Some Measure of Leadership

Thursday, April 23, 2009

By Charles H. Hamilton
Senior Fellow, Philanthropy New York

On April 6th, Mayor Michael Bloomberg and his Administration showed real leadership for the nonprofit and philanthropic sector, just as they did in 2006, when they established the Center for Economic Opportunity. The Mayor made a speech at New York University, in which he announced three initiatives to help nonprofits: (1) reduce fixed costs through bulk purchasing; (2) strengthen nonprofit management through technical assistance and referrals, including a new program called Greater NY, by which business executives will volunteer their time and company resources to nonprofit executives; and (3) seek substantial reforms of the City’s contracting procedures, together with bridge loans. (Read the full press release.)

What are we to make of all of this? The Mayor’s announcement gives us an opportunity to start a candid conversation about what foundations, nonprofits, and the City (and business too) are doing during this recession and more generally.

The Mayor’s leadership shines a harsh light on the lack of leadership among foundations and nonprofits. Many foundations and nonprofits have responded well to the challenges of this recession, but the endless meetings called to “act in a more concerted way” have produced…nearly nothing. Yet, everyone still feels the need to show up for the next meeting. We need to do business in new ways if the sector is to be strengthened and its work improved. That requires leadership: real cooperation leading to concrete actions.

While the Mayor’s proposals represent progress, they struck me and others as no more than first steps, given the importance of the sector (in his speech, the Mayor noted nonprofits make up 15% of the City’s non-government workforce). For example, to what extent were the initiatives for reducing costs and strengthening nonprofit management really informed by, and coordinated with, what currently exists? And how will they be going forward? Group purchasing efforts have often proven to be inefficient. Management assistance is indeed very important, but nonprofit executives report a surfeit of offerings of varying quality, which are often “forced” upon them by foundations. Perhaps we need less “more” and more focus on coordinated, deeper, and better TA? What is the added value being proposed here and how will we know if it is successful?

The City’s inefficiencies are well-known and not particular to any Administration. The recent Nonprofit Executive Outlook Survey from Baruch College shows a significant, recent uptick in disapproval of current Administration policies and programs. The plans to reform City contracting procedures could make a significant difference and are welcome news. For instance, the Returnable Grant Fund administered by The Fund for the City of New York is slated to increase 150% from $8 million to $20 million over two years. There are also promises of further help through other lenders. These admirable steps only get to the symptom, and will prove to be pitifully small given the huge delays in public contract payments that have been a sad fixture for so many years.

Plans to expedite compliance review, standardize human services contracts, and increase openness for City contract information get closer to the nub of the issue. We have heard all of this before, of course. This Administration could make it different this time. Reforms rarely live up to the fanfare with which they are announced, but the Administration should commit to a regular “report card” to the public with specific benchmarks and a clear time-line for achieving these reforms. The real test of the Mayor’s initiatives will be how well the Administration puts its own house in order, measures it and reports its outcomes. Philanthropy should ask how we can help too.

The Mayor’s speech raises two larger issues. First, it simply isn’t clear from the proposals, and the process leading up to them, how much cooperation with nonprofits and foundations is desired. The Mayor’s comments suggest that there is a commitment to strengthening the infrastructure, efficiency, and effectiveness of New York City’s nonprofits, including the important web of community-based organizations. Questions remain about how well the Administration actually understands—and acts towards—the sector. Are nonprofits merely instrumental vendors and foundations simply occasional funding sources? New York City’s troubles and the challenges facing the poor and disadvantaged can be solved only with genuine understanding, partnerships, and actions. But we should all run screaming from the idea of yet another meeting. How, then, can we develop broader leadership that produces real concerted action?

Second, we must put these initiatives and all of these meetings in proper perspective. Action now is important (albeit slow and probably only modestly effective), but those actions are sometimes presented as if they are unique and important only now for the recession. When we look at leadership from a longer-term perspective, however, what is important now is what has always been important. We all have our lists of what that might entail: my list for foundations includes general operating support; building organizational and sector infrastructure, professional development, and board capacity; improving capitalization and cash flow; and well-defined results. Do the actions being taken now suggest a failure of leadership over the last 5, 10, 15 years? Going forward, then, let us concentrate not just on the immediate and easy, but always on what makes for good grantmaking, good government, and good management.

What do you think and why? How would you take the measure of leadership for foundations, or nonprofits, or the City? What real partnering with real actions would strengthen the effectiveness of this funny three-legged stool of nonprofits, philanthropy, and government? All of us in the Philanthropy New York community hope to hear from you.

Find More By

News type