly conservative Indiana government. Jobs are hard to come by. Even Trump’s promise to keep jobs for Carrier employees hasn’t panned out as expected. With few opportunities, many turn to the drug trade and the violence unfortunately has largely come out of that.

The Indianapolis Ten Point Coalition, a 501(c)(3), is primarily run by a board of African-American religious leaders and has a small staff. The volunteers frequently engage in what the group calls “Faith Walks” or “Faith Patrols,” walking through particularly hard-hit areas and trying to engage with those who are at risk. ITPC also has re-entry programs where it finds work for ex-offenders returning to society through various means.

The most visible activity of the group (or at least the one that gets them on TV the most) however, seems to be “Homicide Support.” After a murder, ITPC workers and volunteers come to the area and control it so police and do the necessary work; in addition, they try to calm emotions and provide emotional support. They also seek to explain to those close to the victims about what the IMPD is doing as a way to foster better understanding of what the police does and facilitate a better relationship with them. That particular aspect of things reminds me of Berger/Neuhaus and the idea of nonprofits acting as mediating structures between citizens and government.

Indiana Attorney General Curtis Hill has given more funding to the Ten Point Coalition with the aim of bringing the program to communities all around the state. In addition to cities like Gary, Kokomo, Muncie, and Fort Wayne, TPC is also talking to folks in Louisville and Cleveland about establishing similar programs.

While their mission is a difficult one, ITPC does point to some successes, such as preventing a murder in the Butler-Tarkington area for 600 days and counting.

In our readings this week, Smith and Lipsky say that “community members are those who elect to consider themselves part of a larger collectivity.” I think for many of these neighborhoods, that has been lost in recent years. I’m rooting for ITPC to help them regain it.

[ndmclain-blog]

Can nonprofits help restore competition?

Earlier this week, I turned on one of my favorite programs, Last Week Tonight with John Oliver. During his weekly ‘deep dive’ into an issue, he discussed corporate consolidation and the ramifications that result when consumers have fewer and fewer choices.

Admittedly it might be a reach, but it got me thinking about our readings this week concerning government and market failures and nonprofits filling the niches created as a result. With consumers being left with less choice (thanks to mergers) in their providers in areas like Internet, energy, health insurance, et al., might it behoove people to create nonprofits to compete?

As I said, I might be completely off-base here. If I am, I am confident Professor Levine-Daniel will let me know. While mega-mergers aren’t necessarily a market failure, per se, I would conclude that they are, in fact, a government failure, in that government in a properly functioning democracy would prevent monopolies/oligopolies. Alas, our democracy is far from functioning properly.

As a result of these oligopolies, consumers cannot get bids from different providers and use that information to bargain for more or to get a fair price. Going back to our readings, oligopolies perpetuate information asymmetry and thus, contract failure.

Moreover, the lack of competition makes these companies lazy when it comes to innovation and customer service. Among the companies with the worst customer service, you’ll find massive companies in industries with little competition (Comcast, AT&T, Anthem, Verizon, Aetna, etc.). In addition, in places like rural areas, people may have difficulty convincing the ‘big boys’ to do the necessary work to bring service to them.

As Dennis R. Young discusses in Chapter 11 of our readings, nonprofits are typically viewed as more trustworthy (thanks to the non-distribution constraint, the perception of altruistic staff, and other reasons) and thus serve as a corrective to contract failure. For that reason, nonprofits in areas with otherwise little competition might fill the ‘credibility gap,’ so to speak (sorry, I’ve been enjoying Ken Burns’ ‘Vietnam War’ this week). At the very least, coming together as nonprofit co-ops might give people more leverage in negotiations with companies. 

A cursory Google search showed some examples:

• https://www.heraldnet.com/news/darrington-nonprofit-working-to-offer-internet-access/

• http://www.tampabay.com/news/business/energy/co-ops-help-homeowners-turn-purchasing-power-into-solar-power/2339052

• http://rbj.net/2017/09/27/rochester-district-heating-cooperative-finishes-infrastructure-updates/

Nonprofit health insurance emerged after the passage of the ACA and failed, though it appears there were many reasons for this.

Anyway, just some food for thought.

[ndmclain-blog]

Overhead Myth Undermines Nonprofit Talent Acquisition

In the readings this week, it was mentioned in more than one place that nonprofits are often more highly looked upon because there is a perception that the staff (including executives) are willingly making less money to do altruistic work. As Hansmann says, “[their] actions are guided by ‘low-powered’ non-pecuniary incentives, including pride, professionalism, and identification with the goals of the organization.”

At a certain point, however, even the most giving of people need to bring home the bacon. Thus, the industry’s high turnover rate, ranging from 15 to 20 percent depending on the source, makes sense.

Certainly, the data shows the disparity in pay at the higher levels. In 2016, the median salary for nonprofit CEOs was $123,362, more than 25 percent less than the median amount in the for-profit industry.

A sensitivity to public perception of overhead costs (stemming from the overhead myth) is a likely at least a partial factor in lower nonprofit salaries. How can nonprofits attract promising candidates without being able to pay like the private firms? Or, having discovered a staff member is particularly talented, how do they try to keep them if they can’t give them a substantial pay bump?

To make matters worse, an August 2017 article on Associations Now cites a study showing a large majority of nonprofits lagging behind in establishing an official talent-acquisition strategy or a formal talent-retention program. Operating at a disadvantage in salary offerings, nonprofits also appear to struggle at promoting themselves as good places to work, as well as a place where employees are valued for good work and are given opportunities to grow (like through continuing education opportunities).

Most nonprofits, of course, rarely have the resources (in time or money) to do this. Even the nonprofits who could afford to beef up their efforts may not do it as a way to avoid persistent questions about overhead costs. Because, lest we forget, efforts to improve in these areas also contribute to overhead.

So what’s the answer? Beats me. Nonprofits may just always have to live with certain uncertainties when it comes to staff defections. In addition, getting the best candidates may be an impossibility. Nonprofits may just to have to cross their fingers and hope that their best employees are supremely altruistic and will stay, while promising candidates will be attracted to nonprofit work for reasons behind pay, to do work that provides intangible benefits if not always the tangible ones.

The alternative is to work to turn the public’s negative connotation with overhead expenses and destroy the overhead myth. How to do that? That’ll have to be a discussion for another day.

[ndmclain-blog]

“I just want someone to talk to...and a little of that human touch.” - Bruce Springsteen, ‘Human Touch.’

This isn’t as much related to this week’s reading in class, but I thought it was interesting nevertheless. It’s also pretty indicative of what I saw going on at the nonprofit I worked at, with staff becoming far too dependent on email blasts, Facebook, Twitter, and the like when reaching out to members, regardless of whether it was for fundraising or information purposes.

The result was a disconnect that I could palpably feel with our members. They had no idea what was going on and just thought we hit them up when we needed money.

One of our staff members came up with the idea of having events in various cities throughout the year. Prominent volunteers and staff (one or two of which would travel to the city) in that particularly area would update them on our initiatives, show our appreciation for their membership, etc. But more important, they got to know the staff face-to-face, not just as names in an email. These events yielded a lot of people who ‘bought in’ and became volunteers themselves. And these were people of all ages, both young and internet-savvy and older and less tech-inclined. No matter your age, getting to know people “in the flesh” (so to speak) is nice.

I say this as a (relatively) young person, technology is nice, but it shouldn’t be a crutch. And it can often make people lazy. Getting out there in the community is vitally important to engaged stakeholders.