Thursday, 17 September 2009

Stanford Social Innovation Review : Articles : The Nonprofit Starvation Cycle (August 18, 2009)

Stanford Social Innovation Review : Articles : The Nonprofit Starvation Cycle (August 18, 2009)

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Unemployment and Efficiency – A Necessary Connection?

Posted by Richard Marker | September 17, 2009 | Category: Best Practice, Professional Development | Leave a comment It hit me – something is wrong with this picture.

It hardly surprises when we read a press release announcing that another company or non profit has reduced its staffing – usually accompanied by a note of regret that financial exigencies – or some other carefully worded euphemism – necessitated these reductions. [A firing by any other name, even if part of a crowd, is the loss of a job.]

The recent deep recession has almost inured us to these announcements – after all, what can one expect during a time when income, purchasing power, and contributions are down and prospects for improvement hardly in the offing?

But in the last few days, two national not for profit organizations announced a restructuring which, incidentally, included staff reductions. What got my attention was that both energetically denied that finances played any part in the decisions. “Efficiencies” would mean no reduction of services but that they would be provided differently.

What, I wondered, does that really mean? That they are asking already overburdened and probably underpaid non-profit workers to take on even more portfolios? Have they somehow found a way to use technology to obviate those professional services? Are they trying to make a point to their supporters that they are tough enough to make the hard decisions even if the finances don’t demand them?

Then I remembered: for the last decade or so, virtually every merger or new executive of every for-profit company would proudly announce that their newly merged or restructured company would increase profits and earn the confidence of shareholders by – what else? – reducing personnel costs. Efficiencies and elimination of duplication of services would yield immediate results, justifying the “multiples” and projected profits into the future. It is hardly surprising that non-profits follow suit.

How quickly we forget that it was not so many years ago when companies prided themselves on the growth of their workforce, on how they were improving the quality of lives of those who were connected to their enterprise, that they could reduce work-time to 5 days [and those days were 9-5!]. Now no one flinches when a private company or even a non-profit reduces benefits, expects 24/7 commitment, and reduces workforce. It is as if all of the promises of a humane modernity have been reversed – all too often in the guise of efficiency or profit.

You may ask: “isn’t this the wrong time to be raising this question – at a time when businesses and non profit organizations are fighting for survival?” Why argue for changing the employment paradigm when the struggle is to avoid firing even more people?

For me, this is the best time to remind us that pressures on companies for short term profit have pushed our investments in people and long term strategies to a lower priority and disposable luxury. This is the best time to remind us that the relentless, and often ill advised push for non-profit efficiency has too often led non profit employers to lose sight of the value of their most precious resource – their own workers and the values that drive them.

I raise this issue on a philanthropy blog because, as the economy slowly and fitfully rebounds and philanthropy follows, it is incumbent upon funders to reinforce the right kinds of changes, adaptations, and efficiencies, and not be taken in by the often dubious or misplaced applicability of for-profit mentality in the independent sector. Do we really believe that a non-profit delivers better service because the workers are pushed to carry larger workloads – with few benefits or guarantees – than before? Do we really believe that we are fulfilling a vision of a caring society by having fewer people employed? Do we really believe that the ultimate measure of the success of any group or business or organization is that they can do as much with less?

As a society, the unemployment and underemployment crisis has been a long time coming. It reflects attitudes that predated the current financial crisis and, sadly, will outlast its recovery. I only hope that one of the lessons learned is that a post modern, technologically advanced, and complex society should not sacrifice its soul on the backs of its workers.

One wonders: if we had retained the value of employees, employment, and quality of life over the last 15 years or so, would we be in the mess we are today?

Richard Marker serves as an advisor to foundations, independent funders, and not-for-profit organizations; he is a Senior Fellow in Philanthropy at NYU’s George Heyman Jr. Center for Philanthropy. Richard specializes in strategic philanthropy and planning. He is an occasional contributor to eJewish Philanthropy and regularly blogs at Wise Philanthropy.

Tuesday, 1 September 2009