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These comments are responses to the Civic Caucus interview with

Melissa Stone, University of Minnesota Professor
April 29, 2016

Nonprofits play a significant public policy role, but face new limits today

Overview

Many nonprofit organizations in Minnesota are involved in framing public-policy issues, according to University of Minnesota Humphrey School of Public Affairs Professor Melissa Stone. She says often the articulation of an issue at the beginning of a policy initiative is done by nonprofit organizations. This was true with the domestic violence initiative, when Minnesota nonprofits, especially in Duluth, led efforts to combat domestic violence by moving to set up safe houses in the 1970s, at a time when government was nowhere around on the issue. Nonprofit organizations' role in public policy continues to be significant, she believes.

But she notes several factors that limit the ability of nonprofit organizations to play an even stronger role in public policy: the demands of funders that nonprofits focus on measuring results; the lack of activity by nonprofit boards in community education or advocacy on behalf of their beneficiaries; and the increasing belief that nonprofits should act more like businesses. She also worries that these trends are making small nonprofits more vulnerable than they have to be.

Stone questions where the shared inquiry and shared learning is among the myriad of groups trying to address an issue like the achievement gap. She sees a possible role for the Humphrey School in convening and staying with people working on an issue and helping them talk to each other about what they've learned. The School could also help people take what they've learned collectively about an issue and reframe the issue in terms of what that information means for policy. But she laments that the Humphrey School has trouble sustaining work on a single topic long enough to get any traction on it.

She suggests that the Civic Caucus look for places where it can intervene to facilitate the connections between issues and public policy results, perhaps in partnership with the Citizens League and the Humphrey School. 

For the complete interview summary see: Stone interview

Individual Responses:

David Therkelsen
I spent most of my career in the nonprofit sector, mostly in senior executive positions. I don't take much comfort in the statistic that the USA has 1.5 million nonprofits and the number is growing.

Like it or not, size and scale matters in nonprofit administration. And the very same funders who the speaker decries as over-obsessed with outcomes measurement also, often, do not want to fund infrastructure: current technology that drives efficiency, sophisticated human resources that gets and keeps the best people, training that assures the best people will be effective. In my belief and experience, it takes a certain size—at least $5 million a year in operating revenues, and probably $10 million—for a nonprofit to be able to adequately fund its own infrastructure needs.

I'd like to see fewer, bigger nonprofits. I think that's the surest path to this critical sector maximizing its impact on the larger society.

Dennis Carlson
Non-profits have played a critical role in our local communities in the northern suburbs. Alexandra House (violence against women), Youth First (teen youth programs - largely for minority students), Operation Grace (free dental care for high school students), Stepping Stone (homeless shelter), Feed My Starving Children, Second Harvest food shelves, and many others in areas like mental health, automobiles and bikes for needy families, and many youth scholarships and foundations.

I serve on the Wallin Education Partners Governing Board, which has given out nearly $40 million in student scholarships for high school seniors (about 140 every year) in the metro area. They are great scholarships amounting to $16,000 per student along with an advisor for their entire college experience. These are students that are economically disadvantaged and likely to not go to college, or very likely not to finish (generally in the 30% area of a completion rate). Our college completion success rate is 92%. We believe that our student advisors play a critical role because many of our students are the first in their family to even attempt a college degree. The Wallin Education Partners is extremely well run with great financial management and a great board. Many that I mentioned in our area struggle with funds, leadership, and consistency in management practices. This nonprofit is a great example of a organization designed to help disadvantaged students and families break the cycle of poverty and use education as a step to improve their quality of life.

My frustration, particularly in the suburbs, is that the need is great but grants and other financial support systems are hard to come by. The role of non-profits is an important one, but where there is a serious need, they tend to fall short - at least in the northern suburbs. The homeless situation would be the most extreme example. Many, many homeless families and single adults are in need of support but there is no real mechanism in place to deal with the numbers is need (students alone number over 1,000 every year). There also is no single agency or non-profit to go to for help or advice.

The achievement gap discussion is another one of those that seems almost impossible to tackle. Once you get over the idea that a "silver bullet" fix is not available you start looking at the complex set of circumstances that exist that creates this Minnesota phenomenon. Housing, jobs, property taxes and community support systems play the initial critical role. As a result - families, cities, area businesses, and counties all own a part of the social fabric that creates an environment ripe for the creation of an achievement gap. If all of that system exists successfully, working in concert with high property taxes, your school district and the students within [it] will do just fine. If that does not exist, it is an uphill climb.

