Are Non-Profits afraid of Competition? How can we tackle the root causes of hunger in America? Tough Questions from a Community Grantmaker – A dialogue with Mari Ellen R. Loijens, CFRE.

Mari Ellen Loijens

Is there a life after food banking? Apparently so. Mari Ellen Loijens worked in development for Second Harvest Foodbank in Santa Clara and San Mateo County from 2000 to 2004, and is now the Chief Philanthropic Development and Information Officer for the Silicon Valley Foundation.

Of course it is every fundraising professional’s secret fantasy to then go on to work at a foundation and give it away rather than have beg for it. (Without appreciating the challenges that go with such a responsibility). So what’s the difference between your time in the food bank looking out, and outside the food bank looking in?

When I was at the food bank, the needs were constantly growing. There was no single year where we had to feed less people than the year before, and I had a strong sense of urgency about the growing need. Now that I’m outside, it seems like it’s endless and I’m more anxious for real solutions to the issue.  It’s sort of like being an emergency room doctor, and your concern is how to bandage all the wounds for those who need immediate assistance. Then when you walk outside the emergency room, you think, “How can we avoid the people going there in the first place?”

That’s a question a lot of food bankers are asking themselves. Like me, they’ve seen the capacity of food banks grow with their success at fund raising and their ability to bring more food in to their service area. This has created more ongoing demand, so it’s kind of a spiral.  How do you think that food banks could get out of this demand spiral and move towards a long-term solution?

We really need to look at some policy changes.  We are a very wealthy nation and the notion that we have so many people who turn to others for such a basic need is troubling.  Clearly there is something wrong with a system in which many children go to school hungry.

Food banks and other nonprofits are always very reluctant about stepping into these waters, because they worry about offending donors whose political slant may lead them to believe that we are just ‘enabling’ people.  How can we navigate these waters?

Want to dip your toe in…

I think that the problem is that we focus too narrowly on just food.  If you only think, “I need to feed people,” and you think, “That’s my only issue,” then we’re back to the doctor in the emergency room who would be saying: “I’m trying to get people to stop bleeding, and it’s so expensive to keep using up all these wound dressings. So the solution is that we need more money for more wound dressings.”  It’s a symptom he’s dealing with, not the cause. In the same way, hunger is the not cause, it is the symptom of a greater problem in our system. This comes down to something like minimum wage.  Do we have a living wage?  Are people able to earn enough where they live in order to take care of something as basic as food and shelter? We have got to move beyond pushing for increased SNAP (food stamp) benefits and into the bigger issues like: How do we make sure people, who are able, can earn enough money to feed themselves and their families?

So, are you saying that hunger is a symptom of the condition of poverty, or of something else?

I think poverty itself is also a symptom. I’m not a socialist or a communist. I don’t believe that everyone should make the same money, but I do believe that Americans, if asked, would say it’s wrong to have a system which forces people to constantly be in abject  poverty and unable to get out of it, even if they are working hard, perhaps at multiple jobs.  At some point, we are going to have to make decisions about how we pay for our beliefs and values. In the same way we are asked to make tough decisions now about taxes and how we want to pay for the things that we believe our country needs, such as roads or to provide the fire and police services that we want. In the same way, we have to ask ourselves the question: if we think it’s wrong for a child in a developing country to make a dollar a day sewing t-shirts, how are we going to provide an adequate minimum wage so that people in America who work a whole day can feed themselves and provide at the most basic level for their families?

And so how do you see the situation in America now?

I think we have an unspoken social contract in this country which prevents people from moving up out of poverty, and much of that is as a result of not have a living wage in most places.  We also do not have systems in place that update the minimum wage as the cost of living modifies in an area.  The systems that we do have reward the wealthy and do not help the poor.  This means we have to really look at our whole social contract as a country and our value system and say, “Have we set in place laws that support the values that we claim are American?”

Bumper sticker seen outside Santa Barbara’s swankest hotel.

This is the point in the conversation where people begin to squabble about the meaning of the ‘American Dream.’ I see an unspoken fear in many donors I talk to. I would preface my comments by pointing out that these donors are caring and generous people who sincerely want to ‘pay it back’ and provide some level of support for those in need within their communities. However, they may have a voice deep within them, that reminds them how hard they had to struggle and sacrifice to get where they are, so why should they make it easy for someone else? They often don’t see the incredible daily sacrifices and struggles of those in poverty who can find no success story on the back of their struggle.

