Nonprofit Board Crisis

Hospital Gone Wild

What's so "nonprofit" about the University of Pittsburgh Medical Center?  Hard to say why it needs a nonprofit status when, according to the Wall Street Journal, the Medical Center "manages a transplant center in Palermo, Italy, runs two Irish cancer centers, provides consulting services and docs to a medical system in Qatar", and is now on its way to being the biggest health care provider in Ireland "paying $22 million for a 25% stake in Beacon Hospital. The company that owns that facility has plans to build three more hospitals in Ireland, which would be operated by UPMC under similar arrangements. The med center is also discussing new contracts with medical centers in Dubai and Cyprus".  And, they are not alone, "The Cleveland Clinic, for example, is working on a project in Abu Dhabi and pursuing contracts in China, Guatemala, Brazil, Egypt and India".

Senator Grassley, where are you?  We all know that health care systems are anything but nonprofit, including the nonprofit ones, so lets either make sure they need to be nonprofit to fulfill their missions or tax them -- we know it's not going to matter to the insurance companies.

Hospitals Gone Wild

What's so "nonprofit" about the University of Pittsburgh Medical Center?  Hard to say why it needs a nonprofit status when according to the <a href="http://blogs.wsj.com/health/2008/02/27/in-revenue-quest-pittsburgh-med-center-goes-global/">Wall Street Journal</a> the Medical Center "manages a transplant center in Palermo, Italy, runs two Irish cancer centers, provides consulting services and docs to a medical system in Qatar", and is now on its way to being the biggest health care provider in Ireland "paying $22 million for a 25% stake in Beacon Hospital. The company that owns that facility has plans to build three more hospitals in Ireland, which would be operated by UPMC under similar arrangements. The med center is also discussing new contracts with medical centers in Dubai and Cyprus".  And, they are not alone, "The Cleveland Clinic, for example, is working on a project in Abu Dhabi and pursuing contracts in China, Guatemala, Brazil, Egypt and India".

Nonprofit Relationships Count: Don't They?

Isn't all fundraising about "who you know"?

The <a href="http://www.nytimes.com/aponline/us/AP-Knox-Retaking-Government.html?_r=1&scp=6&sq=nonprofit&st=nyt&oref=slogin">New York Times</a> reported today that one county in Tennessee is pretty fed up with their government grant making based on "who you know".

According to the times: "Earlier this month, the community services director resigned after the Knoxville News Sentinel reported her office had dispensed thousands of dollars to nonprofit organizations to which she had personal ties."

OK, so it's tainted money but it's getting the job done, isn't it?  That's a question I believe the county residents should also be asking as they question the distribution of funds in this way.  And what ever happened to relationship fundraising?  Isn't the theory that you give to those you trust can get the job done?  Maybe the county residents are over-reacting, at least on this count?  I would like to see the results from these grants.  And that's what the county residents should want to see before they move their employees out the door.  Relationship grantmaking is most frustrating to those who don't have the relationship, and rightly so, 'cause it's not always fair.  Good projects can lose out.  But relationship grantmaking can also make for successful grants.  Isn't this why we structure nonprofit boards with "who's connected".  Or is the whole system just not right?

Good old fashioned relationship fundraising

Isn't all fundraising about "who you know"?

The New York Times reported today that one county in Tennessee is pretty fed up with their government grant making based on "who you know".

According to the times: "Earlier this month, the community services director resigned after the Knoxville News Sentinel reported her office had dispensed thousands of dollars to nonprofit organizations to which she had personal ties."

OK, so it's tainted money but it's getting the job done, isn't it?  That's a question I believe the county residents should also be asking as they question the distribution of funds in this way.  And what ever happened to relationship fundraising?  Isn't the theory that you give to those you trust can get the job done?  Maybe the county residents are over-reacting, at least on this count?  I would like to see the results from these grants.  And that's what the county residents should want to see before they move their employees out the door.  Relationship grantmaking is most frustrating to those who don't have the relationship, and rightly so, 'cause it's not always fair.  Good projects can lose out.  But relationship grantmaking can also make for successful grants.  Isn't this why we structure nonprofit boards with "who's connected".  Or is the whole system just not right?

Red Cross Response to Deficit

No use kicking the Red Cross when it's down -- kinda been down a while and been kicked plenty...

Today's newspapers reported that the Red Cross National Headquarters would be making a big layoff thanks to a big deficit - this is sad indeed and certainly complicates the struggles the Red Cross has faced over the past few years. 

One quote from the Chronicle of Philanthropy via the Chicago Sun Times caught my attention: Stacy Palmer, editor of the Chronicle of Philanthropy, said “the woes of the Red Cross have caused some frustration throughout the nonprofit sector.

"When something's amiss at the Red Cross, it reflects on the whole charity world."

Now this is an interesting statement.  Is the Red Cross really a barometer for the nonprofit sector?  As goes Red Cross goes the sector? 

I don't believe that folks in the nonprofit sector wind their clock around the Red Cross -- woes or successes.  If you tell me they wind their clock around what happens at Gates or Ford or MacArthur and around big and small donors affected by the economy, I think that would be accurate but Red Cross -- no -- the Red Cross is not a bell weather for the times unless you want to talk about the need for stronger governance and management -- now that's something folks might follow...

