City Lit: Groupthink

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It’s been more than a century since philanthropists like Andrew Carnegie created the first U.S. foundations whose aim was to succor the poor. What progress have we really made since then in addressing poverty’s root causes? This is the question Robert Egger poses at the outset of Begging for Change. So it’s a bit disappointing that he answers it superficially. Mainly, he urges nonprofit CEOs simply to be better administrators–and to do so by reading up on the secrets of his own success.

By all accounts, Egger has indeed been successful. His nonprofit career started in the 1980s, when he and his wife volunteered at a soup kitchen. The experience left Egger with troubling questions about how such handouts might perpetuate rather than end homelessness. Absorbed by these concerns, he left his job managing a Washington, D.C., nightclub and founded D.C. Central Kitchen. Its first act, in 1989, was to serve leftovers from George Bush Sr.’s inauguration festivities to homeless people. The Kitchen expanded and now incorporates a job training program for formerly homeless food handlers, a for-profit catering arm for the graduates of the training program, a street outreach program to recruit new trainees, and a nationwide network of similar efforts. Egger is the agency’s president.

He also recently finished a stint as president of the National Capital Area United Way. Though the board that recruited him said he was “not a CEO type,” Egger got the job, in part because he replaced someone who was–and who had misspent funds and caused a scandal. Egger made waves by demanding an $85,000 salary–ridiculously low by national standards. “Take at least $150,000,” several people discreetly told him. But, he writes, the salary cut gave him the necessary leverage to reduce the payroll, and helped restore integrity to a tarnished office.

These are changes in organizational attitude and practice, and they represent useful, if not radical, structural reforms. Egger offers examples such as the pay cut through sound bites that provoke reflection, and he uses real-world analogies that are downright entertaining (any book about nonprofits that draws inspiration from Casablanca and Iggy Pop deserves a look). To flesh out his ideas about effective management, Egger describes other nonprofits as models of similar change. He also discusses “anti-models,” whose behaviors are to be avoided.

The models are social-entrepreneurship shops–combining for-profit and nonprofit techniques to help people achieve self sufficiency. One is Greyston Bakery in Yonkers, where formerly homeless people produce fine baked goods for Manhattan restaurants, and make the brownies that go into Ben & Jerry’s ice cream. Another is Pioneer Human Services, a Seattle-based nonprofit with more than $50 million in annual revenue, where most of the 1,000 employees are former felons and drug offenders. The implication is that nonprofits that run like businesses work better than other nonprofits. But one senses these agencies show up more because Egger is familiar with them rather than because he thinks they’re the best nonprofits.

By contrast, the anti-models include a fundraising campaign that illustrates why Egger thinks nonprofits should focus critically on their mission. He describes a public service announcement sponsored by the Ad Council for America’s Second Harvest, a nonprofit that collects surplus food and distributes it to food banks. The PSA shows a little girl, with a caption explaining she is cold because mommy has to choose between buying food and paying for heat.

Egger thinks a better message would stress how America’s Second Harvest helps end hunger in the long run. His alternative reads, “Every day, Second Harvest food banks save empowerment programs across this country tens of millions of dollars so that they can focus on job training, literacy classes, and after-school programs so that families like this can live independently.” Egger’s message seems more constructive and effective in communicating the actual work of the agency.

Social entrepreneurship is more than the flavor of the month, and emphasizing solutions instead of pity can be crucial to breaking down people’s resistance to change. But, as Egger notes, Americans already donate nearly $241 billion, or, on average, $1,600 per person in the country each year.

It’s doubtful that better marketing or management can significantly increase that figure. On the other hand, nonprofits can do little to reduce the demand for the services they provide. That demand is affected by factors like unemployment and wages, educational attainment or lack thereof, and so on. How, then, might we go about creating structural, systemic change in the nonprofit sector? Maybe Egger is right. Maybe all we can do is try to be better managers.

But maybe he’s not totally correct. We could probably make changes in nonprofit practices that would be significant enough to make these organizations, as Egger puts it, “more responsive, efficient and rewarding for all.” For example, his book never examines the important fact that nonprofits are only the middlemen, yet they consistently ignore one of the most vital indicators of their efficacy: the opinions of their constituents. Though Egger is clearly sympathetic to the formerly homeless people who comprise his clientele, his book never includes their ideas for revamping nonprofits–not the one Egger runs, nor any others. Yet these clients are an integral part of the process.

Incorporating the beneficiaries into the discussion about how charity is used is a change worth begging for. We might not be able to alter the fundamental nature of the philanthropic transaction. But giving clients a voice and a stake in the deal is surely different than anything Andrew Carnegie envisioned.

Gordon Mayer is a writer and media consultant based in Chicago. He is on staff at the Alternative Schools Network, a nonprofit that helps students who have left the public education system earn their diplomas.