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- [00:00]
A
Foreign. Hi, I'm Santi Ruiz and this is Statecraft. As a reminder, the complete annotated transcript for this episode and for all of our episodes is at www.statecraft.pub. that's P U B. Today I have the pleasure of welcoming Greg Berman on the show. Greg, thanks for joining.
- [00:22]
B
Thanks for having me.
- [00:23]
A
Greg and I are going to talk about nonprofits today, non governmental organizations or NGOs in the American context. Greg's got a new book out which I have right here in front of me, called the Nonprofit Leadership through the Culture wars, which I really enjoyed. Before Greg, I ask you to outline the basic thesis of the book. I just want to give a brief background on who you are. Greg was part of the founding team responsible for creating the center for justice innovation, or CJI. He served as director of the organization for about two decades, from 2002 to 2020, helping to guide it from a startup to a org with an annual budget of more than $80 million. And Greg, you've written multiple books, mostly on reducing mass incarceration, Trial and Error and Criminal justice Reform is a title of another one of them, Good Courts the Case for Problem Solving Justice. And I'd say you've been at the center of center left or left liberal attempts to do criminal justice reform, especially in New York City over the past two decades. So Mayor Michael Bloomberg put you on the Board of correction. Mayor Bill de Blasio put you on his public safety transition team, as did Manhattan DA Cy Vance. You've served on a bunch more boards and task forces on the topic. You're also the co editor of a publication called Vital City, which I really enjoy. It's one part New York journalism, one part policy journal. So I guess first question is, Greg, do you have enough on your plate right now?
- [01:47]
B
Not as much as you do, my friend, but yes, I feel plenty busy these days. And one more thing that I would add to your list is that I also am the Distinguished Fellow of Practice at the Harry Frank Guggenheim foundation, which for the last three years has hired me to investigate various topics related to violence. And so I'm very grateful for the perch that they give me as well,
- [02:07]
A
Greg, today what I'm going to have you do is explain your diagnosis of the nonprofit sector. What's happened to nonprofits this century? What's happened to how people perceive nonprofits, whether NGOs or the bad guys, as critics from both ends of the political spectrum will argue. And as I was prepping for this conversation, I realized it may be not obvious to many Listeners of the show, why? As a kind of podcast about state capacity and governance, we're talking about non governmental organizations to kick us off. Maybe I can have you make my case for me is what's the nexus between NGOs in the modern context and governance? Like, why should people who care about governance care about how NGOs operate today?
- [02:47]
B
Sure. I would argue that places like New York City and arguably the entire United States, if you went place by place, that government really relies on nonprofits to do service delivery in a host of different domains. And so you can't really talk about things like education, things like child care, things like housing development, things like economic development without talking about the nonprofit sector. What's happened? Take it with a grain of salt. This is my potted history, and I'm not a historian. I think that the story, from my perspective is that coming out of the 60s and 70s, there was a lot of public discontent with government and feeling that government had overreached in the War on Poverty and other efforts. I think it can be debated about whether they failed or not, but that there was a public perception in many quarters that they had failed. And so government, over the past, I would say, 50 years in a place like New York, has increasingly turned to the nonprofit sector to deliver services that in many respects could be delivered by the state. And so viewed in the most positive light, I think that nonprofits are responsible for extending state capacity and improving service delivery. Increasingly, that assertion is debated. People worry that nonprofit service delivery organizations are not accountable in the same way as government agencies are. And we can talk about that if you want. But the short answer to your question, why a podcast that's primarily devoted to state capacity and the work of government should think about non governmental organizations, is that they can't function without us.
