Latest From Nonprofit Quaterly

As National Geographic Examines Its Own Racism, Are There Lessons for Nonprofit Leaders?


March 13, 2018; Washington Post and NPR

The publication of the April 2018 issue of National Geographic has drawn much attention for its focus: the 130-year-old magazine’s self-examination of its history of racism. For those who have long gazed at the depictions of black- and brown-skinned natives of other continents on the pages of this highly respected journal and admired the photography and the writing, the admission that both the photos and the writing were slanted and racist may now send many of us back to the piles of magazines stacked in attics and basements for another look. Could this also raise questions as to how our nonprofit work plays out over time? Looking at how National Geographic came to its self-examination reveals some interesting points.

Editor-in-Chief Susan Goldberg titled her personal introduction to the April issue of the magazine, “For Decades, Our Coverage Was Racist. To Rise Above Our Past, We Must Acknowledge It.” And even this introduction has met with mixed reactions.

It was an extraordinary concession from the magazine. Renowned for its photography and its coverage of science, history, anthropology and the environment, National Geographic has also faced criticism over the years for reporting on the world through a narrow, white, Western lens.

Breanna Edwards of the African American-focused news and culture site The Root called the move “the first step to righting a long-overlooked and perhaps even taken-for-granted wrong.”

“Bluntly acknowledging its own past in this way is indeed powerful, but it is not necessarily something, I think, that we should applaud, as much as we should expect,” Edwards wrote, “especially at this time in our lives when race and discussions of racism and even general cultural insensitivity can be volatile, tense and perhaps even deadly.”

Others were more critical, including Vox’s Kainaz Amaria, who tweeted that the magazine’s “colonial visual legacy” had, in effect, trained nonwhite, non-Western people to allow themselves to be “exploited and otherized.”

In a move to insure credibility for National Geographic’s commitment to its own admission and study of its racist past, it brought in John Edwin Mason, a University of Virginia professor specializing in the history of photography and the history of Africa, to do a deep dive into the magazine’s past. His findings, according to Goldberg’s introduction to the issue and in interviews with Mason himself, found an editorial slant at the magazine that ignored people of color in the United States and focused on native populations in Africa and Polynesia who, Goldberg wrote, were shown “as exotics, famously and frequently unclothed, happy hunters, noble savages—every type of cliché.”

Goldberg and Mason also found that National Geographic was racist in what it omitted from its coverage. A 1962 article on South Africa neither quoted black South Africans nor mentioned the massacre of 69 black people by police in Sharpeville 2½ years earlier.

“That absence is as important as what is in there,” Mason said in Goldberg’s piece. “The only black people are doing exotic dances…servants or workers. It’s bizarre, actually, to consider what the editors, writers, and photographers had to consciously not see.”

Until the 1970s, National Geographic did little to challenge stereotypes in white American culture, Mason found.

National Geographic wasn’t teaching as much as reinforcing messages they already received and doing so in a magazine that had tremendous authority,” he said. “National Geographic comes into existence at the height of colonialism, and the world was divided into the colonizers and the colonized. That was a color line, and National Geographic was reflecting that view of the world.”

The pain in putting themselves out there for all to examine is clearly felt in Goldberg’s writing. But the hope for where National Geographic will go from here is also what stimulated this issue and what is indicated as a year-long examination in future issues of the magazine.

“The coverage wasn’t right before because it was told from an elite, white American point of view, and I think it speaks to exactly why we needed a diversity of storytellers,” Goldberg told the Associated Press. “So, we need photographers who are African American and Native American because they are going to capture a different truth and maybe a more accurate story.”

But for National Geographic, the pain in this process continues as their cover story, depicting American mixed-raced twins, one dark-skinned and one fair-skinned stimulated further controversy, including an opinion piece in the Washington Post by Victor Ray, a sociology professor at University of Tennessee Knoxville.

The cover photo depicts 11-year-old mixed-race twin girls, with the tabloid-esque framing that one is black, the other white. And the headline makes the grand claim that the girls’ story will “make us rethink everything we know about race.”

The “we” here is implicitly white people, and the story of these children doesn’t break new ground so much as reinforces dangerous racial views. The girls in the photo, with their differing skin tones, are depicted as rare specimens and objects of fascination.

Admittedly, my problems with this article are both personal and professional. I’m a light-skinned black man who grew up with my darker-skinned younger brother. We were likely candidates for this type of story.

…And my personal experience leads me to suspect that much of the “curiosity and surprise” that greet these young women come from white people. Black people are aware that we come in all shades.

In seeking to tell its story, did National Geographic still err on the side of its historic white perspective? Is this yet another lesson to be learned for the magazine and for those in the nonprofit sector who seek to change?

Some will only see the flaws in the efforts, and others will see value. Either way, there will be challenges. National Geographic could not continue as it had. It had the reputation and resources to take on the challenge. It has shown leadership, in its own way, for others to follow. Its future issues will demonstrate just what its commitment is. But, as Victor Ray states as he closes his opinion piece, “If National Geographic really wants to atone for its racist past, it should drop narratives that overstate the racial progress we have made and stop misrepresenting racism as a personal sin.” Can nonprofits do the same?—Carole Levine

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A Custody Dispute: Will the Real Nonprofit Board Please Stand Up?

By Marine 69-71 (Own work) [CC BY-SA 4.0], via Wikimedia Commons

March 17, 2018; Arizona Republic

Peoria, Arizona, a suburb of Phoenix, is the site of what seems to be a towering battle for control of the local historical society. Two separate groups claim to be the duly elected directors of the board and have been battling since May of 2017. NPQ wrote about this small nonprofit suffering through a custody dispute last summer. At the time, we wrote:

When nonprofit boards become polarized, there’s always the potential for a public split. These generally confuse the public, containing as they do a mix of personal rancor and accusations of malfeasance, neglect, or dimwittedness. Add in a shared model of governance with a public body and you have a not-so-savory stone soup, as we see in Peoria, where two factions of the former board try to lay sole claim to being the official Peoria Arizona Historical Society.

According to reports in the local paper, the City of Peoria has taken the step to shut down the museum the society operates, even changing the locks on the doors on the five buildings it leases to the society.

One group, which has been operating the society and the museum, is demanding to know why the other group convened and elected themselves as directors and officers of the board. The second group claims that this was done in compliance with the society’s bylaws. If the society has members with voting rights, this might be possible, but otherwise it would seem like a stretch.

Apparently, the city has been willing to let the two sides, which include some of the town’s most prominent families, duke it out until January of this year, when an offer was made to hire someone to negotiate the situation and come up with a resolution. Both sides have said they are willing to participate.

The society does not have a website, and the most recent form accessible through GuideStar is a 990EZ from 2013 that lists only a development director, and no board directors. The website listed on the organization’s Facebook page is not active. The organization is also not listed in the city’s tourism webpage

No reason has been given for this battle, but it seems this has been brewing for some time. The minutes for a November 2016 meeting of the City’s Historic Preservation Commission have Kathy Moore calling for Karen Garbe and another commissioner to step down from the commission. She cited their “lack of trustworthiness as it pertains to their involvement with the Peoria Historical Society” as the reason. Moore is listed in the newspaper article as the treasurer and registered agent of the original board, and Garbe is listed as the treasurer for the group that elected itself in May of last year.—Rob Meiksins

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The Met Opera and James Levine: This Time Was Different

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March 15, 2018; New York Times and the Washington Post

James Levine, the Metropolitan Opera’s music director for 40 years until 2016 and who had retained the position of artistic director for the Met’s young artist program, was fired after a “thorough investigation” by outside counsel. Former US attorney Robert J. Cleary found “credible evidence” of sexual misconduct. This action comes now after years of ignoring similar charges.

In a statement published last Monday on the organization’s website, the Met announced that the “the investigation uncovered credible evidence that Mr. Levine had engaged in sexually abusive and harassing conduct both before and during the period when he worked at the Met. The investigation also uncovered credible evidence that Mr. Levine engaged in sexually abusive and harassing conduct towards vulnerable artists in the early stages of their careers, over whom Mr. Levine had authority. In light of these findings, the Met concludes that it would be inappropriate and impossible for Mr. Levine to continue to work at the Met.”

Levine’s firing ended a relationship between the Met and Mr. Levine that dated back to the 1970s. For the Met, whose annual operating budget exceeds $300 million, Levine’s star power and artistic brilliance were key assets in strengthening their reputation, keeping their house full, and supporting ongoing fundraising. Levine, of course, was very well paid and could flex his artistic muscles on the stage of the nation’s leading opera company.

While they both profited, stories of Levine’s misconduct had circulated for decades. According to the New York Times, “Johanna Fiedler, who was the Met’s press representative for 15 years, wrote about them in her 2001 book, Molto Agitato: The Mayhem Behind the Music at the Metropolitan Opera. ‘Starting in the spring of 1979, these stories came to the surface at more or less regular intervals. Each time, the Met press office would tirelessly point out the cyclical nature of the gossip and the complete lack of substance.’” Levine’s regular strenuous denials seemed sufficient for the Met’s board and management to discount them and take no action.

In 2016, a former student formally accused Levine of sexual misconduct, launching an investigation by the police of Lake Forest, Illinois. The student had initially reached out to a member of the Met’s board, who referred him to the police. Met General Manager Peter Gelb acknowledged in last December’s announcement that the Met was investigating the charges that “this first came to the Met’s attention when the Illinois police investigation was opened in October of 2016.”

At the time, Jim said that the charges were completely false, and we didn’t hear anything further from the police. We need to determine if these charges are true and, if they are, take appropriate action. We will now be conducting our own investigation with outside resources.

Like many nonprofit organizations, the Met’s leadership has long had this problem before them. The current investigation corroborated many charges which, as Fiedler wrote about in 2001, date back to 1979. News reporters have since uncovered multiple cases of similar misconduct before and after he began to work at the Met. Yet it was only in 2017 that the Met chose to publicly acknowledge them as worthy of investigation. What kept them from acting earlier?

Levine’s star power and his vigorous denials surely made the stakes quite high: “As understandably troubling as the accusations noted in recent press accounts are, they are unfounded. As anyone who truly knows me will attest, I have not lived my life as an oppressor or an aggressor.” For the Met’s leadership, going forward meant risking alienating Levine and the donors and fans who revered what he brought to the Company. With a $300 million budget to fund, that apparently weighed higher than defending those he abused.

Thankfully, in this #MeToo era, the equation has changed. Within days of his firing, Levine sued the Metropolitan Opera for more than $5 million in damages, accusing the organization and its leadership of “cynically hijacking the goodwill of the #MeToo movement [and] brazenly seizing on these allegations as a pretext to end a longstanding personal campaign to force Levine out of the Met.” But a lawyer for the Met “said Levine wasn’t the victim of a vendetta but a man fired because of ‘credible and corroborated evidence of sexual misconduct.’”

The Met stood tall and acted decisively. Even the cost of having its previous inaction become public was judged to be less harmful than remaining silent. In this, they are teaching every nonprofit organization a powerful lesson: The times have changed. Charges that were once dismissed out of hand because of the power imbalances of those involved need today to be reexamined. Even if there is no action to be taken, organizational leaders, boards, and staff have much to gain from that process.

