The Nonprofit Model is Broken…so what do we do about it?

Should we fix it? 

This is a fascinating topic, especially for someone like me who is obsessed with bringing stronger, healthier management practices into the nonprofit sector. What if the answer is to radically alter the sector altogether? What if the answer to nonprofit management problems is to eliminate corporatized management structures that are not suited to the relentless pursuit of change and mission-driven service work? Services and creativity are, after all, not traditional commodities to be bought and sold on the market.  What if we empowered workers, artists, audience members, organizers and the recipients of services to provide guidance to nonprofits?

(This bums me out, because as much as I want to believe that the arts and nonprofits are exceptional and operate in different moral, ethical and market spaces than traditionally organized businesses, this is not true. We all operate within the capitalistic framework of the United States economy. We’re stuck here. Any organization that seeks to operate within the mainstream has to deal with it at some point. Right? Am I too embittered?)

Even when I consider leadership positions, like a Managing Director or Executive Director job (I have been a candidate for two this year), I always joke that it would really solve all my issues with authority–I wouldn’t have a boss, I would be the boss. But that isn’t really true. The Board would be my boss. These are people whose financial investment entitles them to their opinions about how an organizations is run, what its priorities should be, and how its mission is executed. What’s the Dylan song? You gotta serve somebody? (Yeah, I just did that.)

From the article:

The corporate model imposed on nonprofits forces arts organizations to take on a hierarchical structure, where CEOs and board members hold much, if not all, of the decision-making power within the organization. Which, by the statistics, means that wealthy white folks control most nonprofits — according to the BoardSource Governance Index, 2010, 88% of CEOs and 84% of board members at the less than 2,000 organizations that responded to the survey are white (the National Center for Charitable Statistics estimates that there are, in fact, over 1.5 million nonprofits in the US, so the BoardSource survey represents a self-selected group of less than 0.1% of non-profits who are eager to taut and increase their diversity). This should raise questions about whether or not the people that these organizations claim in their mission statements and grant proposals to be serving are actually represented when it comes to decision-making. In the case of most arts organizations that I know of, based on their mission statement, their constituency is comprised of artists and/or the communities living in and around the place where the organization is located. I’m not going to suggest that all artists or communities are non-white and poor, but I know of very few instances where artists or truly representative community members sit on the board of arts organizations or serve as their presidents.

Board diversity aside, though it is a critical problem to be addressed (and I am so excited to read about racial, ethnic and gender diversity, but also about a diversity of perspective and economic positions being included in this discussion), the issue of management and leadership structures in general need to be examined in the nonprofit sector.

Why should management and leadership structures mimic those of corporate America? Should they map onto the way that services are provided and decisions are made? Having worked in a number of small, nimble, innovative arts-based nonprofits, I can say you from experience that these organizations are personality driven, and these leaders are usually not interested in formal hierarchy. They are, however, interested in power. (We all are, to a certain extent, if only to preserve our own jobs. (I would push back and say that while an organization need not replicate traditional or corporate models in its structure and decision-making processes, nonprofits could absolutely benefit from applying proven management techniques from the for-profit world in order to manage employees to success, improve issues like “Brain Drain,” burnout and “churn,” and operate more efficiently. I would suggest that the idea that mission-driven nonprofit workers are somehow exceptional and don’t require compensation, time off, opportunities for professional development and advancement, or meaningful feedback is precisely what is destroying the nonprofit field by driving away passionate, smart young workers. I cannot yet adequately defend this argument, but give me some time.

Another very quick note: poking fun at the “Nonprofit Industrial Complex” is about addressing the very serious problem that nonprofits are about generating salaries for its leaders, laundering money for its funders, and not providing services for constituents. Based on Eisenhower’s warning about a Military Industrial Complex emerging in the wake of WWII, we live in a world were profits and personal interests are enmeshed in a variety of government and social programs. If you watched the DNC last night, you heard a number of politicians talk about reclaiming Medicaid from the Insurance companies. We’ve read about KBR and Halliburton profiteering off the War in Iraq. Are there nonprofits that exist purely to profit off the misfortune of others? Surely. 

Anyway, that’s my rant for the day/week. Thoughts? I am going to save up my ducats and buy that book.

HT/ Hyperallergic and You’ve Cott mail

PS. Do you guys like Byliner.com and Lonform.org? I clearly do.

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