- [04:31]
A
In point of fact, there's an interesting dynamic in both directions here. I mean, we'll talk a little bit, I think, about the New York case where that, that history that you just gave is, I think, especially true. In the 60s and 70s, there was a big backlash to the government running many of these programs. And so in New York specifically, I think, even maybe paradigmatically, I mean, it happened across the country, but I think especially in New York, nonprofits came in and backfilled some of this work in partnership with the state and the city. And the flip side of that is that NGOs, I think increasingly in American life are dependent on the federal government or on state and local governments. I have a stat here in front of me that I'll cite in the show notes that about a third of the money that goes into nonprofits in America today is from the government in some form. So there's this more symbiotic relationship today than there was in the past.
- [05:23]
B
I think that's true. And I think when you talk to the general public, I think there's a lot of misconceptions, broadly speaking, about nonprofits. And first of all, I should back up and say, as we have this conversation, nonprofit is an enormous category, right?
- [05:38]
A
Totally.
- [05:39]
B
That includes everything from your local block association that has no paid staff, a budget that maybe can be counted in the thousands of dollars, all the way up to Harvard University, which has an annual budget that dwarfs many nations. And so it's a little bit hard to talk with a broad brush about nonprofits because they vary so much in scale and size and in what they do in general. What I'm talking about, what I think you're talking about are human service delivery organizations that function connected to government. And as you say, I started to say that there's a lot of misconceptions about nonprofits. I think that one of them is that they're all charities, that the people that work there are either doing it out of the goodness of their hearts and are just volunteering or making subsistence wages and that they all depend upon getting a few nickels from the Salvation army bucket. And in point of fact, at least in New York, there are incredibly sophisticated nonprofits, the management of which rivals the complexity of any business or government agency you'd want to name. And as you rightly point out, many, many of the nonprofits, and frankly, including the one that I used to lead, the center for Justice Innovation, relied primarily on government grants and government contributions rather than individual donations. So I do think that there's many misconceptions about nonprofits, but we should underline the class of nonprofits that we're talking about.
- [07:15]
A
In particular, it's a really broad class. And as you say, I think we're going to spend most of our time talking about these service delivery organizations. But just to give, I think, some more color to that point, a charter school is a nonprofit organization. My think tank, the Institute for Progress, the one I work for, is a nonprofit. We don't take money from the government or from corporations. It is all private donation. But we're an ngo, as is the Sierra Club or the Heritage foundation or the Black Lives Matter organization, or as you said, like a, a local community org is a nonprofit as well. I'll just put some of my cards on the table from the beginning because I think you and I, great Greg, have similar and overlapping takes on the nonprofit sector. But I think we, we diverge in some places, so I want to flag them for listeners as we get into this. Like you, I've spent most of my career in the nonprofit sector. I started interning for a summer at an organization called Air wars, which tracked civilian casualties from airstrikes nonpartisan org, but funded by George Soros's Open Society, among others. So very much in the kind of civil society mold of ngo. Then I worked for a while at a news outlet called the Washington Free Beacon, which is very much on the right politically that was technically a nonprofit as well, I think. I like to joke I'm one of the few people in the Venn diagram overlap of having been funded by George Soros and by right wing hedge fund manager Paul Singer. I don't, I don't know how big that class is.
- [08:41]
B
That's a badge of honor, I think.
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A
But at the Free Beacon and the kind of right wing media background that I come from, a lot of us were very critical of the role that NGOs played in American life. And I say that as somebody who's now I work at a think tank which is a nonprofit. Right now I'm on the board of a nonprofit. I ran a fellowship program for young folks in tech called Interact, which is a 501c3 organization. So you and I, I think, are both in some ways creatures of the nonprofit sector. And we have a lot of affection for the sector and a lot of critiques. So I'm going to basically have you explain how the world of nonprofits works from your perspective as a former executive with major nonprofit. And then I want to get into basically how they don't work. What's happened to nonprofits in your view, what's going on ideologically under the hood and why and where you think this sector needs to go from there. How does that sound?
- [09:34]
B
Sounds good.
- [09:35]
A
So let me start with the title of the book, the Nonprofit Crisis. I'm sure you've answered this on several podcasts before, but what is the nonprofit crisis that you're describing today in this book?