The questions that demand our focus are: What would you do today? What stopped us from acting then that will not stop us now? How would you manage the fallout? They deserve to be on every nonprofit board’s agenda.—Martin Levine

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Will Subminimum Wages for the Disabled Finally End?

From the Facebook page of “Dignity Has A Voice.”

March 19, 2018; The Inter-Mountain (Elkins, WV)

Despite growing criticism of the archaic “sheltered workshop” model, there are still hundreds of thousands of individuals with disabilities participating in such programs. “Sheltered workshops” refers to segregated working environments for persons with disabilities where they perform menial jobs such as putting labels on jars or stuffing envelopes for hours on end, often at far less than minimum wage.

While some advocate that sheltered workshops provide vocational training and desired job opportunities for individuals with disabilities, the fact remains that rote work at subminimum wage is not career-oriented training. Rather, sheltered workshops separate individuals with disabilities from their communities while allowing employers to reap large profits. Section 14c of FLSA allows employers to pay certain employees less than minimum wage based on the impact the employee’s disability has on his or her ability to perform the job. Exempted from this are employees performing the duties of a federal contract, in which case Executive Order 13658 requires organizations to pay a minimum of $10.35.

In his article “Federal Law Allows Employers of Those with Disabilities to Skirt Minimum Wage,” Lou Altman aptly asks, “Does the dignity of work for people with disabilities justify a federal law allowing certain nonprofits (and their for-profit partners) to pay a subminimum wage?” The answer from advocates, and arguably those with any moral compass, is a resounding no.

When disabilities advocates fight for job opportunities, it is a fight for meaningful, gainful employment, not work for work’s sake. Moreover, the intent of the Supreme Court Olmstead decision was to ensure that individuals with disabilities are in the least restrictive, and most community-oriented setting possible for all programs and services, which includes employment services. From this point of view, spending hours each day in a segregated workshop can be equated to institutional placement.

In a 2011 speech to the Case Western Reserve University School of Law, Principal Deputy Assistant Attorney General Samuel R. Bagenstos argued, “When individuals with disabilities spend years—indeed, decades—in congregate programs doing so-called jobs like these, yet do not learn any real vocational skills, we should not lightly conclude that it is the disability that is the problem. Rather, the programs’ failure to teach any significant, job-market-relevant skills leaves their clients stuck.”

It is these types of arguments that have led disabilities advocates around the world to fight for higher wages for individuals with disabilities and a shift to integrated community work settings. States such as Rhode Island and Vermont have taken a stand and shut down sheltered workshops operating in their states. NPQ covered the scandal Goodwill Omaha faced when the ugly truth about their sheltered workshop employees earning subminimum wage, while executives enjoy high salaries, came to light. Following suit, other Goodwill branches have shifted from the sheltered workshop and subminimum-wage model after facing public scrutiny.

Interestingly, even as more organizations move away from the sheltered workshop model and states implement policies that help this shift, restrictions at the federal level may hasten the process of making sub minimum wages for persons with disabilities a thing of the past.

A case out of West Virginia illustrates this point. To summarize, the Randolph County Sheltered Workshop (RCSW) was ordered to pay $119,040.63 in back wages to the US Department of Labor after wrongfully paying employees with disabilities subminimum wages. RCSW argued that they were operating in good faith based on documents from the early 1980’s indicating that they were exempt from FLSA since the products their employees with disabilities assembled were only distributed locally. However, in the 1990’s RCSW began selling their products to stores in other states and as such engaged in interstate commerce. Any employee engaging in interstate commerce must be paid at least the federal minimum wage.

This and other sheltered workshop cases raise a few interesting questions: Can today’s growing internet commerce and global economy finally put an end to Section 14c as so few organizations can truly consider themselves exempt from interstate commerce laws? Will the administrative burden of maintaining section 14c status, which includes periodic refiling and employee evaluations, ever outweigh the cost benefit of paying employees with disabilities a subminimum wage? Can the court of public opinion and power of the wallet accelerate the demise of sheltered workshops?— Sheela Nimishakavi

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Competitive Positioning: Why Knowing Your Competition Is Essential to Social Impact Success


This article is from the Nonprofit Quarterly’s fall 2014 edition, Grappling with Competition: The Nonprofit Landscape.” It was first published online on October 27, 2014.

Entrepreneurship is rooted in the entrepreneur’s identifying, seizing, and aggressively taking advantage of an opportunity—and innovation is often at the core of this response. The opportunities for social innovation are abundant and the range is vast: even in market sectors in which there are many established providers, social impact leaders are often able to uncover previously unimagined opportunities and disrupt long-standing equilibriums—whether with a new product or service, or with an adaptation of an existing product or service (via identification of, for example, a new geography, customer, or delivery mechanism). And for social impact leaders assessing the quantity and quality of opportunities, the first step is to understand the market in which they wish to innovate.

Organizations sharing a single market may compete for two key resources . . .

There is considerable competition for support from foundations, corporations, and individual donors, with many organizations vying for grants. Investing in fundraising capacity and talent is seen as a strategic response to the struggle for donations, and for salaries for proven development professionals to continue to rise. Still, competition for funding is driven by an odd combination of performance, reputation, and personal relationships. Because funding decisions are often opaque and market signals unclear, managing competitive pressures in the funding domain is especially challenging.

Where many organizations are concerned, there are always people who can benefit from their services—especially when they are provided for free. When fees are charged, the pool of clients often narrows and the competition for earned income heats up. The competitive pressure for clients has turned marketing from something deemed slightly too business-oriented into expected practice. Without effective outreach to clients, many organizations would be unable to secure the customers they need to both achieve their mission and balance the books. The Market

All organizations, even nonprofits, operate in the context of markets. At the highest level, a “market” is the summation of the various providers offering the same product or service, usually within a finite set bound by a specific customer or geography. For example, the afterschool elementary education market for a particular city would comprise all the organizations providing after-school services to elementary school children. However, organizations operate simultaneously in different layers of markets, and the resulting list of providers that will share that space is directly determined by the defining criteria of the market. Thus, providers in the after-school elementary education market might be further segmented into smaller markets by limiting the geography, the organizational type (faith-based, public, private, nonprofit), or the specific services offered. Each of these filters will yield a slightly different solution set in which an organization can assess both its competitive advantage and its ability to maximize the opportunity for innovation.

Providers within a defined market may be formally competitive or may see themselves as more collaborative. However, in most cases, even in markets of exclusively nonprofit organizations, the providers within a single market compete for donor support and client fees. For example, nonprofit programs providing adult literacy training in a particular city make up the adult literacy market. These organizations compete, at the very least, for limited funding, and also to some extent for clients and access to other resources. While the desire to put other organizations out of business may not drive the competition within this market, the other organizations nonetheless constitute the competitive landscape.

Finally, in some cases a nonprofit may be working in a space that has a significant cap on its resource pool. Understanding the limitations and potential expandability of that pool is an important factor in understanding one’s potential placement in a market.

Benefits of Competitive Analysis

Competitive analysis is a tool that social impact leaders can use repeatedly throughout the life of an organization. In the start-up phase, competitive analysis is fundamental for assessing the quality of an innovation and the risk inherent in its pursuit. As the organization grows, accurate competitive analysis provides dynamic feedback about strengths, weaknesses, opportunities, and threats, thereby guiding the formulation of strategy and providing insight into how and where social impact leaders should focus limited resources.

Many popular tools are available for competitive analysis at various stages in an organization’s growth, depending on the question the entrepreneur seeks to answer. Among the more well known are SWOT, the six forces model, and Michael Porter’s four corners model. Each tool provides a specific lens through which a social impact leader can critically assess the organization, its position relative to competition, and its opportunities for innovation and growth. But our goal here is not to provide a comprehensive diagnostic tool kit for all types of competitive analysis. Rather, we show how one simple but useful tool enables social leaders to conduct a quick, robust, and insightful analysis of opportunity and competition, and from there to maximize social innovation and impact.


As social impact leaders attempt to home in on a perceived opportunity and articulate an innovation with potential for meaningful impact, the process of competitive analysis provides essential feedback on both the quality of the innovation and the risk involved in its pursuit. At the most basic level, the competitive analysis functions as an inventory of other organizations providing the same or similar products or services, and often immediately signals the magnitude of the proposed innovation. More-detailed competitive analysis enables the leader to highlight specific competitors and illustrate what differentiates his or her organization. Clear and accurate understanding of the landscape is essential for creating a powerful organizational strategy.

Unfortunately, when compared with traditional private sector competitive analysis, competitive analysis for the social impact leader can often be more challenging. First, many problems of interest to leaders are partially addressed by multiple markets. Clean water in the developing world, for example, can be provided by drilling new wells, or via filtration systems, or through the sale of bottled water. Second, within those markets, products and services may be provided by many different types of organizations, including for-profits, nonprofits, and/or hybrid organizations. This heterogeneity can make it particularly difficult to accurately map the market. For example, an affordable housing market might include public-, nonprofit-, and private-sector providers. And the array of solutions might include low-priced renovated townhomes, small rental apartments, or shelters.

Why is it important for leaders to correctly identify the market or competitive landscape in which they will operate? First, through this exercise they can orient themselves and assess where their ideas and organizations fit relative to other providers in the space. Second, they can gain critical insight into the risks associated with pursuing an innovation or opportunity. For example, at one end of the spectrum, the social impact leader may find that there are no other organizations currently operating in the market. This strongly signals high risk. On the other hand, entering a market saturated with similar providers is also a high-risk situation. Concentrating on the traits of immediate competitors forces the social impact leader to focus intently on the response to one question: what positively differentiates my idea and/or my organization? All viable, successful, impactful organizations must differentiate themselves on at least one criterion, and to be truly innovative, they will likely differentiate on many more.


Competitive analysis is an essential tool not just for leaders seeking to position a new innovation and/or organization within the context of existing providers but also for established organizations to continually orient themselves in a changeable landscape. All of the aspects of a competitive landscape are continually in flux: organizations evolve internally, developing both core strengths and weaknesses; conditions change externally, yielding substantial opportunities and threats. As a result, to stay competitive organizations must conduct ongoing, dynamic assessments of these conditions and, through those evaluations, test ideas about future growth.


Competitive analysis can also reveal possible opportunities for collaboration. Some organizations may appear to be competitors on the surface but, upon further investigation, turn into potential partners, assuming there are significant differences in terms of the population served, the program services offered, or the geography covered. In the nonprofit sector, given the immensity of social problems and the long list of potential clients, uncovering potential collaborations and fruitful partnerships can be helpful.

While our focus here is on competitive positioning, we do not want to foreclose the possibility of substituting collaboration for competition when collaboration is both possible and advantageous. Indeed, collaboration can turn out to be an organization’s competitive advantage, and how the partnerships are used, its innovation. Opportunities for collaboration generally depend on some overlap in organizational mission and focus, and knowing what others offer can thus be a first step in mapping both competitors and potential collaborators. Collaborations can be difficult to define and manage, however, and sometimes a competitive lens is the appropriate one, even if this proves culturally challenging to nonprofit leaders.

