Under health reform legislation, community health centers were to have received $11 billion over five years to expand their capacity to care for the 32 million people who will be newly insured as of 2014. However, federal budget deals have effectively gutted the expansion allocation for 2011 – and 2012 is looking equally grim. With just three short years to prepare for a dramatic increase in demand, community health centers can no longer be certain of the funding necessary to build or upgrade facilities, or to hire additional staff, to ensure that the millions of newly insured have a place to go.
Like so many nonprofits, operating on thin margins is nothing new to our community health centers, and they have consistently proven just how resourceful they can be – but demanding that they expand their capacity while withholding the means to do so is nothing short of a “set-up.”
One of the more exciting opportunities of health care reform was to have been the development and testing of new collaborative models, such as Community-based Collaborative Care Networks and Accountable Care Organizations. And while we would prefer to see this strength-based approach to collaboration win the day, the diversion of community health center expansion funds reminds us that collaboration is also a strategy for dealing with adversity.
The California HeathCare Foundation views collaboration as an essential strategy for community health centers to be able to draw upon – in both good times and bad. We have partnered with them over the past three years to develop resources to help clinic leaders assess their collaborative options. We are also in the midst of working with four clinic groups in California, providing technical assistance as they explore and develop partnerships. We look forward to sharing what we learn from this continuing work in future posts and publications.
AbilityFirst is a Southern California nonprofit serving people with developmental disabilities. They came to La Piana Consulting at the height of the Great Recession in 2009 in order to think about strategies for responding to economic change. Our Real-Time Strategic Planning (RTSP) process was a perfect fit for their needs because they wanted to know how to make good decisions in the face of change, and RTSP focuses on creating a Strategy Screen—or list of criteria—to guide decision making.
The challenge: the state of California provided approximately 50% of AbilityFirst’s funding either directly or indirectly—and the state was in the throes of a major budget crisis. The last state budget process had resulted in significant cuts to state funded services, and the prospect for additional major cuts in coming years was certain. AbilityFirst knew they had to be prepared to survive these cuts.
Over a period of two months we used the RTSP process with a committee of board members and senior managers to develop critical elements of the Strategy Screen and to analyze information about other providers in the field.
For AbilityFirst, the process focused extensively on identifying the organization’s competitive advantages and using that as primary criteria to guide decision making. These competitive advantages included specialized facilities for both camping and after school programs that no one else could match, as well as a significant financial reserve.
On a sunny winter day in a meeting room overlooking the Santa Monica beach, the full board of directors gathered for a planning retreat. The specific agenda was to confirm the Strategy Screen that had been developed by the RTSP committee, then apply that screen to the Big Question facing AbilityFirst: which programs would receive priority protection as funding diminished?
The board quickly approved the Strategy Screen and systematically applied the tool to consider the organization’s ten programs. The discussion was focused, but rich in details that staff would later use in executing on the board’s decisions. By the end of the day, the board had identified two programs as not core to fulfilling the organization’s mission. The staff had its marching orders: consider how to shed these programs over time in a responsible way.
Over the next six months, one of the two programs was easily transferred to another agency, ensuring that clients received ongoing services. The second involves complex and long-term financial and legal agreements and could not be eliminated in the short term. That said, the organization continues to negotiate a possible transfer of the program to another nonprofit specializing in the field.
The State of California continued to face major budget challenges in the 2010-11 and 2011-12 fiscal years, resulting in further cuts in funding for the developmentally disabled. AbilityFirst was ready and continues to thrive.
The result: AbilityFirst continues to be a highly focused nonprofit providing the most effective, high quality services possible to meet the needs of its clients and to fulfill its mission. In the face of financial pressures, it is operating in a manner that is sustainable over the long run and now has decision making tools at its disposal to continue to develop and refine future strategies.
PHOTOS: Courtesy AbilityFirst and Jim Douglass
Traditional corporations are legally bound to put profit maximization ahead of other goals. If they don’t, shareholders may sue. Benefit corporations operate under a broader definition of success – one that includes material positive impact on society and the environment. Specifically, benefit corporations must: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of employees, community and the environment when making decision; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.
Vermont and Maryland were the first states to enact benefit corporation legislation, in 2010. New Jersey, Virginia and Hawaii followed earlier this year. New York is poised to become the seventh state to join the movement, and similar legislation has been introduced in Colorado, Michigan, Pennsylvania, and North Carolina.
Entrepreneurs with a desire to advance a social or environmental mission while generating value for shareholders now have another concrete tool for doing so. It isn’t the only tool – B Corp status is another way for a for-profit corporation to signal its intention to prioritize social and environmental benefit along with the creation of shareholder value. B Lab, the nonprofit organization that certifies B Corporations, was one of the sponsors of the California’s benefit corporation legislation.