- [09:45]
B
So from my perspective, I don't know when it started, but first kind of crossed my radar screen, I would say about a decade ago. Like you, I've spent all of my professional life within the nonprofit sector and I always worked for the kinds of organizations that no one's ever heard of and that were hard to describe generally when I would go out into the world to cocktail parties or dinner parties with people I didn't know. Just as a shorthand to make life easier, I would say, you know, I'm Greg Berman, I work for a nonprofit. And up until about 2015, 2016, you could just sense that when I said that, there was kind of like, you know, a smile would come across people's face, there would be like a loosening in the atmosphere. There's this general sense of like, I may not understand anything that you do, Greg, but you must be a good guy.
- [10:38]
A
You're a do gooder.
- [10:40]
B
Yeah, exactly. Your heart must be in the right place. You must be trying to make the world a better place. And that started to erode around 2015 or 2016. When I would go out and say, I work for the nonprofit sector, all of a sudden the response was not warmth, but, you know, people looking at me side eyed or sometimes with kind of overt hostility, as you say. And so from my perspective, the, the crisis that motivated me to write this book is that I perceive there to be a significant decline in public trust and confidence in nonprofits. That's happened over the course of my career, which is almost, you know, now 40 years in the nonprofit sector. And I think that this is a kind of a slow erosion of support for the sector. And so it never has kind of come to head in a way that the sector has really had to wrap its arms around it and tried to address it, because there's always a million and one problems to deal with, many of which have taken greater urgency than this crisis of ebbing public trust. So I wrote the book to try to focus the attention of nonprofit executives and those who love nonprofits or work in nonprofits about this problem, and you could see this erosion in public trust, not just kind of anecdotally in how people react to Greg Berman as he goes out in the. You can see it in the kind of public opinion polling that places like independent sector and other agencies do. You know, nonprofits still rank higher just to hit reveal codes. The house isn't on fire. I mean, certainly people express more confidence and trust in NGOs than they do in Congress or the media.
- [12:26]
A
But that's a low bar.
- [12:27]
B
But again, that is a low bar. So basically, the numbers are just north of 50% of Americans expressing support for the nonprofit sector. And I would argue that that is, if not a red flag, certainly a yellow flag of something that nonprofits should be concerned about. And then when you pair that up with the fact that we see voluntarism down among the American public. And obviously nonprofits are the primary vehicle for voluntarism. We also see donations going down to NGOs. The dollar figure remains high, but the number of donors is going down. The number of Americans that are contributing, contributing to non profits. And I think this is a problem, because I do. And again, I may have a sunnier perspective on nonprofits than it sounds like you do. But I think that nonprofits are one of the things that is unique about the United States and uniquely great about the United States. If you travel abroad, you'll quickly see that the strength and breadth and depth of our nonprofit sector really is one of the things that distinguishes the United States from other countries. In many other places, there's the private sector and the public sector and nothing in between. And when nonprofits are functioning well, I think that they are part of the interstitial glue that ties us to get this diverse, ginormous, heterogeneous society together. And so I get very worried when I see these kind of yellow flags going up and public confidence in the sector going down. And so that's how I define the crisis. And that's what motivated me to write the book.
- [14:07]
A
I want to get into the specific critiques from the left and the right and otherwise that the nonprofit sector is getting. But before we get into perception here, say a little bit more about how the sector has changed over time, because as one of the dynamics you point out is there's fewer small dollar donations, fewer normal people donating to nonprofits, and maybe more large philanthropists. Another thing that you talk about in the book at the very beginning is there's this long thread in American life of civil society being really important. De Tocqueville talks all about this, that Americans love to organize themselves outside of business organizations. They like to do other things together. And that's as far back as the American founding, the kind of theme of American life. Later in the book, you talk about this dynamic that one political scientist has called associations without members, and another, my friend, Stephen Tallis, is called advocacy without representation. What's that change in nonprofit sector?