Next, we offer systematic advice for understanding and managing competition.

Determining the Market Preliminary Mapping

All social impact leaders should build a comprehensive map of the overarching competitive landscape. This rapid exercise should yield a picture of many relatively diverse organizations. The benefit of developing the map is to establish a rough boundary for the market in which the organization will operate. At this level, the market may be quite heterogeneous, with limited overlap among the organization’s geography, customer, and/or products; however, the exercise is particularly useful for quick observation of industry trends and, with limited effort, can shed light on the positioning of any organization—whether new or old.

When constructing a broad competitive landscape, the most important differentiating criterion to consider is the product or service the organization provides. Ask yourself, “Who else is providing the same product or service?” Sometimes the answer is “dozens of organizations spread over diverse geographies.” In that case, the leader should apply other relevant filters, such as customer and/or geography, to improve the focus. In other situations, when the product or service is very new, only a handful of other organizations worldwide may be offering the same thing. In this case, additional filters limit the solution set too much and therefore should be temporarily ignored.

When the set yielded by the first question is very large, the next two important filters are customer and geography. Specifically: Who is providing the same product or service to the same customer (but potentially in different geographies)? Who is providing the same product or service in the same place (but potentially to different customers)? And who is providing the same product or service to the same people in the same place?

The goal of this filtering exercise should be to map between ten and twenty organizations that have as many as possible of these three criteria in common. The results of the inquiry would show, in a Venn diagram, as the organizations occupying the center, overlapping space (see figure 1).

While it is important for all organizations to assess their competitive markets—and their niches within those markets—periodically, nonprofits are very often drawn to the task by a new program or innovation, or a significant perceived shift in the market. The preliminary market-mapping exercise is a useful tool at two different junctures. In the start-up phase, preliminary market mapping enables the social impact leader to rapidly assess the risk of entering a new market. In the ongoing/growth phase, preliminary market mapping allows the social impact leader to quickly glean industry trends that are useful for informing strategy and planning.

In the start-up phase, when the mapping exercise yields an empty set, meaning that there are no other organizations providing the same product or service, very high-risk conditions are indicated, because the market is either unproven or has proven so hostile that no organizations have survived. Sometimes preliminary market mapping yields a large solution set of providers already operating in the product or service space; this, too, is a high-risk scenario, because of the added pressure to convincingly differentiate the new idea and organization and to bolster the new organization against the advantages of established providers.

Whether the organization is new or established, one of the social impact leader’s first assessments in reviewing the preliminary market mapping data should be an evaluation of the speed of change in the market. Is the market stable, with a relatively unchanging set of organizations? Is the market dynamic, with organizations regularly entering and/or exiting the space? Is the market turbulent, with ongoing change in the number and composition of other organizations creating significant instability? By documenting the main competitors and comparing these data over a relevant time frame, leaders can quickly determine the speed of environmental change within their markets and how that will affect their entry strategies.

A second key assessment should be a measurement of risk, based on the number of current competitors in the space. In cases where preliminary mapping yields no relevant competitors, the social impact leader should be able to articulate how he or she will respond to that particular high-risk condition. Why would a market not have any current operators? There are several potential explanations for an empty market, including: there is no perceived opportunity; unknown external forces have eliminated previous organizations attempting to harness the opportunity; the market is so turbulent that all previous providers have exited; the opportunity is so new that no other organizations have attempted to address it. An empty market should be a warning sign, and leaders should undertake extensive due diligence to uncover the reasons for the lack of other providers. It may simply be that this is the first opportunity to implement this innovation, but often an empty market signals a high risk of failure.

Preliminary market mapping may also reveal a saturated market, in which dozens of existing organizations are providing (or attempting to provide) a similar product or service. This scenario is also very risky, because evidence of a large number of stable providers means competition will be strong, and existing providers are often able to leverage to block the threat of new entrants. In this situation, the leader will have to respond to concerns about the threat of existing providers, who usually have more resources available to “steal” or replicate a promising idea.

In general, social impact leaders should look for markets where the trade-offs between risk and opportunity are balanced. Usually these markets have dynamic conditions, with a small number of diverse players who are successfully mitigating risks while taking advantage of latent opportunities (see table 1).

Preliminary market mapping allows the social impact leader to quickly assess the potential riskiness of entering a new market. It also crafts a landscape from which it is possible to observe and track high-level industry trends. However, this perspective is usually too broad to provide relevant details about the risks and opportunities a single organization faces. In order to answer these questions, most social impact leaders will carve out a subset of the broader market and focus on a smaller number of organizations that can be compared along a specially selected, more relevant set of criteria.

Detailed Market Mapping

Having constructed a broad overview of the market, the social impact leader will next want to undertake detailed mapping by applying more specialized filters to deliberately sort organizations and clearly demonstrate differentiation. Detailed market mapping engages three key questions: (1) What characteristics describe the organization but not its competitors? (2) What characteristics describe the competitors but not the organization? (3) Which of these answers matter?

From the preliminary mapping, the leader should have a list of about twenty organizations that make up the overall market. The next step is to hone that list down to a smaller subset of approximately five to seven organizations that have sufficiently relevant, similar characteristics to indicate the direct competitive landscape.

Through this exercise, the leader presents his or her niche or difference in the context of immediate competitors, and must be able to visually demonstrate how the innovation and organization stand apart from others in the same space. At the same time, the organizations must have sufficient overlapping characteristics to show that they are in the same market. The selection of these characteristics is key to clearly and persuasively demonstrating how each organization relates to the other. This information forms a snapshot—the competitive matrix of the organization.

Selecting the best criteria to define the immediate competitive landscape and construct a competitive matrix is not a straightforward exercise. In theory, a leader could select from an almost infinite number of characteristics. On one level, the process of defining a market is highly subjective, as the leader has flexibility in selecting the defining criteria. On the other hand, incorrect selection of the criteria not only yields flawed results but also undermines the credibility of the proposition by appearing to bias the results.

In addition, the criteria selected will directly affect both the size and the composition of the resulting set. Specifically, criteria that are too broad will yield an overly large market with too many undifferentiated competitors, whereas criteria that are too narrow will yield an overly small market with too few competitors. Likewise, criteria that are too broad will not usefully distinguish the niche, while criteria that are too narrow will not set it in the context of relevant substitutes. The social impact leader must find a delicate balance in which the selected criteria are sufficiently informative to support meaningful analysis without contriving the results. In sum, the leader should select criteria that present a robust and seemingly unbiased perspective on the position of the innovation and the organization while also focusing on criteria that clearly demonstrate the strengths and differentiators.

How can a social impact leader select the best characteristics with which to construct the direct competitive landscape? To start, the leader should brainstorm a list of all of the characteristics that he or she feels distinguish the organization and the idea. These characteristics may be internal to the organization, such as the new product/service offered or the mission, or they may be external advantages, such as a key strategic relationship or access to a new geographical area (see table 2).

Most organizations tend to focus heavily on the differentiating criteria of the new product or service. However, sometimes that perspective can be too narrow and may overlook important differentiators that are independent of the new product or service. For example, what is the organization’s mission? Does it differentiate itself with B Corp certification or other commitments that set it apart from other providers in the space? Differentiation can take many forms, and a leader needs to explore them all.

Above all, the social impact leader should select characteristics that highlight the proposed innovation. For example, is the product or service entirely new or the provision of an existing product or service to a new customer? Is it a new distribution channel or a new combination of services? Is this the first time a nonprofit organization is providing the service? Is this the first time the product or service is being offered to a new target customer? Is the product or service being offered at a new, lower price?

With the initial brainstorm list done, the social impact leader should begin to sort the characteristics in order of importance. With the list honed down to no more than twenty defining characteristics, the leader should then compare those characteristics to the ten organizations identified in the preliminary market mapping and consider which of those organizations share the greatest number of characteristics with the new organization. Generally, as one applies more characteristics to the filter, the number of organizations with common characteristics can be reduced (see table 3).

Ultimately, the social impact leader should narrow the list to the top five to seven organizations with the most relevant traits in common. Sometimes this set is obvious, but other times there is more art involved in selecting the right list. For example, many leaders focus too heavily on organizations that share the same geography, when it may be more relevant to include organizations with a similar product or service in another geography.

In reality, the list of the most important differentiating characteristics is a best guess, particularly for start-up organizations, and the social impact leader will have to hone the list over time. Not only will an organization evolve and change its position in the market but also many leaders may not initially fully understand the strengths and differentiating characteristics of their own innovations. Only after launching an organization and interpreting significant feedback from the customer will the leader be able to refine his or her list of criteria and competitors. As a result, social impact leaders should expect to continually refine the list of criteria that distinguish their organizations as well as the list of direct competitors.

Once the leader has identified the three to five organizations and five to seven characteristics that best compare and contrast with his or her organization, the next step is to assemble that information into a useful visual snapshot—the competitive analysis matrix.

Competitive Analysis Matrix

The competitive analysis matrix is a simple tool that conveys an instant snapshot of how an organization is positioned relative to its immediate competitors. The format of the matrix is straightforward, with a list of the three to five most relevant competitors on the vertical axis and a list of the five to seven key comparative traits along the horizontal one. For each trait of the organization, a check is entered in the box, creating a view of the organization’s key distinguishing characteristics. The ideal comparative analysis matrix demonstrates sufficient overlap to convincingly show that the organizations are within a similar market while also clearly illustrating the strength and competitive advantage of the new organization (see table 4).

Example: Blue Avocado

Blue Avocado is a social purpose business that launched a reusable shopping bag system targeted toward women who want to reduce their carbon footprint without sacrificing convenience or style. At the highest level, the space in which Blue Avocado was launching was the “reusable shopping bag” market; however, this framing is too broad for a relevant competitive analysis and does not usefully reflect the niche in which Blue Avocado operates. As a result, the founders opted to reframe their market with narrower criteria, selecting the following characteristics with which to compare their innovation: whether the bag was part of an integrated system; the stylishness of the product; the degrees of functionality and portability; and price. From here, the founders were able to shrink their competitive analysis to a subset of four key competitors and five distinguishing criteria (see table 5).

From this competitive analysis, we can see that, though several of the competitive products share overlapping traits with the Blue Avocado system, Blue Avocado is the only one to have all the characteristics. This convincingly shows how the product is similar to others in the market while also demonstrating what makes it different. At the same time, the inclusion of price in the assessment indicates that Blue Avocado is pricing its product substantially above that of its nearest competitor. A quick glance at Blue Avocado’s competitive matrix raises the immediate question of whether the combination of these specific traits will merit a more than 30 percent increase in price for the product. Will customers value this combination that much? By positioning their competitive analysis in this way, the Blue Avocado founders are arguing that, yes, their price increase is justified.

In fact, after two years in the market, they discovered that the price point of $50 was too high to achieve the scale they desired, so they introduced additional product lines at lower price points. This discovery was an important insight into their innovation, resulting in product modifications that strengthened their business and enabled them to reach more people. The risk associated with their high price point was clearly demonstrated in the competitive analysis, and fortunately, because they were aware of the potential for challenges in that area, the founders were able to respond quickly with alternative products.