Because a student needs supportive and engaged parents along with high quality staff - all with high expectations for their success. Then a strong, broad based, consistent curriculum across the district (plan in advance for the movement of families) needs to be in place. Along with that, a strong support system is needed to help students with cultural diversity, sexual identity, special education, dental and medical needs, mental health, and homeless needs. Academic counseling and career counseling are essential - starting in middle school.

I would also add that a testing system that was built for white middle class students does not serve us well with our growing diversity in the state. The test creators also ignore multiple intelligence research data and only test in core subject areas. Other areas that really help a student thrive would be many extra curricular opportunities in athletics, intramural sports, student clubs, volunteer opportunities in youth service, mentors and homework help.

An aligned system among government agencies and institutions along with strong non-profit partners is needed to navigate such a complex environment. I have seen it work well in communities and I have seen it work poorly. It is really tough to achieve in an urban area of poor housing, high unemployment, splintered families, weekly violence, and generational poverty.

There is clearly a role for higher education institutions and a division like the Humphrey School of Public Affairs. Civic Caucus could also play a mentor leadership role with such a group.

Mark Ritchie
Great interview.

Arvonne Fraser
Stone did a remarkable job of stating the problems and I also believe the Humphrey School could play a role in bringing different people together to talk about the achievement gap, for example, which does, indeed, have many causes. Talking this over would be helpful. Also, non-profits tend to shy away from political involvement, fearing they would lose funding or IRS status. If the Humphrey School takes this achievement gap or other issues on, they should include officials and party leaders or activists so they get educated on the issues and potential solutions and the non-profit world learns about the political world. In other words, the School could play a convening role.

Tom Spitznagle
Back about 20 years, during a discussion about non-profits with a good friend who served as CEO for a large Minneapolis non-profit for many years, he explained that the primary measure of success for their various social programs was the "number of people served". As a corporate type, I was astonished that there were not some more precise measurements required by funders of what the programs had actually achieved. He said that there wasn't.

Then in the early 2000's I consulted with various non-profits around the country, many federally funded. For the most part these organizations were mission focused and had little grasp, or even interest, in things like financial accountability. In the extreme, some were just there for the federal funding, employing various family members as key executives. On the other extreme were highly dedicated people making great personal sacrifices in an effort to help their communities.

Funders need to track both mission success and financial accountability in order to insure that objectives are being met. The most successful non-profits are able to do this, I believe. But they need leadership that has both social service skills and management skills. Many small non-profits do not have these resources.

Frank Schweigert
This is a very stimulating conversation that opens up important areas for discussion. However, the nonprofit world as a whole is too diverse for constructive and critical discussion. It may be more useful to distinguish among major categories that face distinct challenges and play distinct roles, e.g., health care providers and insurers, political advocacy institutes and organizations (including PACs), local social service providers, geographically based civic organizations, religious congregations, arts and cultural heritage organizations, and educators (colleges and nonprofit academies and schools).


The above categories may not be the most useful, but they begin to suggest distinct public expectations, management challenges, and governance concerns. To return to Dr. Stone's concerns: (1) careful measurement of results is essential in health care and service providers, but less so for religious congregations and perhaps civic organizations; (2) board governance must focus on compliance in organizations with highly developed management teams, in part because of the magnitude of public goods and funds at stake, while boards must play a different leadership role in smaller social service, civic, and religious organizations; (3) strong business plans are needed in all nonprofits, but the business plan and revenue model must fit the nature of the business.


We need serious discussion about governance, management, public accountabilities, and tax treatments that match the nature of the nonprofit business in question.

 

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The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Interview Group  includes persons of varying political persuasions,
reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

  John S. Adams, David Broden, Audrey Clay, Janis Clay, Pat Davies, Bill Frenzel, Paul Gilje (Executive Director), Randy Johnson, Sallie Kemper, Ted Kolderie,
Dan Loritz (Chair), Tim McDonald, Bruce Mooty, John Mooty, Jim Olson, Paul Ostrow, Wayne Popham, Dana Schroeder, Clarence Shallbetter, and Fred Zimmerman

 

 

 


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