Whatever the sentiment, Uncle Sam gets pressed into service to wag that finger.

This is why food banks have been so successful, because there is a lot of interest in ameliorating the symptoms but a deep fear of taking the plunge to actually deal with the causes. Either donors are concerned that they will be heavily taxed and lose what they worked for, or they fear that the fabric of American society will change and everyone will expect things to be provided for them without working for them. Consequently they see America losing its ‘can do’ spirit of entrepreneurship and resourcefulness. The type of change that is required to actually deal with a problem is too scary. The same thing is true for issues of immigration, health care and the rest of the sad litany. This means we have to stand around with our hands tied or else harken back to some previous time in our country’s history where these problems were better hidden.

I think a new consensus for action needs to arise that returns the much-loved but threadbare teddy bears of left and right political philosophy to the nursery shelf, and for us to admit that we have grown out of them. They’ll always have a fond place in our heart they were both great in key moments at getting us to the point we are now at as a nation, but now they are getting in the way as our nation enters maturity. These security blankets are getting under foot and gridlocking our ability to do what we do best as Americans – which is to fix something in a no-nonsense straight-forward way.

“I’ve been manhandled so much, I don’t remember whether I’m Republican or Democrat.”

I know from over a decade of working to assist either the homeless or the struggling, that the amount of people sitting on their gluteus maximus and freeloading their way from society (amongst poor people, anyway) is absolutely tiny, just as the amount of people defrauding SNAP benefits is a minuscule amount in relation to the total. Are we going to allow an obsession with preventing the enabling of a few who don’t want to help themselves hold us back from making huge achievements as a country for the vast majority of Americans who work so incredibly hard?

Sounds great, we should import that stuff to America! (Cheaply, of course)

Can you imagine what greatness we could achieve as a nation if we weren’t all so consumed with fear about being able to get affordable medical help, or that we will be living in abject poverty as senior citizens? Modern free market economies are driven by so much advertising and marketing, that are showing people all the things they need to have in their lives to be happy. These forces provide a huge encouragement for people to produce more and earn more. If we can provide a counter-balancing support safety net for all Americans, it won’t extinguish this desire for more – which is equally part of the American temperament. The two can complement each other perfectly well. It’s not exactly a shining city on a hill, but it’s a workable system where we can all move forward at our own pace and to our own ability.

Forgive me for that. As a food banker, if you see a pile of pallets, then your natural inclination is to climb on top of them and start spouting off…

That’s quite all right, Erik. Keep breathing. Seriously, though, I think food banks need to get get braver about legislation. You need to move past the daily problem of feeding people, and start to collaborate with others that can focus on solutions and really start to ask the difficult questions of, “What’s the issue?”  Yet for reasons that you mentioned, like when you referred to SNAP fraud, I think food banks are very afraid sometimes of moving in that area, because if you did a survey of people you feed and even one person said, “Well because I don’t feel like working.”  That’s a terrible, terrible fear of food banks. Suddenly, no one might want to fund their food bank, because there is one person whose is working the system. So essentially, we are ready to punish and live in fear of that one person.  Well, there is always going to be someone working the system.  There are people who go to emergency rooms, because they don’t feel like paying for a doctor. We absolutely can’t set up systems to deal with that one person. We look at the big issues in our country like educations reform and how healthcare reform and you hear about those things all the time. I would love to hear our country talk about poverty reform.  How we are going to help make a sweep of changes that would impact the base line of our country and help bring people who are essentially stuck because it’s impossible to move on or move out.

So, who do you think are the right people to lead this movement or does it need to come from a ground swell at a local level?  

I think both. That is how the civil rights movement happened.  You start with that real grass roots movement from people who are experiencing the issues and people who support those people.  Then at some point you get the attention of people in a power position with legislation to be able to move those issues forward.

You mentioned that food banks are timid on the public policy front.  What else do you think food banks could do to make this happen? 

Well, I really like the ideas espoused in your blog about how your food bank is working on regarding entering the preventative healthcare arena. I do think that when you start to see yourself as part of a wider system rather than just an individual issue, then you are able to address bigger issues that have bigger impact. Poverty is not the root cause.  People became poor for a reason. The fact that they are poor is not the issue.  The fact that they became poor and can’t get out of being poor is the issue.

This requires food banks to build broad coalitions with other social service agencies in their service areas, some who may be member agencies and some who may not.