There is no single correct competitive analysis matrix. In fact, the social impact leader may wish to construct multiple, varied competitive analysis matrices for different audiences. For example, one matrix may focus predominantly on the product space, illustrating how the new product is differentiated from other similar ones. Another matrix may focus on a common geography, and the compared organizations may not have much overlap on product or service but may all be serving the same or similar customers within a community.

Example: Online-Giving Start-Up

If a social impact leader wanted to enter the online-giving space with a new service called, say, GiveGreat, a competitive analysis would reveal a crowded field, but one where a focus on impact measurement, working with young donors and seeking small gifts, might find a place. Of course, there would be some challenges to constructing the matrix, since some of the information about competitors might be proprietary and hard to obtain. But an initial mapping would still help to define the lay of the land and the possibility for a successful new entry.

Again, the choice of the key characteristics will prove critical. If GiveGreat gets this wrong, the entire exercise will be compromised. Thus, if it turns out that administrative overhead is a critical consideration for donors looking at online-giving options, omitting this characteristic from the competitive analysis will be a serious mistake and lead to false conclusions about the merits of the innovation or enterprise. Taking time to get the characteristics right may involve talking to users and doing market research before setting the terms of the competitive analysis. In this hypothetical case, the market looks primed for a youth-oriented and small-scale giving option (see table 6).

Interpreting the Competitive Matrix

The most important function of the competitive matrix is to quickly convey how the new organization fits into its market and distinguishes itself. All organizations (including nonprofits) must be able to demonstrate how they are different and better than their competition. At the same time, as described earlier, the degree of differentiation is also an important indicator of risk: organizations that are not clearly and convincingly differentiated are at higher risk of failure.

Social impact leaders should always use competitive analysis to inform the honing and development of their innovations. For each instance, when a direct competitor possesses a characteristic that the organization in question does not, leaders should carefully evaluate the importance of that distinction. Specifically, they should ask themselves, “Is that characteristic a strategic advantage for the other organization?” If it is not, leaders should be prepared to articulate why. If it is, leaders must begin to plan how they will address that distinction. Does the leader’s organization have other advantages that neutralize this threat or should a similar advantage be sought through either adoption or collaboration?

Similarly, social impact leaders should also be alert to instances in which all their direct competitors have a similar characteristic that their organization lacks. For example, if all of the competitors are using a similar distribution strategy for a product or service, this may indicate that this strategy is the only viable option, for pricing, regulatory, or other reasons. Leaders wishing to deploy entirely unique strategies should be sure to understand clearly why all the other competitors share a common approach and how deviating from the group may or may not be helpful. In the case of Blue Avocado, the competitive analysis underscored that its price point was significantly higher than that of other immediate competitors, and that it was deviating from the general trend of the group. It was hoping to prove that its innovation—combining the traits of a bag system with high style, functionality, and portability—was both substantial and valued enough by customers to warrant such a price increase. In the end, the analysis demonstrated that while the innovation was valued sufficiently by some customers, this was not enough on which to build a sustainable business model—so Blue Avocado quickly adapted and created new products at lower price points.

In some cases, an organization can immediately incorporate the insights gleaned from competitive analysis into the proposed product or service. At other times, as in the case of Blue Avocado, an organization must carefully note potential risks or modifications and then activate the product or service only if the market affirms the hypothesis. Sometimes, a leader may find it difficult or impossible to adapt the innovation, even though the competitive analysis clearly demonstrates the need for it. For example, competitive analysis may clearly indicate the benefit of a key partnership or financial investment, but due to multiple potential constraints (for example, being too small, not having enough money, and so on), the leader may be unable to incorporate the new ideas into the original innovation. Here is where competitive analysis begins to inform competitive strategy: the leader must determine whether it will be most advantageous to function competitively or collaboratively with the other organizations in the competitive landscape and how to use competition and alliances as complements and substitutes to the innovation.

• • •

Competitive analysis has three primary objectives. The first is to gauge the risk associated with conditions in the current market and the likelihood of success. The second is to uncover important insights into the quality and viability of an organization’s innovation(s). The third is to make use of the conclusions derived from the first two to develop an organizational strategy that maximizes impact. Other, secondary insights are often derived from competitive analysis, including industry trends from preliminary market mapping, clear identification and articulation of the organization’s differentiation and competitive advantage, and a detailed mapping of the organization’s position relative to its immediate competition.

Social impact can no longer be pursued without knowledge of competitors and what they offer. Organizations must understand the competitive environment as a first step in building, positioning, and growing in the turbulent waters of social innovation and impact.

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Nonprofits and Their Buildings: Buying as a Gentrification Hedge

From the Self Help Graphics website.

March 12, 2018; Next City

As nonprofits grow or decide to scale up, they often face significant decisions about their physical space, including whether to buy or keep renting. NPQ has looked at this conundrum many times, and one of the most critical questions to be answered is about budget size and the amount of slack within the budget. Buildings impose fixed costs within your budget structure, and those can sometimes crowd out program and budget flexibility. Often, this is too great a risk, unless the building has an undeniable mission-centered rationale, which in this case it does.

With all those considerations, Self Help Graphics & Art decided to commit to a permanent address. Forty-eight years ago, the little arts group was started in a garage on the east side of Los Angeles by a Franciscan nun, Sister Karen Boccalero. She provided job training in silk screening and a platform for Latinx artists. Today, the organization’s mission statement states it’s meant “to drive the creation of new work by Chicano and Latino artists [sic] through fine art printmaking and multiple visual art forms.”

Boccalero and printmakers Carlos Bueno, Antonio Ibañez, and Frank Hernández, among other artists, started the programs in 1970 with a used printing press behind the nuns’ home. They moved three years later to a space donated by the Order of the Sisters of St. Francis in Boyle Heights. The archdiocese sold that property in 2011, and the nonprofit moved again and had to pay rent. They have moved three times since that garage beginning.

There was another point to consider in the rent-or-buy decision; The Boyle Heights community is currently concerned that gentrification is pushing up costs in the mostly residential neighborhood. Betty Avila, the group’s co-director, says, “We already have some pretty clear roots in this location. Do we want to up and move the organization? What does that move mean for a community that’s had so many instances of displacement already?”

The organization’s revenue for the fiscal year July 1, 2015, through June 30, 2016 was $479,562. For the last ten years, the total revenue was $4,024,304, with an average of $365,846. That income has paid for programs and overhead, but there is no room for a mortgage on a southern California property.

In 2014, Self Help Graphics & Art approached the City Council and the Board of Supervisors with a plan to purchase space, hoping for financial backing and, with it, public support for the location. Los Angeles appraised the property, owned by the state of California, at $3.625 million. The nonprofit must have made a strong case, Councilman José Huizar, and Los Angeles County Board of Supervisors (under Supervisor Hilda Solis) voted in late 2017 to help the nonprofit purchase the building with a combined $1.28 million commitment.

Self Help secured $2.8 million to invest in the purchase through a $2.05 million loan from the California Community Foundation and a $250,000 loan from the Weingart Foundation, as well as two $250,000 grants from the California Community Foundation and former board member Zac Guevarra.

The $825,000 from the city comes from excess bond proceeds and brings funds raised to the full appraisal price of $3.625 million. The county’s contribution will go toward renovating the building and buying new equipment.

“We felt it was an important win for the community,” says Avila of the city and county support.

Now others can share the experience of past program participants like Arleny Vargas. She first attended a self-defense class before her junior year in Wellesley College and has taken a five-week workshop—Soy Artista, Spanish for “I’m an Artist”—that includes photography as well as stencil and silkscreen printing. The first in her family to attend college, Vargas is now a senior, working on a career in photography.

The organization assists the community in other ways. The printers used their skills to produce materials for the Women’s March in 2017 and, this past September, placed a miniature printing station in the parking lot to make posters in English and Spanish to provide instructions for anyone stopped by Immigration and Customs Enforcement agents after DACA (Deferred Action for Childhood Arrivals) was threatened.

An organization that becomes a part of a neighborhood just might choose to buy their space so they will be there tomorrow. but we sincerely hope it has scheduled in a healthy reserve for building maintenance.—Marian Conway

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In Columbus Suburb, a Nonprofit Arthouse Cinema Thrives

By Ben Larrimer (Amature_Digital) [CC BY-SA 2.5], via Wikimedia Commons

March 19, 2018; Columbus CEO

In Bexley, Ohio, a small suburb bordered on its west by Columbus, “The Drexel Theatre is part of a movement breathing new life into art house cinemas,” writes Melissa Kossler Dutton in Columbus CEO. Established in 2009 by community leaders and arts patrons, Friends of the Drexel “is an independent, not-for-profit organization dedicated to a creative and prosperous future for the Drexel Theatre.” The nonprofit employs two full-time staff, 13 part-time staff, and had a 2017 operating budget of $744,100, Dutton reports.

“It’s a pretty interesting moment for independent, arthouse theaters,” says Stephanie Silverman, who is identified as a “provisional board member” of the national nonprofit Art House Convergence and also is executive director of the Belcourt theater in Nashville, Tennessee. “The independents have gotten the wind behind them.”

When Art House Convergence began in 2008 as a spinoff from Utah’s Sundance Festival, its inaugural conference attracted only 25 attendees. Ten years later, the conference attracted “over 630 exhibitors, film festivals, and allied organizations.” In 2011, NPQ noted that, “75 percent of the attendees [at the conference] are likely to be nonprofits.” Russ Collins, who continues to direct the nonprofit Michigan Theater Foundation in Ann Arbor, said, “I thought it’s kind of silly that the primary model for an arthouse cinema is a commercial model. There’s a model for a community arts organization that is already quite successful.” In 2012, NPQ profiled the art house cinema scene in San Francisco, pointing out that “the Roxie Theater has become a nonprofit so that it can recruit members, hold benefits, and apply for grants.”

For her part, Silverman notes that the key to the revival of arthouse cinema came about “when independent cinemas started thinking like cultural institutions rather than traditional movie theater.”

Meanwhile, in Bexley, the Drexel Theatre is doing well. “I’m not worried about the small arthouse theater,” says Kevin Rouch, theater director at the Drexel. “They’re in a better place today than they were 20 years ago.”

Rouch adds that for most theaters, transitioning to a nonprofit came naturally as they already saw themselves as mission-oriented institutions. Nonprofit status allows the Drexel to concentrate on curating high-quality movies and developing programming designed to enhance the cultural scene, Rouch adds.

One priority of Friends of the Drexel has been to raise funds to upgrade the 81-year-old theater. “To date, the group has spent $2.5 million on building improvements, including a new roof, a restored marquee and renovated restrooms and screening rooms. The theater also converted to digital projection and sound,” notes Dutton.

With the renovations behind them, Dutton adds that the organization is “eager to focus on finding films and organizing events that will fulfill its mission of creating a vibrant community through unique arts content.” Judy Fisher, who chairs the Friends board, says educational opportunities will be a key component.

Dutton adds,

The theater also plans on adding a Japanese mini-festival, more family programming and finding new opportunities to screen classic films, Rouch says. The theater—which hosts a Capital University film class, provides space for fundraisers and regularly screens films for local schools—wants to find ways to use its unique venue to serve community groups, he says.