- [15:05]
B
I think that is a profound and generally unremarked change in American life that's happened over the past century or so. And this is kind of consistent with the argument that Robert Putnam makes in Bowling Alone, that Americans used to be great joiners. And the title of his book comes from a focus on bowling leagues. But that was also true for tons of civic associations, the Lions, Kiwanis, Daughters of the American Revolution, on and on. These Groups were massive organizations. Some of them had hundreds of thousands, if not millions of members. And that was their strength. And we've seen over time, I don't think this was anyone's maligned plot. Some things just happen. We've seen an ebbing away and an erosion of those kinds of organizations and a weakening of those kinds of organizations. And so I think that one of the things that distinguishes the nonprofit sector certainly over my lifetime has been increased professionalization. And some of that has been a positive right. Organizations that are not massive membership organizations are lighter on their feet. I think that there's probably more creative, more innovative, more cutting edge nonprofits today than there, you know, was a hundred years ago. I don't know how you would test that assertion empirically, but that's, that's my sense. And certainly there's been professionalization of the management of these organizations. They've become increasingly sophisticated. And some of that has been good. But something has been lost as well. And I, and I think that even though there still are organizations that have lots of members to them, even the organizations that have lots of members, it's kind of different now. They're small donors who give a couple bucks on the Internet. They're not going to community meetings in the same kind of way. They don't feel a stake in those organizations, that they're equity stakeholders in those organizations in the way that local businessman did in his kiwanis Club in 1955. So I think something has been lost in the transition to, as you say, associations without members. I think the nonprofits are incredibly prominent, incredibly effective, and have high degree of access in dc High degree of access to politicians in city hall, his city halls across the country. But I don't think they're as connected to the general public as they used to be.
- [17:33]
A
And let's go to the public's perception of NGOs. How has that shaped the different critiques that you talk about in the book of NGOs? Not just from the right, but I think from all sides.
- [17:43]
B
I guess I feel like this is an example of the horseshoe theory of political action happening, where my perception is that nonprofits are increasingly under attack from both the right and the left and the specific elements of the critique or different. I think in recent years, left wing critics have looked at nonprofits and asked some really hard questions about racial disparities, particularly at the leadership level, both executive and board members. I think some very hard questions, and understandably so, were asked about a bunch of nonprofits in the wake of the MeToo. Movement, there were a bunch of executives, mostly male, that were engaged in sexually harassing behavior and for too long that went unexposed and unpunished. I think left wing critics have also focused intensively on substandard wages paid at the lower levels of nonprofits. And those are all, from my perspective, fair critiques and things that the nonprofit sector should take seriously, and I would argue has taken seriously on the right. I see the critique mostly being focused on viewpoint diversity and wokeness, for lack of a better word, and feeling that in many nonprofits it has become difficult to voice opinions outside of a very narrow progressive orthodoxy. And I think frankly, there's some truth to that critique as well. And part of what I think has happened is that the nonprofit sector may have overcorrected to the left critique and undercorrected to the right critique, but we can come back to that. But I think that the thing that unites the left wing critique and the right wing critique, and both left wing and right wing critics use this phrase, which I hate, but I'm going to repeat it. They use this expression, the nonprofit industrial complex, which is of course such an insult. And both on the left and the right, you have critics saying, you know what, nonprofits are motivated by elite opinion and funded by out of touch elites and are really about perpetuating their own self interest rather than solving social problems. And again, that kind of critique, that's not exactly a new critique. I think you could probably go back certainly at least 50 years, probably longer, and find echoes of that. But it feels louder now and it's hard to judge. Right. You know, we live in the social media era and sometimes it's hard to separate the signal from the noise and get a real read. But it feels like those kinds of critiques have a sharper edge and are gaining more purchase now than when I started in this field in the late 80s, early 90s.
