State of the Social Sector

The Big Short- Nonprofit Edition

I read Michael Lewis’ excellent book, The Big Short this weekend while flying to and from meetings in New England.  It left me wondering how the investment banks were unwilling to wrestle with the potential risk and deficiencies perpetuated by the financial system.  I finished the book and wondered what other industry was built on a paradigm of false assumptions.  I began to scribble down the following questions for the purpose of a reality check for the social sector.

  • Is the social sector transparently designed to serve the public’s interest?
  • Do we need to design an identity statement to define the sector?  Is it ideal to have regional hospitals and national debt collection services classified in the same category as a local literacy organization?
  • Have we designed a system that is self-dependent and closed?
  • Are we feeding an insatiable fundraising monster?  Can the endless stream of gala fundraising events and annual appeals continue to sustain the sector’s many causes? 
  • Is the leadership teams (board and staff) committed to the mission?  If another organization is achieving the mission more effectively would an organization merge?  If an organization’s vision was reached, would it close the organization doors immediately (if a cure for cancer was discovered tomorrow would all the nonprofit cancer organization’s that seek a cure cease to exist)?
  • Should paid positions be capped or discounted by some percentage when benchmarked against the for-profit sector?  Does a nonprofit CEO need to demonstrate some form of sacrifice by being less-well compensated?  Or should the social sector pay a competitive wage?  What would be the impact on your community?
  • Will donors and funders dictate the social sector’s future?  Will organization’s diversify revenue source?  Will donors demand organization’s merge or pool resources?
  • Will volunteers continue to contribute their time, talent, touch and treasure to the social sector?
  • Is a revolt coming?

What questions keep you up at night?  Are there assumptions that need to be revisited?  Are we assessing risk within the social sector?  Do we have tolerance for new messages and perspectives?  Should we be more optimistic or pessimistic?

Maybe it is Just Me

Maybe it is just me but I have taken notice of the following items this week:

  • The Chronicle of Philanthropy is now posting a section announcing mergers.  For example it highlights the pending merger of three United Ways in N.H. or an agreement between a land trust and farmland conservation group in Washington State.
  • Forbes Magazine’s April 12 issue has a section dedicated to SecondActs that highlights the work of once highly compensated employees from the financial sector who have taken on a cause in the social sector, often without compensation or with a significant reduction from their previous salary.
  • His Holiness the 14th Dali Lama is using Twitter to spread his message of compassion.
  • TED held a session titled TEDxVolcano with participants from a previous conference who were stuck in London due to the suspension of air travel.  Checkout Peter Greenberg’s talk about the impact on air travel.
  • The iPhone App store is now selling applications specifically designed for nonprofit fundraising.
  • The Nonprofit Quarterly’s Newswire posted a link to a story that pondered the potential collapse of the nonprofit bubble.
  • Seth Godin’s Levy flight mathematical concept changed this blog just in a week’s time.

Change is constant.  Sometimes it is just subtle enough that I do not fully appreciate its impact until I seem the parts summarized.  A couple years ago I would have been amazed at any one of these headlines but now I take them in stride or barely notice their impact.  It is a great time to be in the social sector, despite the challenges of mergers, a recession, limited volunteers, competition, or the fear of pending doom.  The sector has more direct communication and control over its message, impact, outreach, networks, sphere of influence and fans than anytime in history.  For some causes the captain may have turned on the seat belt sign or perhaps that noise I was the wheels touching down at another great destination.  I am going to have a look around.