“Our asset is our screens,” Rouch says. “The more we can use them, the better.”—Steve Dubb

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Money or Mission? The Fight about Big Tobacco’s Philanthropy

By Lindsay Fox from Newport beach, United States (Cigarette Butt) [CC BY 2.0], via Wikimedia Commons

March 15, 2018; Devex

Labor advocates had big hopes for the 332nd session of the International Labour Organization’s meeting this week, but once again, the organization postponed a vote on whether to end its relationship with tobacco companies. Torn between money and mission, which group of stakeholders will the ILO choose?

The ILO is under pressure from two opposing sides. Tobacco companies provide funding for social projects, such as programs to end child labor. Devex reported in November that “the tobacco industry currently funds two ILO programs, amounting to roughly $15 million.” The companies have a strong interest in this relationship because of the credibility it lends to their CSR efforts and the boost it gives to their image. NPQ has covered how nefarious actors often use charity to cloak their misdeeds, and Big Tobacco has been trying for several years to engage with philanthropic and human rights groups.

On the other side of this stakeholder equation are the workers the ILO was created to serve. Their mission claims they are “devoted to promoting social justice and internationally recognized human and labor rights,” particularly through advancing the Decent Work Agenda. These workers are not being served by Big Tobacco despite the industry’s efforts to convince the public otherwise. The International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF) noted “that the tobacco growing sector is characterized by poor working conditions, exploitation of workers and abuse of their rights, especially their right to join a trade union.”

In anticipation of this ILO vote, more than 200 organizations joined the Framework Convention for Tobacco Control (FCTC) calling for the ILO to end its partnership.

Multiple reports have documented that abusive contracting arrangements…lock tobacco farmers and their families in generational cycles of poverty and indebtedness. Paired with well documented price fixing by major tobacco multinationals, a picture emerges of a deliberately planned and well-orchestrated strategy by a US$700 billion industry to boost its profits off decreasing leaf prices at the expense of farmers and governments in Global South countries…the tobacco industry has derived nearly twenty times more in economic benefit from unpaid child labor in Malawi alone than it spent on all its social programming.

The UN has declared that “Engagement with the tobacco industry is contrary to the United Nations system’s objectives, fundamental principles and values,” a result of both Big Tobacco’s business practices and the health risks of its product. Jaime Arcila, Latin America organizer with Corporate Accountability’s tobacco campaign, told Ghana News Online, “The ILO is one of the last avenues of Big Tobacco’s influence into the UN.”

At the ILO convening, advocates were concerned about “behind-the-scenes compromises between workers and employers.” That was what happened in November; discussion deadlocked when several African nations and the United States expressed support for an alternative proposal that called for the ILO to retain its relationship with big tobacco and reexamine its policies for alignment with UN recommendations. Japan Tobacco International and the industry-funded Eliminating Child Labour in Tobacco Growing Foundation expressed support for ILO’s postponement of a final decision.

The letter from over 200 individuals and organizations pointed out that “The ILO risks tarnishing its reputation and the effectiveness of its work if it chooses to continue these partnerships with the tobacco industry.” Of course, they are absolutely correct; the conflict of interest here is plain.

NPQ has previously urged organizations to consider risk as a strategy. In this case, by failing to take a stand that risks their funding, the ILO instead risks their credibility, their fidelity to their mission, and their workers’ welfare. In this situation, failing to choose is itself a choice, and not one likely to help tobacco growers worldwide.—Erin Rubin

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News Outlet “Indian Country Today” Reopens under Nonprofit Ownership

news,” by Kenny Cole

February 28, 2018; Indian Country Today

Indian Country Today, which had shut down last September, is back in business. Last month, the media outlet reports, ownership was transferred from the Oneida Indian Nation in New York, which had operated the paper since 1998, to the National Congress of American Indians (NCAI), a Washington, DC-based nonprofit that has advocated on behalf of American Indians since 1944.

When NPQ profiled the shutdown of the paper last September, we noted that, according to publisher Ray Halbritter, the publication was “taking a hiatus to consider alternative business models.” At the time, it was not clear if the “hiatus” would indeed be temporary or was a euphemism for permanent closure. We are heartened that it has proven to be the former.

It’s no surprise that the “alternative business model” selected has turned out to be a nonprofit-based one. NPQ has written regularly on the rising tide of nonprofit journalism. Last month, in one article on that trend, we quoted Ground Truth Project CEO Charles Sennott, who stated that after 30 years in the news business, it was his belief that “the nonprofit model is the best way to do mission-driven, in-depth journalism at all levels.”

That said, the task that Indian Country Today and its new owner face is not easy. Last September, former op-ed editor Raymond Cook estimated that “an annual investment of $2.5 million to $3 million until 2021” would be required to fully rebuild the publication.

The new Indian Country Today editorial team is led by Mark Trahant (Shoshone-Bannock), who will serve as editor, and Vincent Schilling (Akwesasne Mohawk), who is associate editor. Indian Country Today indicates that it will begin by “publishing lightly,” but expects to shift to a new web platform and staff up in the spring.

Trahant is a well-known journalist. He publishes the Trahant Reports blog, is a former editor at the Seattle Post-Intelligencer, and teaches journalism at the University of North Dakota. Trahant will be at Indian County Today full time once the spring semester ends. He is also a former president of the Native American Journalists Association and was elected a fellow of the American Academy of Arts and Sciences last fall. Schilling, who is associate editor, brings 10 years of experience with Indian Country Today. Schilling also cohosts the weekly radio program Native Trailblazers and has contributed to many other publications, both in the mainstream media and in Indian Country. Schilling is also the author of four books about American Indians.

Indian County Today, seeks, Trahant says, to “be partners, not competitors, with tribal newspapers, public media, and web publishers.” As NPQ noted last year, while Indian County Today has had its critics—including founder Tim Giago, who started the publication in 1991 before selling it to the Oneida in 1998—there is no question as to its importance; last August, the publication received 30 awards from the Native American Journalists Association.

Already, in its first two weeks, the revived publication has begun to deliver on its mission, as Trahant puts it, of delivering “professional, straight reporting that tells stories about Indigenous people and our nations.” Topics covered in the first two weeks of the reopened publication include the struggle for salmon habitat preservation in Alaska, stories about sexual misconduct allegations regarding famed Spokane-Coeur d’Alene author Sherman Alexie, a call by American Indian state legislators to create a task force to “address the endemic crisis of missing and murdered Native women in Minnesota,” leadership challenges at the federal Indian Health Service, and coverage of the campaigns of eleven American Indian candidates for Congress.

Trahant has been teaching journalism for the past seven years, and, as he tells his students, “This is a time of great opportunity. The digital world means that we can reach our audiences instantly. We can communicate ideas. We can explain a complicated process. We can expose wrongdoing. Or write a story of pop culture that makes us smile. We can invent a new kind of news organization, one built on the currency of imagination.”—Steve Dubb

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Executive Succession: Should a Leader Be Central to a Succession Process?

Relay Race batons,” US Army Europe

March 14, 2018; JTA and Jewish News Syndicate

Executive transition is rarely easy for an organization, whether for-profit or nonprofit, and it’s even more difficult when the leader is a “star.” Last month, the Jewish Telegraphic Agency reported that the lay chair of the Conference of Presidents of Major American Jewish Organizations, Stephen Greenberg, had announced that its longtime top professional officer, Malcolm Hoenlein, was planning to step down and “was timing the move to coincide with the search for a new chairman.”

Hoenlein’s 30-plus-year tenure and his great success in building the effectiveness of the organization sets the stage for a challenging period.

Few Jewish leaders have had as much influence over a longer time than Hoenlein, whose group is a coalition of more than 50 Jewish organizations from across the ideological spectrum…While volunteer chairs are selected every two years, Hoenlein is a constant presence and is perceived as a key interlocutor between political leaders and the Jewish community.

Greenberg told the organization’s members that “while Malcolm continues to be a uniquely vital and energetic leader, and an irreplaceable asset, he felt that a transition process should be put in place. Specifically, Malcolm will continue to serve the Conference as he has so effectively for more than three decades, as we seek an executive to assume responsibility for the Conference’s ongoing operations and activities. Malcolm will then focus on external relations as well as plans to structure the Conference for the years ahead.”

With leadership transition now on the table, the Conference faces some important questions. With a professional leader of this stature, who should initiate and manage succession and transition planning? Is this an opportunity to step back and rethink the organization’s mission, strategy, and structure? If it is, how involved should the retiring leader be in that process?

Hoenlein has a strong opinion and plans to be an integral part of the organization through and beyond his relinquishing his current role. In an interview with the Jewish News Syndicate, he said “the process of finding a new executive to handle the complexities of the position and to get a candidate approved by the diverse conference leaders could take one to two years to implement.”

I want to make sure we will have an orderly transition. I didn’t put 32 years in my life into the Conference to see it not continuing to be successful. I will remain, no matter what and I will continue to play a strong role.

This may be the most comfortable way for the Conference to go forward. It seems to provide stability and minimizes the downsides of hurt feelings and anger, but will it be the most effective in the long term? Viewpoints vary, but Thomas Gilmore, writing in NPQ, pointed out reasons why it may be important for the board to step up and take control, even asking their revered leader to step back, so they can directly deal with a new reality: “A long-tenured leader leads to atrophy of the board’s vitality and increases its dependency, especially when the leader is successful. So, when that leader leaves…a key support to the board is missing as members think about strategic shifts.”

Selecting the organization’s next leader needs to be done alongside a rebuilding of the board’s strength, and this may only be possible if they are in full control of the process. On the other hand, as Jeanne Bell and Thomas Adams recently wrote, the formula changes a lot if attention is paid to sustainable organizational leadership over the longer term. In that case, as is becoming more common, succession becomes less of an event and more a constant building of leadership capacity.

Depending on the circumstances, asking a retiring longtime leader to step back and allow the board to lead might seem risky, but it may be essential to the organization’s ability to move into its next era. How the Conference manages this task will be an interesting story to follow and learn from over the coming months.—Martin Levine

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Counteracting Denial with the Preservation of Spaces of Atrocity

March 11, 2018; New York Times

Recently, “never again” has been a rallying cry for gun control advocates in the aftermath of the Parkland, Florida high school shooting. But for decades previous, the phrase was mostly invoked to remember the Holocaust and promise to stop future genocide. How can democratic countries honor the past and prevent future atrocities? Although Germany has often been a model for confronting and addressing history, what resonates with one generation may not with the next.

As a New York Times story by reporter Katrin Bennhold relays, a new proposal in Germany seeks to combat the creep of anti-Semitism by giving young Germans a connection to the past and making history relevant for immigrants who feel excluded from the present.

Teaching history is a pillar of national identity in postwar Germany. That is why Sawsan Chebli, a Berlin state legislator with Palestinian heritage, recently came up with an idea that is radical even by the standards of a country that has dissected the horrors of its past like no other: make visits to Nazi concentration camps mandatory—for everyone.

It’s a timely endeavor. The far-right Alternative for Germany political party recently became the country’s third-largest, and in nearby Poland, a new law that prohibits accusations of Polish involvement in the Holocaust drew worldwide condemnation.