That is a challenge, because there is often reluctance for everyone to sit down and have a substantive dialogue about how do we move things forward?  The subtext from non profit leaders can often be: “I don’t really want to be in a room with them.  I don’t want to compete with them.”

Hey, you’ve been in some of the same rooms as me!

That’s the truth about a lot of nonprofits is they’re just completely uncomfortable with the idea of competition, and if I had the answer to this issue, I’d probably be able to save the world.

Nothing wrong with a little friendly competition.

Well, we’re non profits. Competition is way too business-like and vulgar for us, right?

Yes, you’re very sensitive souls. But, it has to start with non profits admitting it is an issue. Then I think, speaking as a funder, that there is a clear role for funders in facilitating this issue. I think it’s all power dynamics. The one with the power has the obligation. Foundations really have the obligation to reach out to the nonprofits and say, “I really want to know and I really want to understand what’s going on.  Why is this collaboration and conversation not working for you? Where they don’t have to sit in front of their competitor and say what their fears are. We can ask who would you want to collaborate with and how, on what terms?”  I think having an honest dialogue is what moves things forward. This sort of thing needs to occur one on one or in small groups. Large gatherings can neutralize everyone’s desire to make anything happen.

I think what you say about the competition angle is very interesting, because it’s kind of taboo to talk about nonprofits competing. To be a good non profit citizen, you can only talk in the language of shared impact and collaboration. It might be very liberating for people to also have a conversation about competition and to say it is absolutely all right. I presume there is fear that we would be acknowledging duplication of service if we acknowledged competition. Certainly something for people to consider starting a discussion about in their service area.

How do you think food banks and other human services and nonprofit should be thinking about evolving their funding streams over the next few years?

I think if you are looking for systems change, at some point that goes against the grain for sustainability, right?  You want to be working towards your services not being needed anymore. The ideal is that you want to be able to talk about what system changes are you creating, so that you should have to provide fewer and fewer services every year?  That should be the big boast.  “Last year we fed 200,000 people, but this year, thanks to our hard work, we only have to feed 150,000.”

But every nonprofit organization in the world is afraid to do that, because then they assume that the funders will come back and say, “Oh, you need less money this year.”  And so the organization declines.

I think that there is a new generation of funders that have a very different way of thinking, and that what people really want to see are problems solved.  People are tired of the same problems staying around for generations and generations.  You’re right, though. Every nonprofit I know like to boast about how they did even more; served even more. It is a treadmill. But this new generation of funders comes from a very different way of thinking that would say: “No, no, no. The metric I care about is not how many people you serve, but that you made systemic changes so you will have to feed fewer people moving forward.“ It is a way for your organization to evolve to be truer to its mission.

Mari Ellen, thanks so much for your ideas and for your work supporting non profits.

Divided We Stand? Facing the challenges of Collective Impact, Corporate Philanthropy, Earned Income and more – A dialogue with Jan Masaoka, ED of CALNonprofits.

Jan Masaoka

Jan Masaoka is a leading writer and thinker on nonprofit organizations with particular emphasis on boards of directors, business planning, and the role of nonprofits in society. She has recently assumed the mantle of Executive Director of the California Association of Nonprofits. (CalNonprofits).

She is Editor-in-Chief of Blue Avocadothe essential online nonprofit magazine with an amazing 63,000 subscribers. For 14 years she was executive director of CompassPoint Non-profit Services (www.compasspoint.org), a consulting and training firm for nonprofits based in San Francisco and Silicon Valley.

She is an eight time designee as one of the “Fifty Most Influential People” in the nonprofit sector nationwide. Her recent book with Jeanne Bell and Steve Zimmerman, Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, (Jossey-Bass, 2010) has quickly become a vital tool for nonprofits to truly assess the financial impact of their range of activities. (I will explore the teachings of the book in another post.) My conversation with her was an opportunity to revel in her rich experience and take-no-prisoners plain talking. This makes everything she says not so much a condemnation of how things are, but an invitation to question, question, question. And we can’t have enough of that.

Jan, you are new in your position at CalNonprofits, yet already you are involving the organization in a major initiative to get nonprofit staff, volunteers and clients signed up to vote (for the recent California elections). I have noticed that some nonprofits shy away from such activities in their direct service programs because they are fearful that some donors might say they are ‘becoming political.’ How can you deal with that?

First of all, this is non-partisan voter registration to get out the vote. We’re not telling people how to vote. We are saying that whatever the ideals and values that brought you into contact with the non-profit sector, vote with those values.