- [20:27]
A
I think that's a good summary. Let me add a couple critiques that I think you've talked about that I've observed. Well, we'll put a pin in them. I want to kind of have them on the board and then we can get into them in more depth. But I think one thing that you talk about that is also kind of a horseshoe criticism is a critique of the lack of transparency in the nonprofit sector. So I think we can talk about the point about opaque funders using different kinds of vehicles so that it's hard to see where nonprofit money is coming from, including nonprofits that do service delivery. That's A critique that I've seen a lot on the right, but as you flag is also a perennial critique from the left. One part of this that I had not fully grasped was the critique from the left of the nonprofit industrial complex for this historical move that happened where nonprofits now do a lot of work that many people on the left would prefer the government to do, that there are organizations that are not the government engaged in this kind of service delivery. And I think a lot of, especially more on the left, more Marxist critiques would be. That's like an erosion of the government's proper role in civic life.
- [21:34]
B
Yeah, I think that's right. Another term of derision that is sometimes thrown at nonprofits, particularly in a place like New York, where they're particularly strong, is that nonprofits amount to a kind of an unelected, quote, unquote, permanent government. The mayors come and go. And again, there's elements of truth to this. If you look at some of the people on the Adams transition committees, some of those are the same people that were on the transition committee for Adams transition committee from Amdani, Adams, de Blasio, Bloomberg, you'd see a lot of continuity. And a lot of that continuity comes from large nonprofit service providers that are there, no matter who the. The boss in charge is.
- [22:19]
A
A couple more, just to put even more meat on the bones here, I think it was interesting when Elon came in, when Doge came in. We cover that a lot here on statecraft. But Elon hates nonprofits as a vehicle. He's very opposed to anything that's not a for profit. Inevitably the incentives will be misaligned because they're not in touch with a real market signal. So there's been that critique as well. Just that the structure of the nonprofit is the wrong mode to try and do social change at all. I think another critique that obviously you've seen is that nonprofits have been largely one of the main drivers of the Woke turn in American life. I think particularly up to and through 2020. This was a, this is a very strong critique that the NGO class was not just turning Woke, swinging to the left, not open to viewpoint diversity in those organizations, but it was driving some major change in American life. There were some very interesting kind of odd parts of the Doge saga, which I know you follow this, where Doge tried to embed someone in the Vera Institute, which is a nonprofit. It's not a government organization, but it takes money from the government. There was this very odd moment where the. You tried to put somebody in that Organization of the nonprofit said, no, we don't have to take you on on board. We don't have to hire you. Kind of a remarkable moment, I think, for flagging how. How strong the antipathy towards NGOs as a class was there.
- [23:42]
B
I don't want to blame the victim. Right. I do think that some of the things that the Trump administration has done feel really motivated by revenge and animus and bad policy, from my perspective. And so I'm not a supporter of the Trump administration attacks on universities or their threats to go after philanthropies like Open Society and Soros that they deem to be enemies of the state. So I think there's been a lot of bad ideas, bad policy, and overreach on the Trump administration's part and those who support the Trump administration. But I would say that they're responding to something real and that if nonprofits don't take the critique seriously, that they have sometimes been drivers of polarization, that they've sometimes have been out of touch with a mainstream American opinion, that they sometimes can appear opaque and unaccountable. Those are all real issues that I think the sector has not wrestled with adequately and helps to fuel the kind of overreaction that we're seeing on the right right now.
- [24:49]
A
I might be a little bit more inclined to blame the victim than you are, but I think, broadly, I agree with the thrust there, that there's a lot of foolish overreaction happening in this administration to the sector, and that there's something that that backlash is about that's real. Let's table the kind of parsing critiques here, and I want to hear a little bit about your experience over two decades running the center for Justice Innovation. And through that lens, I'd like to just get a couple basic facts on the board about how an organization like CJI works, who works for it, who funds it, what it does in the world. From there, maybe we can start to get a better picture of which of these critiques hold water or don't. We can argue about that.