The Times story chronicles the visit of one class of students to the Sachsenhausen concentration camp and their subsequent interactions with its history, illustrating the power of place-based education.

One anecdote in particular connected the Holocaust to modern-day tragedies:

Recently, a young Syrian had asked a fellow guide, “Why do you turn your torture chambers into a museum?”

To make sure we will never have torture chambers again, he had replied.

The boy had thought this over for a while. “We have torture chambers in Syria,” he eventually said. “Maybe, when the war is over, we should turn them into a museum, too.”

Meanwhile, back in America, future generations may not have the opportunity to visit a piece of the past under President Donald Trump’s proposed 2019 budget, according to NBC News. The new budget “declines to request funding” for the Japanese American Confinement Sites grant program, which has provided more than $21 million since 2006 for research and preservation of World War II-era incarceration camps across the US where, in a dark period of racism and xenophobia, more than 100,000 Japanese migrants and Japanese American citizens were essentially imprisoned.

David Inoue—executive director of the nonprofit Japanese American Citizens League (JACL), a civil rights organization formed in 1929 by multiple Japanese-American groups—said that if approved by Congress, the loss of funding would be coming at a critical time.

A lot of it goes into preserving the stories of people who were incarcerated, and a lot of those people are dying right now,” he said. “So that’s why it’s imperative that we do keep funding going. There’s always the possibility that we could restart funding in a year if it’s cut this year, but the problem is how many possible people whose stories haven’t been preserved will have been lost in that one year?”

Supporters argue that it’s necessary for Americans and the rest of the world to see the physical places where the atrocities took place.

Samuel Mihara, who spent three years behind barbed wire at Heart Mountain starting in 1942 when he was just 9 years old, agreed.

“It’s the physical presence of Heart Mountain that reminds people that this is for real—it really happened, right here,” said Mihara, now a board member of the Heart Mountain Wyoming Foundation. “You need to have a facility where people can go and see, touch and feel—and therefore remember.”

The actions—and inaction—of today’s leaders underline his point, especially in the current climate of xenophobia fanned by President Trump’s refugee policies. Even in 2015, one American mayor infamously referenced the Japanese internment camps as a model for dealing with Syrian refugees.

To stop genocides and other atrocities from happening ever again, it’s imperative to preserve the physical places and spaces that are a part of the story. As Holocaust survivor and Congressman Tom Lantos reminds us, “The veneer of civilization is paper thin. We are its guardians and we can never rest.”—Anna Berry

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What an Equity Lens in Health Philanthropy Requires

lenses” by Robert Couse-Baker

March 15, 2018; Health Affairs Blog

A new report finds that, broadly speaking, health legacy foundations “are expanding the scope of their grant making and initiatives to focus on the social determinants of health…[seeking] to impact a broad range of social and economic conditions, including housing, transportation, education, child care, job training, and economic development” write Douglas Easterling and Laura McDuffee in Health Affairs Blog.

But while addressing such social determinants of health is now common, as Easterling and McDuffee of the Wake Forest School of Medicine emphasize in their 42-page report—which surveyed 33 foundations in 25 states and was released last week—not all foundations take the same approach.

Among the 33 foundations surveyed, Easterling and McDuffee note that four foundations “positioned themselves as ‘health equity’ funders” and another eight “speak of health equity within their philosophy and strategies.” As for the other 21, these “aim to enhance the overall [emphasis in original] health of the communities they serve.” The risk of a such an approach, Easterling and McDuffee point out, is that, “Even if a foundation succeeds in improving the health status of a population, this might leave important disparities in place.”

Here, it is worth recalling just how large the disparities are. According to the Robert Wood Johnson Foundation, in metro New Orleans, for example, life expectancy can range from 55 years to 80 years depending on where you live. In Fresno, California, an eight-mile distance results a nine-year difference in life expectancy. The Center for Society and Health at Virginia Commonwealth University has developed similar maps for another 21 metropolitan regions.

The importance of health legacy foundations is great. According to Easterling and McDuffee, with notable exceptions like the Robert Wood Johnson Foundation and the Kresge Foundation, health legacy foundations make most of the grants that address the social drivers of poor health.

Grantmakers in Health (GIH) estimates that there are at least 242 health legacy foundations in the United States. These are created, Easterling and McDuffee note, when a nonprofit health organization creates a for-profit company. In such cases, the federal government requires that a percentage of assets remain in the nonprofit sector, typically in foundation form. In the states of California, Colorado, Missouri, Texas, and Washington, health legacy foundations have amassed more than $1 billion in assets. Typically, these foundations have missions that involve “improving the health of a particular community, region, or state,” observe Easterling and McDuffee.

As for grants, Easterling and McDuffee identify eight primary areas: 1) community building, 2) education, 3) parenting and early childhood, 4) economic well-being, 5) built environment, 6) housing, 7) community safety, and 8) transportation.

In addition to grants, many health legacy foundations have sought to address social drivers of health through low-interest loans (program-related investments), capacity building initiatives, and policy change.

For instance, the Colorado Health Foundation, in Denver used a “program-related investment to the Colorado Coalition for the Homeless (CCH) to establish a revolving housing fund…to finance affordable housing projects including the development of 500 units of permanent supportive housing for families and individuals by 2025.” The REACH Healthcare Foundation in Merriam, Kansas, has launched a Cultural Competency Initiative, in which “health and human service groups in the Kansas City region were provided with individualized technical assistance to improve their services to uninsured and underserved populations.”

Policy change is a strong area of focus, especially among larger, equity-oriented foundations like the California Endowment, the California Wellness Foundation, the Colorado Health Foundation, the Colorado Trust, and the Missouri Foundation for Health. But small foundations invest in policy, too. A small equity-oriented funder, the Con Alma Health Foundation, in Santa Fe, New Mexico, “has an endowment of only $25 million, but policy change is a core element of its strategy…The foundation also funds Amigos Bravos to organize political participation within the affected communities,” Easterling and McDuffee write. The Northwest Health Foundation, in Portland, Oregon, another equity-focused funder, “hosted a high-profile dinner with the speaker of the Oregon House of Representatives to provide an audience for a grassroots group that had previously been unable to get attention focused on its policy priorities.” The Colorado Trust, Easterling and McDuffee note, also uses a community organizing approach.

Even among foundations with an equity focus, however, “Only a few…are seeking to fundamentally shift who has social, political, and economic power,” write Easterling and McDuffee. “In contrast, the vast majority…are working within existing systems and supporting key institutions in improving the services and resources they provide.”

Health legacy foundations, note Easterling and McDuffee, should “recognize this contrast between improving existing systems versus changing the fundamental structures that organize society.” The authors ask, “How much do things need to change to substantively improve the social and economic conditions that cause people to be either healthy or unhealthy?”—Steve Dubb

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The Sector-Jumping Problem in Higher Education

mask.” Credit: plaisanter~

March 14, 2018; Inside Higher Ed

Last week, yet another for-profit institution, Bridgepoint Education, announced it would merge its two existing entities, University of the Rockies and Ashford University, into one big happy nonprofit. While there are still numerous legal and regulatory hoops with this planned merger, it is yet another example in a long list of sometimes-concerning for-profit to non-profit conversions.

While many decisions have yet to be made about the transaction, the company said Tuesday that it expects “Bridgepoint will be compensated for relinquishing its ownership rights to the new nonprofit Ashford as well as receiving compensation for negotiated services that Bridgepoint will provide under a new services agreement.”

In the area of higher education specifically, critics have often been skeptical of the real motives behind such moves:

The structures of for-profit conversions have been controversial. The Century Foundation, for example, has criticized some of those moves as being attempts by for-profit owners to escape federal regulations, which tend to be tighter on for-profits, while still reaping personal benefits from owning the colleges.

Indeed, a recent Chronicle of Higher Education post outlines seven high-profile cases of sector-jumping at various stages of flux. Just claiming a nonprofit banner, however, is not likely to automatically result in quality services, or a deregulated environment.

Over the years, Nonprofit Quarterly has drawn attention to the discrepancies in quality of care in industries where for-profits and nonprofits coexist. In addition to the field of higher education, our writers have explored conditions in nursing homes, child care centers, and fitness centers. We’ve even done entire print issues of NPQ dedicated to the often-hyped hybrid organization and even broader, featured articles on blurring the lines altogether.

Will for-profit colleges and universities continue to seek alternative statuses as they struggle against “years of aggressive government oversight, financial problems, and scathing press coverage?” It seems a trend still in full swing, and a topic that could indeed fill a whole college course curriculum!—Jeannie Fox

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Home Healthcare Program Closing for Lack of Available Staff

Help Wanted Sign 1,” Kevin McGuire

March 16, 2018; San Francisco Chronicle

A 30-year-old program providing caregivers to seniors in the South Bay is closing, citing workforce problems. Pathways Home Health and Hospice will lay off its 100, mostly per-diem, workers for that program while maintaining its other services.

NPQ has often written about the misuse of this workforce, which is largely made up of women and people of color paid a minimum wage and kept on part-time hours, which can necessitate their use of public benefits. In this case, those who might take such employment in a not-so-great job market cannot afford housing in the area.

“The whole industry is under stress,” Georgia Rock, the chief strategy officer, says. “We’ve been having increased difficulty finding caregivers over the last few years. We don’t want to be taking clients if we can’t staff the shifts.”

Dustin Harper of the Institute on Aging says, “When the Bay Area had more neighborhoods next to each other, where the lower-income population is not that far from higher-income populations, that makes the matching of those resources a little easier. As folks on the lower-income side are being pushed further and further away from core areas, it makes travel a little more difficult.”

A study by the Home Care Aide Council in Massachusetts provides a recent snapshot of the trend in this field, where Medicaid and Medicare payments tend to set the pay standards. As a reporter for the Republican reports on

The survey found that the home care workforce is almost entirely (98 percent) female. The aides generally work part-time, are middle-aged and have limited education. Close to half the workforce was born outside the US, and a similar number have other caregiving responsibilities, like caring for a child.

Almost half of home care aides work more than one job. Yet nearly 80 percent of them have household incomes of less than $40,000 a year.

The average pay reported by home care aides was $12.77 an hour. Sixty-three percent of agencies offer vacation time to full-time aides, and fewer offer vacation to part-time aides.


The report includes information about wages but does not include data on how home care agencies spend their money. The union wants agencies to report that information to the state.

“We are advocating for a number of reforms to improve transparency and oversight, including greater authority for the attorney general to investigate agencies and expanded financial reporting,” says Tim Foley, acting executive vice president at 1199SEIU United Healthcare Workers East. The union represents state-paid personal care attendants. “This report importantly highlights the great demand for homecare services and it also showcases the need for greater oversight of this growing industry—particularly when it comes to financial reporting, executive compensation and agency overhead costs.”—Ruth McCambridge

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Nonprofit Earned-Income Ventures Aren’t Rockets: Another Launchpad Failure

Recurring Rip Currents,” Peter Kaminski

Hailed as a potential game changer, ImpactUs fell apart eight months after opening even though the impact-investing intermediary had the backing of the MacArthur Foundation, Ford Foundation, Kellogg Foundation, Open Road Alliance, Enterprise Community Partners, and City First Enterprises. Another firm is picking up the pieces, so it may not be a total loss, but why did the initial effort flame out so quickly? Here, John MacIntosh advances some tenets for nonprofits to follow to give their venture activities a greater chance of success.