Nonprofits are not outside of communities, they are the ways that a community organizes to take care of itself. But I also think that we don’t just serve people, we represent them. Anybody that’s serving children with disabilities, for instance, is also representing them. There is a lot of heavily lawyer-scrutinized information in the Legal FAQ’s section of CalNonprofit’s website which indicates what nonprofits can and can’t do in this area.

LOOKING UP AND DOWNSTREAM

In my discussion with Jan Poppendieck, she touched on the need for food banks and similar organizations to put more emphasis on looking up and downstream from what their own particular level of involvement was with clients.

This is vital. I can think of an example of a shelter program for runaway kids that used to be funded by the government. They received a fee for service based on a performance outcome basis. The designated outcome was reuniting kids with their families, and they would receive a certain amount of money for every kid they reunified with his or her family. But if you look downstream and think about it for 10 seconds you realize that with some kids, reunification is a good outcome but for many others, it is no. There were a lot of kids being returned to abusive homes or to a home where drugs were being used all the time. The nonprofit realized they needed another goal, of more long-term shelter for those kids who didn’t have good homes to go back to. They received no government money for this, so they had to raise it. And then looking upstream, they realized they had to advocate to get the policy changed that specified unification as the only goal. If they had only thought of themselves as a little factory of unduplicated units of service they might have remained focused on the unification numbers. But because they are representing this part of our community, they had to find the best outcome for them even if it didn’t mean they got any money for it. Standing on the sidelines is easy, but is no longer an option if we want to achieve big things.

 GOVERNMENT, BUSINESS AND NONPROFITS

We hear a lot about the supposed realignment of the roles between government, business and nonprofit organizations. What is your take on this?

I think it’s about smoke and not fire. I just read in today’s paper that some country music star is going on a tour, and in each of 25 cities, he’s going to buy a house mortgage free for a veteran there. That’s wonderful, and great publicity for him. Unfortunately this is not really an example of private dollars helping veterans in a significant way, it is more about winning a lottery, and that is no way to help those around us. We have over a million veterans in the United States and he’s buying houses for 21 of them. So I think that the idea that private money is going to supplant the need for government money will never be true.

I‘m jes’ tryin’ to help best I can. Don’t be dragging me into your whiney little blog.

 So, kind of like with Tom’s shoes concept, which sounds great (and full disclosure, my ten month old, Mia Regina has a ‘metallic tweed’ pair she received at her baby shower) but actually does little to build a sustainable way for people in those countries to create the businesses to help provide shoes for themselves. 

Tom’s Metallic Tweed Shoes for Baby

Yes. I member a California foundation that poured millions and millions into working with the schools and weren’t getting much in the way of results and someone explained that they had really only put in about as much as the lightbulb changing budget for the Los Angeles Unified School District. These problems are too big for most foundations to move the needle on, or for government to excuse themselves from.

What about the ways in which businesses and nonprofits can work together more? Don’t you think that businesses are starting to approach some things like a nonprofit and vice-versa?

Businesses always absorb what is the culture of the day, in order to sell their products. So for example there was a time when paisley prints were radical and wild. So people who wore paisley or had long hair practically saw this as being anti-corporate. Then business took that over and people with long hair were in commercials for cars. I think that right now we have a similar cultural view, which is about doing good in the world and being community-oriented. Don’t get me wrong, it is important and valuable, but I think like every other cultural movement business uses this and when the cultural movement passes, business will pass too.

Maybe if he hadn’t been wearing a paisley hoodie…

But, corporations are run by and made up of people (just ask Mitt Romney) so those people can always express their generosity and concern about the world, despite the business imperative. We’ve come a long way from Johnson and Johnson’s shareholders suing the company when it attempted to divert some dollars to philanthropic activities. Helping the community is always smart business, so I don’t see that changing.

Sure, but when doing good crashes up against consumerism is where things often grind to a halt. So, for example, all the people who are passionate about sustainable agriculture might not want to realize that the most significant thing they could do about reducing the energy cost in agriculture would be to stop eating lettuce. Lettuce uses more energy cost related to the nutrition it provides than any single produce item on the planet. And yet you don’t see environmentalist calling for the end to eating lettuce. So I think that it can become a symbol of how we want to do things and see ourselves, but we don’t really want to make any changes to our consumer lifestyle.

COLLECTIVE IMPACT

COLLECTIVE IMPACT

On a local level, how do you think that nonprofits can collaborate and get some kind of collective impact?