- [25:32]
B
I think that I've had the good fortune of living through what I would say is kind of a golden era of nonprofits in New York, as I started off by saying. You know, I think that coming out of the 60s and 70s, there was a turn to using nonprofits more, both because of a, you know, backlash to perceived government failures, but also a shrinking public sector. Right. You know, there was a shrinking tax base. New York flirted with the brink of bankruptcy. My perception is that nonprofits I'm thinking here of places like the Central Park Conservancy. I'm thinking about the Times Square Business Improvement District and the other business improvement districts, that these were kind of innovative responses to really shoring up important city services and civic life at a moment of real crisis for New York City. And I think that perhaps not as prominent as those two examples that I just mentioned, that the center for Justice Innovation has been engaged in similar work over the past close to 30 years now. So the center for Justice Innovation is an organization that's dedicated to reforming the justice system, and it's predicated on a critique of the justice system, that the justice system neither is fair nor as effective as it could be. And in particular, the birthplace of the center for Justice Innovation was in midtown Manhattan with a project called the Midtown Community justice center, which was dedicated to forging a new response to individuals that had committed low level crimes in and around Times Square. So these are people that had committed misdemeanor offenses. Prostitution, drug possession, shoplifting, fair beating, these kinds of offenses. And the idea was that the justice system too often was doing one of two things with this population. Either they were doing nothing. They were essentially letting people go with no kind of penalty for their criminal offense, or they were kind of over indexing on short term incarceration. They were sending people to Rikers island for three weeks, four weeks, two weeks, few days, as a response to having committed a misdemeanor offense. And we created this project, the Midtown Community justice center, to kind of forge criminal justice responses in between nothing and incarceration. And so we were trying to create a range of penalties the judges could use instead of nothing or jail. And so that looks like drug treatment, that looks like community service, that looks like job training, a whole bunch of alternatives to incarceration, and really embed them in courthouse apparatus to ensure that they'll be used and they'll be high quality. And that project, which was launched in 1993, turned out to be enormously successful in terms of helping to reduce local crime and improve local, local attitudes towards criminal justice. And from that base, we went on to create a whole bunch of other experimental justice projects that were kind of similar, although in different locations in places like Brooklyn and Staten island in the Bronx, all five boroughs, working with different kinds of defendants, including some defendants that had committed very serious offenses, where there were felony defendants, who we were providing long term care for in lieu of incarceration. And so an organization like the center for Justice Innovation is deeply intertwined with government. It cannot function without the trust and support and of government, and that includes financial support. So the center for Justice Innovation, and I must confess, I don't know what the ratios are today. I stepped down from running it in 2020, but back when I was in charge, we got roughly equals amount of money from city, state, and federal government sources. And that comprised, you know, anywhere between 75 and 80% of our budget. And then 20% would come from private sources. And so what you, what you hope for as a nonprofit executive is that you want to have diverse funding sources so that you're not too dependent on any single funder who can just decide one day that they're not interested in funding you. And so it felt to me like we were in a relatively strong position in that while we certainly would have suffered greatly if the state or the city had withdrawn their resources, we weren't solely dependent on any one branch of government to support, you know, 90% of our operations. It started off by being solely a function of working with the court system to provide alternatives to incarceration to judges and other alternative remedies. We also worked with judges in civil court and family court as well. And then over time, we started to do more community based work and try to move upstream and prevent people from entering the system in the first place. And so we were the first organization that brought the violence Interrupter, which has become now very widespread in New York City, trying to, at a community based level, hire credible messengers who had been engaged in gangs or drug dealing or other kinds of criminal activity, but that have gone straight and engaged them and kind of intervene, train them and engage them in intervening in conflicts. So you didn't get this kind of cycle of retaliatory violence which is at the root of so much of the violence we see at a neighborhood level. So we've done programs like that in, you know, neighborhoods like Brownsville and Crown Heights in the South Bronx, as well as programs that worked after a crime has been committed and adjudicated.