ImpactUs, the broker-dealer for impact investments that recently shut down less than a year after going live, may be just another casualty of the flawed theory that intermediaries are a necessary precursor to healthy markets: an exactly backwards idea that funders nevertheless find enticing, perhaps since intermediaries are cheap and easy relative to underlying markets they promise to enable.

On the other hand, ImpactUs looks to have had a lot going for it: strong funders (Ford, MacArthur, Kellogg, Enterprise, City First Enterprises, and so on), high quality issuers (e.g. Low Income Investment Fund, Coastal Enterprises, among others), an experienced management team, and enough residual value that MissionPoint Partners recently announced that it was acquiring the assets. So maybe ImpactUs was a good idea that would have succeeded—or at least taken longer to fail—had it been approached differently. And while I don’t know the details, what I do know from similar situations suggests that many nonprofit earned-income ventures (“NEIVs”)—organizations launched with a big dollop of philanthropy but then expected to “make it” on earned income—are not approached in a way that maximizes the odds of success.

A venture-backed startup works like this: An entrepreneur has an idea she is passionate about and races around to early-stage funders looking for support. Funders decide whether or not to support her based on their pre-existing enthusiasm for the general idea, their confidence in her, and the price. The financing round closes if and only if a minimum quantum amount of money can be raised. Funders join the board. Reality intervenes. Things don’t go as planned. As expected, the organization needs to raise more money. The second funding round is more attractive than the first one since, insofar as the organization has demonstrated some success, it’s now less likely to fail, and funders are closer to an exit. But it’s also less attractive since it has a higher price. The funding round clears at a price where the fear and greed of funders are balanced. Funders exit when the organization is taken public or sold to a strategic buyer. If the organization fails, funders lose all their money, but for the good ones the losses on this deal are more than offset by the profits on others.

In my experience, nonprofit earned-income ventures work more like this: A small group of like-minded funders (or nonprofits) decide that a given organization should exist. They hire a consultant to confirm/inform their view. Initial grant funding is scraped together without an explicit all-or-nothing minimum, although it’s usually sufficient to support the organization until break-even according to “the plan.” Some initial funders believe “the plan” will work as expected. Others have supported the organization largely because their peers have asked. There is a vague belief that new funders can be found in the future, though it’s unclear who these might be or how they would decide whether or not to participate. Consultants or staff from the funder(s) provide operational support to the new entity until a full-time leader can be found. Things don’t go as planned. The organization needs to raise additional funds but struggles to attract new funders, who see little reason to participate given that they have not been “in” from the start. Other would-be funders truly like the idea but see no compelling reason to support it financially. Some initial funders balk at putting more money up. Others are happy to participate but reluctant to do more than their share. The organization limps along, restructures, or fizzles out.

This NEIV model violates five core tenets of startup funding:

  1. Without an entrepreneur, you have nothing. Entrepreneurs who can act confidently in unproven areas, overcome resistance and get things done are very rare. A plan with without an entrepreneur is worthless. True entrepreneurs are reluctant to pursue other peoples’ plans. The role of the entrepreneur cannot be outsourced. Consultants bring a theoretical and/or activity-based mindset that is antithetical to the skills required to run a startup. An idea that funders dream up yet no credible entrepreneur wants to take on is a bad idea.
  2. The entrepreneur is at the top of the epistemic hierarchy. Entrepreneurs have the most relevant knowledge, funders come second, and consultants—other than in very narrow areas—third. An entrepreneur who truly knows less than a funder is not backable. A funder who truly knows more than an entrepreneur should change jobs.
  3. Don’t raise any money unless you can raise enough money. The initial funding must give the organization enough time to learn something definitive: either something allowing additional funding to be raised with reasonable certainty or so sufficiently damning that funders can confidently “pull the plug.” It is much harder to know what this “something” is in the nonprofit world of multiple, often incommensurate, programmatic outcomes than in the for-profit world where long-term outcomes—sales, profit, return on invested capital, cash flow—are in general agreed and more easily quantified. The second round of grants is always much harder to raise than first. The cool kids always want to go first. Grants are not driven by fear or greed, though impatience and boredom affect us all. There is no ability to change the price or other terms to entice participation, and nonparticipating funders can free-ride on participants. Nonprofit startups should be fully funded from the start with initial commitments of sufficient scale to support the organization through breakeven under all reasonable cases.
  4. Don’t expect things to go as planned. Most things will be worse (entrepreneurs are optimists), a few will be better, others will be different. Funders will have differing views of how things are going. The best way to judge is through involvement on the board and regular dialogue. A funder who believes in The Plan will be sorely disappointed. Funders must balance the inside view with the outside view.
  5. Create a workable nexus of cash and control. Decisions—often tough ones—may need to be made quickly, and in a startup, everything has cash implications. So, the organization needs a functioning nexus of cash and control. This is no problem if the people with the control and the people with the cash are the same people, or at least sit together on the board. But it’s a problem if the cash is controlled by a disparate group of foundation boards that cannot communicate and coordinate in real-time with one another or the organization.

And while NEIVs are rare, these same mistakes are often made by nonprofits starting earned-income activities—activities which, it is often hoped, will generate unrestricted income for the parent. (This is different from nonprofits deciding to differentiate the price of their service—nursing home beds, dance studies, boathouse space, math tutoring—based on ability to pay. This type of earned income is not a business; it’s a pricing strategy.)

As a general approach, this is insane. Most nonprofits have very little cash, little “monetizable” intellectual property, and staff (and funders) without much startup experience. Further, they are approaching social enterprise from the tougher direction. It’s easy to make a business more like a nonprofit (i.e., more social): increase expenses. It’s trickier to make a nonprofit more like a business. But if a nonprofit is going to start an earned income activity, they should increase the odds of success by following the tenets.

After 50-plus years of battle testing, these tenets are beyond dispute in the for-profit venture capital community. So, why aren’t they followed by most nonprofit startups? Because it’s more difficult. Social entrepreneurs may still be harder to find than their for-profit peers. Consultants do sometimes bring valuable knowledge. Committing against uncertain all-or-nothing funding is difficult given cash-out-the-door foundation grant budgets. It does seem foolish to commit never-to-be-gotten-back grants to an organization based on worst-case needs. It feels dishonest to recommend a grant based on a plan that you don’t expect will be achieved. Funders with board seats can feel uncomfortable.

But on the other hand, there are fellowships and programs that indicate that social entrepreneurs will come knocking on the door of a funder expressing an interest in finding them. The cash-out-the-door problem is solvable with DAFs or escrow agreements that allow money drawn down on an uncertain schedule to be treated as a one-time grant. Over-commitment doesn’t apply to funding made as a PRI or a recoverable grant which can be returned if it turns out that some of it is unneeded. And there is no structural conflict of interest that would prevents funders providing long-term, general operating support from taking board seats.

What does this mean? For foundations, it means advertising those areas where they are predisposed to fund startups in the hopes of finding simpatico entrepreneurs, then having startup appropriate processes to handle those that come in. For nonprofits, it means structuring earned-income initiatives as if they were independent entities, with concomitant requirements for dedicated risk-tolerant funding, leadership, governance, and the like.

Philanthropy and unrestricted net assets are the most precious forms of capital, and there are many low risk ways to put them to good use. Every flawed startup idea that squanders philanthropic capital has a high opportunity cost. So does every good idea that fails through poor execution. Startups are not for the faint of heart, and those unwilling (or able) to do them right should refrain from doing them at all.

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Pace of Business Conversions to Employee Ownership Accelerates

From the website of Porter Square Books.

March 15, 2018; The Free Press, Columbus Business First, North Bay Business Journal, and Publishers Weekly

Quick: what do a grocer in Sonoma County, California; a bookstore in Cambridge, Massachusetts; a real estate company in Columbus, Ohio; and a coffee house in Rock City, Maine have in common? Answer: all four companies are converting to worker ownership.

At NPQ, of course, we have profiled employee ownership. As we noted, “a business succession crisis that could cause millions to lose their jobs is looming.” But by transferring ownership to employees, retiring business owners are able to cash out and can defer capital gains tax if the proceeds are used to purchase stock. Meanwhile, wealth is shared more widely and employees preserve their jobs. The cases featured in the press this week show the flexibility of employee ownership, both in terms of structure and industry.


In California, Oliver’s Market operates four stores and has $175 million in annual sales. “Structurally,” writes James Dunn in the North Bay Business Journal, “owner Steve Maass is selling 43 percent of the company to employees a bit at a time,” with ownership held by a trust in an employee stock ownership plan or ESOP. This is pretty common, as it is easier to finance a “staged transaction” than to go from zero to 100-percent employee ownership overnight.

“How we pay for it is that there’s no federal or state tax,” says Maass. “Instead of paying 45 percent tax, which was our bracket, that money pays for these loans,” Maas explains. As for the rationale, Maass confesses, “I’m 72. At some point, I have to retire. I couldn’t sell to these other guys (chains). All these people…have been with me through the whole thing. I don’t need that much money. I don’t use what I have. I built my house by hand more than 40 years ago. I have been happy with the decision to create the ESOP.”


In Ohio, “The Woda Group…is now 100 percent owned by its employees,” reports Tristan Navera in Columbus Business First. Woda is also an ESOP. The company claims to be the “first developer geared toward affordable housing development to be organized as an Employee Stock Ownership Plan.” To date, Navera writes, “The company has developed, built or managed 300 affordable housing communities with 12,000 units in 15 states. It has a portfolio of $1.5 billion and, overall, 550 employees.” Revenues in 2016 were $82 million.


In Cambridge, Massachusetts, Porter Square Books’ “owners Dina Mardell and David Sandberg are selling half their stake…to their senior staff members,” writes Alex Green for Publishers Weekly.

“It’s amazing,” says marketing director Josh Cook, who has worked at the store for 13 years. Before this, Cook adds, “I didn’t even have a retirement plan.” Green elaborates on the financing approach, “Through the arrangement, the owners have loaned the group the money to buy half the store. With support from the profits of their ownership stake, the employees will contribute to an escrow-like fund that pays down the loan over the next decade. By the time Sandberg and Mardell are ready to retire…the staff will be in a position to complete the purchase of the store, acquiring the other half of it.”


In Maine, Rock City Coffee employees are forming a worker cooperative. Opened in 1992, “the locals gave us six months to last, but somehow we tapped into a community of artists, writers and musicians who really wanted a focal point to talk, read, play music and have book clubs,” says cofounder Susan Ward.

“In her early 60s,” writes Andy O’Brien in The Free Press, “Ward began to think about retirement, but she worried that if she sold the business, the new owner might not know how to run Rock City properly. If the coffee roastery was sold to one of her competitors, it would likely be shuttered and all of the jobs would be moved out of town. And if she couldn’t find a buyer, she would be forced to shut down a beloved community institution. But there was also a third option: selling it to her employees.”