How will Boards stay focused: Social Capitalist Entrepreneur

The failure rate for entrepreneurs — whether social or purely capitalist — is high. Still, ePals’ backers are betting that it is worth the risk. “These kinds of opportunities to do well and do good at the same time don’t grow on trees,” said Mr. Kapor, the ePals investor and a philanthropist. “But I do think that ePals could be one of them.”

That's the final thought in a New York Times Sunday February 24, 2008 article which discusses the for-profit ePals and reviews the brave new world of social enterprise and the lines being crossed to pursue social responsible outcomes.

It all seems too good to be true as noted at the beginning of my blog -- but is the risk worth it -- will socially responsible outcomes really result and at what cost and to whom? And where and when does philanthropy fit in?  And does it?  Also relevant is a Chicago Tribune article about the roles of the government and nonprofit sectors in caring for the poor -- really a story about competing missions.  Isn't competing missions the story about social enterprise and nonprofits too?

Children's Hospital Loses Support

Interesting <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/15/BALKV2KP3.DTL&hw=children+hospital+oakland&sn=004&sc=539">story</a> in the San Francisco Chronicle about how the Children's Hospital in Oakland California lost its effort to get the public to support building a new hospital.  Lots of missteps that ultimately led to a "no" vote.

Good news is that the Hospital Chair presented an apology for a variety of non-community building approaches to getting their plan approved.  It's good to see the public step forward and say "hey, we were left out and you were presumptuous" and force the hospital to go revisit its plans and more importantly, its communications.  Nonprofit hospitals are, in theory, products of the people (whether that is in reality a fact is another matter).  This is a good example of people at least standing up to the hospital.

It's also good to see the Board Chair deliver the message.  The board should own this overall but I hope there's conversation about who really is responsible and of course, consequences.  Where was staff in all this -- did they fail the board -- or did the board approve the whole plan?  Questions to be asked and answered.

Grassley Kudos

As I have followed here, Senator Grassley has been poking around in the college world suggesting that the mega-endowed schools ought to be doing more with their endowments.  He even has floated the idea that large college endowments spend 5% of their earnings annually mirroring the requirements of private foundations (in order to maintain their nonprofit tax status).

In the race to avoid legislation (not necessarily the race to be better), Thursday's 2-21-08 <a href="http://online.wsj.com/article/SB120355379651781513.html">Wall Street Journal</a> reported that Stanford will "no longer require parents earning less that $100,000 to pay tuition.  It said it also will not ask families earning below $60,000 to contribute at all to the cost of their child’s education, including expenses for room and board."

The same article noted that Harvard offers a similar package to Stanford for those earning below $60,000 plus students from families earning up to $180,000 pay 10% or less of income.  Dartmouth has free tuition for students earning less that $75,000 a year.  The University of Pennsylvania is offering loan-free aid packages to students with families under $100,000 annual income and Yale is giving everything to those families earning less than $60,000 and for those with incomes of between $60,000 and $120,000 the cost is 1-10% of family income.  Families earning more than $120,000 pay about 10% of income (kinda like tithing).

So, have these schools avoided Grassley dreaded intentions? 

As for me, I am not convinced by the college's offerings.  For one thing, just how many students do any of these colleges admit that meet these criteria.  These offerings look good on paper but what will this really cost the schools -- even 1/2% annually from the endowments?  I think we must applaud the appearance but let's look closer at the real impact.  Have the colleges just found a clever way to stave off regulation and continue to amass wealth -- just like their graduates?

Grassley "Pressure" Produces Results

As I have followed here, Senator Grassley has been poking around in the college world suggesting that the mega-endowed schools ought to be doing more with their endowments.  He even has floated the idea that large college endowments spend 5% of their earnings annually mirroring the requirements of private foundations (in order to maintain their nonprofit tax status).

In the race to avoid legislation (not necessarily the race to be better), Thursday's 2-21-08 Wall Street Journal reported that Stanford will "no longer require parents earning less that $100,000 to pay tuition.  It said it also will not ask families earning below $60,000 to contribute at all to the cost of their child’s education, including expenses for room and board."

The same article noted that Harvard offers a similar package to Stanford for those earning below $60,000 plus students from families earning up to $180,000 pay 10% or less of income.  Dartmouth has free tuition for students earning less that $75,000 a year.  The University of Pennsylvania is offering loan-free aid packages to students with families under $100,000 annual income and Yale is giving everything to those families earning less than $60,000 and for those with incomes of between $60,000 and $120,000 the cost is 1-10% of family income.  Families earning more than $120,000 pay about 10% of income (kinda like tithing).

So, have these schools avoided Grassley dreaded intentions? 

As for me, I am not convinced by the college's offerings.  For one thing, just how many students do any of these colleges admit that meet these criteria.  These offerings look good on paper but what will this really cost the schools -- even 1/2% annually from the endowments?  I think we must applaud the appearance but let's look closer at the real impact.  Have the colleges just found a clever way to stave off regulation and continue to amass wealth -- just like their graduates?

Only thing wrong with tainted money...

The Washington Post reported Sunday on a unique fundraising program that is raising steady bucks for a number of nonprofits through a form of gambling that was actually approved by the supreme court as "not" gambling (the element of chance is absent).  It's called bingo but it's done through machines that are slot-like in that the action happens on a screen and cash is the ultimate prize.  More interesting to me is how little money is made for the nonprofit -- about 10-20% if I am calculating correctly.

You know, the only thing wrong with tainted money is there tain't enough of it.  And really, as many of these groups recognize, 10-20% of $1.00 is more than $0.