Like many, we’re still following the evolution of the L3C (low-profit limited liability company), a corporate form just a little over three years old. Over the course of those three years nine states and two federal jurisdictions have enacted L3C laws, and according to a recent tally by interSector Partners, there are now 488 L3Cs organized across the country. The L3c movement has not progressed without controversy, but much of that has focused on the usefulness (or not) of the L3C in paving the way for foundations to fund for-profit entities via program-related investments (PRIs). A 2010 research study indicated that the ability to pursue PRI’s wasn’t, in fact, the primary motivator for most early L3C founders – that the appeal lay more in the ability to create “a for profit with a nonprofit soul.”
Time will tell which corporate form – or forms – will truly take off. For now, I’m just excited that there are an increasing number of options. May the momentum continue.
When animal rescue worker Jessica Almeida moved from Los Angeles, CA, to Salt Lake City, UT, she discovered that small breeds are rare in Salt Lake City. As Rescue and Transfer Coordinator for the Humane Society of Utah, she found vacant cages at the local UT shelters and long-waiting lists of families eager to adopt small dogs.
In contrast, the Los Angeles metro area euthanizes approximately 60,000 animals per year. Robin Harmon, Adoption Manager of Best Friends Animal Society of Los Angeles, sees county shelters flooded with homeless “purse dogs,” or small breeds that have become popular fashion accessories thanks to Hollywood films and celebrity trends.
How could these organizations work together to achieve their shared goal of saving dogs from euthanasia? The answer: Pup My Ride, a van shuttle service from Best Friends Animal Society of Los Angeles to the Humane Society of Utah in Salt Lake City.
Joining the collaboration, The Jason Debus Heigl Foundation, provides funding for the shuttle services and celebrity star power. The Foundation, was founded by actress Katherine Heigl and her mother, in memory of their son and brother, Jason, who died tragically young in a car accident. Jason loved animals and the foundation supports nonprofit animal rescue efforts and other animal rights programs.
Today, Pup My Ride transports 20-30 small dogs, twice a month. With nearly 3,500 dogs saved by Pup My Ride in its first 2 years, Best Friends Animal Society is exploring national expansion of the program. If you represent a shelter that has a shortage of small breed dogs for adoption, email RobinH@bestfriends.org or donate $5 by texting PUPPY to 90999.
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Although the study does not delve into attendant questions, such as how diversity in leadership impacts a nonprofit’s ability to effectively serve diverse populations, or what confluence of dynamics are behind the underrepresentation of leaders of color in one of the most diverse states in the nation, it is nevertheless valuable in providing basic quantitative benchmarks that seem to be lacking in the nonprofit sector as a whole. In a recent interview for our NonprofitNext research project, Michael Watson of Girl Scouts of the USA observed the dearth of baseline data on nonprofit diversity, both in staff leadership and in the board room. Whereas the corporate sector has long made a point to share demographic information about company leadership – recognizing what this means not only in terms of image but of real impact in the marketplace – the nonprofit sector has yet to be as transparent about its own diversity…or lack thereof, as the case may be.
The Urban Institute study is one small step toward assembling objective data that may enable the sector to better answer the question “How diverse are we?” But this quantitative approach cannot stand alone – only by understanding how diversity supports mission-driven work and helps make the sector more effective, responsive, and resilient does this data become truly meaningful.
Without a broader context, the numbers alone invite oversimplified and reactionary responses the likes of which have plagued us for decades of affirmative action pro/con debates (evident in reader comments on coverage of the report’s release in both the San Jose Mercury News and the Chronicle of Philanthropy) and are even less effective in advancing the dialog today. To help us move beyond the limitations of this “representational diversity” frame, we need to share compelling stories and experiences of how more diverse nonprofits contribute to a more dynamic, successful, and high-performing sector.
The NonprofitNext initiative has enabled us to meet many pioneers, people who are reinventing the nonprofit sector as we watch. They are young and older, working within the sector and outside of its official borders. They are in large cities and small towns across the country. They think differently about leadership and organizational life, technology, civic engagement, and the very concept of nonprofit. In our new report you can read some of their stories. But this is not a “final report” from a static project. It is rather a call to engagement in inventing the future, together.
The release of the report is being launched at Independent Sector’s annual conference this week in Detroit. Jim Canales, President of the James Irvine Foundation, will announce it in his plenary session. Heather Gowdy and Alex Hildebrand, two of my colleagues who are leading the way on this effort, will be on site, blogging about the conference, IS’s FutureLab project, and other interesting events.
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