“I thought, ‘Who better to run it than the people who built it? It’s the employees,’” says Ward. To become owners, the 17 of the 30 employees who have elected to buy in will each purchase a $2,500 share. O’Brien adds, “With all of the legal and accounting fees, technical assistance and business training, Ward estimates that the entire transition cost about $20,000. Having partially financed the deal, one of the advantages for Ward is that she will continue to receive an income stream. And the employees will get a share of the profits at the end of the year according to the number of hours they work.”

Ownership, O’Brien notes, is “not just about the profit sharing, but also about bringing democracy into the workplace.”

“Even someone who may be a barista who works part-time has a stake in the company and the direction it’s going to go in,” says roaster Kevin Malmstrom. Ward hopes others follow her lead: “Nobody here could have opened a business on their own, but as a group they had the power to buy a business. And as a group they have the power to move it forward.”—Steve Dubb

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A Foundation Celebrates its Grantees in Commissioned Art

Sculptor Tom Queoff was moved to create this 8-foot pigeon, representing the Milwaukee Public Museum.”

March 13, 2018; Fast Company

Giving Gallery: Community in Process, a first-of-its-kind art exhibit, commemorates the 25th anniversary of the Northwestern Mutual Foundation. Since 1992, the Northwestern Mutual Foundation has given more than $320 million, $87 million of which has been received by the 25 nonprofit partners highlighted in the exhibit. The art commissioned by the foundation debuted in mid-February and is free to the public in the Northwestern Mutual Tower and Commons for one year. The art will then travel to cities including New York, Philadelphia, Tucson, and Phoenix. Seventeen artists with Wisconsin ties completed the art funded by the Northwestern Mutual Foundation.

The artwork spans a variety of media, including an 8-foot pigeon sculpture representing the Milwaukee Public Museum, a serigraph print for Milwaukee Succeeds, and a digital slideshow capturing personal journeys of children with cancer. The purpose of the art exhibit is to inform the public about the beneficiary charities and to consequently inspire donations, volunteerism, or other forms of support.

For instance, to represent the Boys & Girls Clubs of Greater Milwaukee, artist Mutope Johnson painted a pair of children confidently crossing a busy city street while a metro bus emblazoned with the organization’s logo idles in the background. “They are completely surrounded by older adults while passing under the watchful protection of a police officer that is directing traffic and providing them safe passage,” Johnson writes in an artist’s statement. “We see the positive effects of being in a safe community environment that promotes education, leadership, and self-reliance at such a young age.”

For City Year Milwaukee, a student tutoring in the mentoring group associated with AmeriCorps, artist Della Wells created a collage featuring a red AmeriCorps jacket emblazoned with many badge-like smaller collages over overlapped drawing and cutout imagery, to represent scenes in the lives of different kids and volunteers. The work also includes cutouts of buzzwords (like “hype”) along with pictures of butterflies and other ephemera.

Ben Paynter, a senior writer at Fast Company covering social impact and the future of philanthropy, references, as does NPQ, other ways the arts have been engaged by donors to advance the missions of the nonprofit sector. For example, there is the $100 million Art for Social Justice Fund undertaken by Agnes Gund and the Ford Foundation, and Bloomberg Philanthropies’ Public Art Challenge (and here) intended to revitalize neglected communities. The Giving Gallery likewise offers the public a communal experience to discover new opportunities for engagement. This is art that can help people feel the causes it conveys.—Jim Schaffer

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What Is Going on in Lawrence, Kansas? Nonprofit CEOs Dropping Like Flies

March 15, 2018; Lawrence Journal-World

Lawrence, Kansas, has long been a town with a heightened sense of social responsibility. Still, for a city this small, the nonprofit CEOs here recently have faced an extraordinary number of calls to accountability by their boards. The most recent instance is the suspension of Heartland Community Health Center CEO Jon Stewart, who says he was “shocked and dismayed” to hear on Wednesday that he had been suspended without pay pending a forensic review of agency records.

“I look forward to the opportunity to meet with the auditors the board has engaged to review my expenditures, which they told me relate to travel expenses to a national conference on community healthcare,” Stewart’s statement, sent through his attorney Thursday, read. “I do not believe any of my actions or expenditures warrant the severe action the board has taken. Certainly, everything I have done has been disclosed.”

Stewart said the merging of Heartland and local clinic Health Care Access, which was finalized February 1st, “has created a tremendous strain on the culture of the organization,” but he did not elaborate on that in his statement.

Last October, the executive director of the Lawrence Community Shelter, Trey Meyer, was fired by the shelter’s board so they could “go in a different direction.” The year before, the president of the Lawrence Art Guild was asked to leave by members and eventually charged with felony theft, ultimately paying $1,125 in restitution. And the year before that, the mayor, who was also the executive director of food pantry Just Food, resigned his position at the nonprofit where he had embezzled thousands of dollars—a convoluted crime for which he eventually did time in federal prison. NPQ wrote about that case at the time which was notable in part for the public nature of the board’s mea culpa response.

Perhaps Lawrence’s nonprofit boards are living out a legacy of transparent and decisive vigilance in this small, hyper-responsible heartland town.—Ruth McCambridge

Disclosure: The author served as an executive director of a nonprofit in Lawrence, Kansas, more than 35 years ago.

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Environmental Nonprofit’s “Climate Kids” Lawsuit Cleared for Historic Trial

By Lorie Shaull from Washington, United States (Kids Want Climate Justice) [CC BY-SA 2.0], via Wikimedia Commons

March 9, 2018; Color Lines

The United States Ninth Circuit Court of Appeals denied the government’s latest effort to have a youth-led climate lawsuit dismissed. The plaintiffs in the case are 21 young people who claim that the government is imperiling their life, liberty, and property by failing to take action on climate change.

The young people brought their suit against the Obama administration back in August 2015, but amended the suit in early 2017 to include President Trump as a defendant. Climate scientist Dr. James Hansen is also a plaintiff in the case, joining alongside his granddaughter who is one of the youth plaintiffs.

The youth, who ranged in age from 9 to 20 years old at the time of the original filing, are represented by Our Children’s Trust, a nonprofit environmental advocacy group that is coordinating a global campaign to “secure the legal right to a healthy atmosphere and stable climate.”

Following the March 7th ruling allowing the case to proceed, Julia Olson, lead lawyer for the youth plaintiffs and chief counsel at Our Children’s Trust, told the Washington Post, “We’re looking forward to putting the federal government on trial on climate science and its dangerous fossil fuel policies.”

Kiran Oommen​, a 21-year-old plaintiff from Seattle, Washington, responded to the Court’s decision:

The question of the last few years has not been “do we have a case” but rather “how far will the federal government go to prevent justice.” We have seen that they are willing to go to many lengths to cover up their crimes and maintain the status quo, but not even the Trump administration can go far enough to escape the inevitable tide of social progress. The Ninth Circuit’s decision affirms that we are on the side of justice.

The suit was originally filed in the US District Court for the District of Oregon. In November 2016, following oral arguments in the case, US District Judge Ann Aiken ruled that the lawsuit could move forward to trial. A series of motions by the government and industry groups that formally intervened slowed progress throughout 2017.

The plaintiffs in the lawsuit are a diverse group of young people from various regions of the country threatened by climate change. One plaintiff, Jayden Foytlin, 13, lives in Rayne, Louisiana, where her home has regularly flooded since the filing of the lawsuit. In September 2016 oral arguments in the case, Foytlin explained the situation:

They called it a thousand-year flood, meaning it should only happen every thousand years or so. But in my state, Louisiana, we have had that 1000-year flood and eight 500-year floods in less than two years. A few weeks ago, I literally stepped out of bed and was up to my ankles in climate change.

“The purpose of this case is to obtain an order from a federal court requiring the United States government, including the president and specific federal agencies, to develop national plan to protect our atmosphere and stable climate system,” explained Olson when the case was first filed. “This lawsuit asks whether our government has a constitutional responsibility to leave a viable climate system for future generations.”

From the actions of the Trump administration to dismantle regulations, speed fossil fuel development, and hide information about climate science from the public, it’s pretty clear that the administration does not agree that the government has a responsibility to address climate change. When this landmark case goes to trial—likely in about six months—government lawyers are going to have a tough case to present.—Karen Kahn

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Kenny Stills Makes a Social Justice Journey in the South

Kenny Stills, from 2014 as a wide receiver for the New Orleans Saints. Photo by Brook Ward.

March 6, 2018; ESPN

Dolphins wide receiver Kenny Stills caught 58 passes for 847 yards and six touchdowns in 2017, despite a checked-out, ripped-from-the-retirement-scrapheap Jay Cutler throwing him the ball. He also knelt during the National Anthem before games, something Miami Dolphins owner Stephen Ross says will no longer happen. However, what he has been up to this offseason has been far more interesting than his on-field achievements this year.

The Southeastern region of the United States lags behind the rest of the country in a number of ways. Despite rapid growth areas like Atlanta and Charlotte, educational attainment and economic opportunity for large portions of the South still fall short. Nonprofits native to the region are working to put the Southeast in position to grow and thrive over the long run.

As the South Grows, a collaborative project from the National Committee for Responsive Philanthropy (NCRP) and Grantmakers for Southern Progress (GSP), highlights successful methods and warns of the failures of philanthropic activities in the South. The project involved interviewing more than 90 community nonprofit leaders to find the challenges, opportunities, and assets in the South. The project finds that while the region is rich in culture and leadership, it remains overlooked by funders, despite opportunities to help in several ways.

Progress toward meeting the South’s needs, as expounded upon in the series of reports, requires utilizing the South’s grassroots infrastructures that understand the rich tapestry of cultures that overlap in the region. There is a need for recognizing leaders outside of major organizations and an understanding that these leaders will need to be the one’s driving their communities toward long run prosperity.

Enter Kenny Stills, who just wrapped up a long trip through the South visiting groups and people working to fight for equality and social justice. He visited with high schoolers in Kentucky and Tennessee. He went to the Women’s March in Charlotte. His trip took him to the National Civil Rights Museum.

Last month I took a road trip through the south to see the work being done in the fight for equality and social justice. Didn’t spend much time on my phone because I wanted to be fully in the moment.

Here’s a mini-journal of the things that went down (THREAD) —

— Kenny Stills (@KSTiLLS) March 7, 2018

This should come as no surprise. Despite being bemoaned as all talk and no action by some, many players in the NFL are philanthropically active. Hardly fitting the “unpatriotic” label so often thrown around, professional athletes are working to improve their country. In this case, in a region that is overlooked by national funders, by visiting activists on the ground where they work.

Stills went on to meet with Colin Kaepernick in New Orleans to attend the Know Your Rights Camp put on by Mr. Kaepernick. At each stop of his tour he saw local leadership as evinced by the thriving activity in the area, illustrating beautifully the point that As the South Grows is making.

The organizations Stills visited are attempts to solve problems at the local level by leaders who know the areas and people. These community groups understand what the community needs better than an outsider can. All they need is the proper support.

Stills embarked on a journey that highlights the natural leadership abundant in the South. With greater publicity and increased awareness of the needs of the Southeast, nonprofits will be able to leverage social institutions for high impact philanthropy.—Sean Watterson

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