I think the way that food banks work with their member agencies is an excellent example of bona fide collective impact that is generating extra value. For the most part, the smoke around collective impact and collaboration is not about something that genuinely works but creating the appearance of something that’s going to work. Almost all of these efforts are funder-driven and the funders put money into them and when the funders take the money out, it collapses. And that suggests that it’s it’s not a business model that works.

 So what sort of examples can you give where that’s happened?

Foundation after foundation has created local collaborations and they’re around many different areas. Sometimes they are focused around a particular neighborhood and they’ll create a collaboration of different nonprofits and businesses to work on that neighborhood. Sometimes they might be a collaborative of something like domestic violence shelters working across 6 counties or the like. Many of these collaborations have grown organically over time, so they actually work. But others failed, like the Hewlett Foundation’s neighborhood improvement initiative and Annenberg’s initiative in public schools, the San Francisco Foundation’s Lifeline collaborative. They were put together in a way that didn’t make business sense for any of them and so when the outside money disappeared, the collaborations evaporated. So the collaborative initiatives that last are the ones that genuinely make sense for people and almost all of them are started by the nonprofits themselves, not by funders and their consultants.

I think funders have got to build on existing community strengths. And if there is not an organic community strength in that particular community then maybe you can’t fund them successfully.  Maybe you have to look for a different community or maybe you have to take a longer view and say maybe there are 6 or 7 weak organizations in that community but let’s take a longer view of building their strengths. Instead I think what tends to happen is that a foundation that wants to work in a particular community or field and they see 5 or 6 weak organizations, then they figure if they just had a consultant to bring them together for collective impact, then it will all work out. It won’t.

One of the things that keeps nonprofits honest is that we get feedback from the market and we have two markets – a client or patron market and then we also have a funding market, so we have to work in both of them. Whenever you’re in a situation when you don’t have to work with those markets, then things can go wrong and you’ll never know it. That’s kind of like back in the old Soviet Union when the state decided  what a factory should produce. There was no reason for anybody to get any better. Any institution that is not kept in check by some kind of market goes bad and doesn’t know it.

And so how can a foundation avoid getting into that situation then?

They can support community-based efforts as opposed to starting their own initiatives. I visited a foundation recently and they had on the wall a large poster that they had created with a circle. And in the middle of that circle was their logo, very large. And then around the outside of the circle were other foundations and nonprofits. They said to me that this represents our view of how we collaborate with other people and I felt like – No! – this represents your view of how you’re in the center of the universe.

EARNED INCOME

I did a recent post about earned income for nonprofits. What is your take on this area?

A former consulting client of mine, for example, was running an organization they did a lot of psychological counseling for people and families across the spectrum. They received funding to support this work and then when that funding declined, they focused more on earned income. So, they were able to successfully grow their earned income side, and their budget didn’t look any smaller. But if you look closer, they’re now primarily serving people that can afford to pay rather than across the economic spectrum. And I think that this story writ large has been the hidden story of the move toward earned income.

You don’t feel that this can be balanced by having scholarships or sliding scales?

I think it can be mitigated and it’s a partial answer for some organizations but we need to be alert that so far at least many of the earned income gains have come at the cost of helping middle class people rather than economically disadvantaged people.

Many food banks resell purchased food or require a shared maintenance fee of a few cents a pound for some food items that they provide to member agencies. Some food banks don’t do that but we have found that in situations where there is no fee, it leads to inefficiencies with organizations taking more than they need.

So you introduced in a market element, right?

Yes, we’re not charging individuals, we’re asking organizations to take a financial stake in what we’re doing.

You should realize that I’m not trying to sound like I’m anti-earned income. I’m just saying earned income is not a replacement either for charitable dollars or government money.

I read your recent Blue Avocado post “In the Titanic Recession, Which Nonprofits Get the Lifeboats?” and this touches on the ideas you have just expressed about a shift from services to the very poor.

Yes, nonprofits that provide “the most basic anti-poverty for the poor and homeless failed at around twice the rate of more mainstream services.” Also, only about 16% of foundation funding is targeted to low income communities.

Which you lay at the doorstep of the focus on “innovation, social enterprise, outcome metrics and the coolness factor.” Jan, this is hitting me where I live!

It should! But I think food banks are hardly the type of organizations that are in this situation. They are doing some of the most important and pressing human work. And these and other organizations are where the money and focus should go.

Thanks Jan. There is a lot to think about there. Please continue to challenge us.