- [31:24]
A
One of the things you talk about a lot in this book is this kind of meta level of just how do you run a nonprofit? Well, as an executive, and you talk about a little bit of your own experience, including coming in and deciding not to put together a big strategic plan and a vision and like a five year program. I'm curious how that went for you, what you think that kind of choice says about the way to run a nonprofit. And I'm curious which challenges came up for you over that basically 20 years that were kind of mission agnostic like, what were the challenges of just running an organization like this that's in some ways responsible to the state, federal, local governments that you get money from to other donors, to the staff, to the mission? Tell me about kind of just the ba. You thought a lot about this both inside and out. What are the kind of basic challenges for a nonprofit executive?
- [32:16]
B
It's always been a hard job because. And you, you kind of point to it. I think one of the challenges of running an organization is that there's multi, like the center for Justice Innovation, is that there's kind of multiple lines of accountability. You're accountable at some level. If you're a service delivery organization, you should be accountable to the clients, the recipients of your services. You're accountable to staff at some level, you're accountable to the board, you're accountable to the donors, and you're accountable to, to government. And so when it works, in some respects, you could argue that the nonprofits are some of the most accountable institutions that we have. I mean, that those are multiple, multiple levels of stakeholders that you have to worry about all the time. And when it feels good, they're kind of all in alignment. Right. They're all pointed in the same direction. But of course, that's not always the case. And increasingly it's not the case. We haven't touched on what I think is at the root of a lot of the challenges in the nonprofit sector, which is a real generational schism that's happened in recent years. So maybe we'll come back to that.
- [33:21]
A
Definitely.
- [33:22]
B
I guess I'll just be crass with you, for lack of a better word. I think the biggest challenge and the hardest thing about running a nonprofit is raising money. And at the end of the day, the people that rise in the nonprofit sector to leadership levels are those that can raise money. That, that is the, that is the sine qua non of leadership in the nonprofit sector and the thing that, that separates those who rise to the top from those who don't. And some of that is a positive thing. Right. To raise money, you have to be able to kind of articulate a vision in a way that makes people, whether government or individual donors or private foundations, want to write a check to you. So some of that fundraising pressure, I think is healthy for an organization and I think probably selects for people who are visionaries and who are highly articulate and highly persuasive. But I would argue that there's some pernicious or unintended consequences of selecting leaders based on whether they can raise money. Right. It's not necessarily the most knowledgeable people about the subject matters. It's not necessarily the best managers possible. And so I think I found one of the biggest challenges running a nonprofit was the need to constantly fundraise, to constantly bring in revenue and to somehow not have that overwhelm, not have that be a hundred percent of my time when I was running the center for Justice Innovation and ensure that I was paying proper attention to the details of the work. So I was setting a high bar of excellence. Any organization has complicated interpersonal dynamics and that you have to manage that I was a thoughtful and responsive manager, that I was tending to the internal dynamics as thoughtfully and carefully and as intentionally as I was tending to the kind of external pressures of raising money. I haven't polled my peers, but I would be surprised if most nonprofit executives didn't say something similar. That they felt this kind of real tension between needing to spend a lot of the time out of the office, but also needing to also spend time inside the office on day to day operations. And those things often felt in conflict
- [35:36]
A
in talking to people. In preparation for this conversation. And just as I've been thinking about it, there's been a couple different stories that I've heard about why parts of this nonprofit crisis happened. One of them is there's a generational shift that happened where largely the kind of rank and file staff of these organizations became much more polarized or much more doctrinaire about certain ideas and they pulled their organizations left. That shift generated a bunch of tensions between staff and leadership in organizations. And there's another narrative which is rather than a bottom up pull to the left, there was like a top down pull from philanthropists that as we talked about a little bit, the class of people who's giving money to these organizations has changed in composition over time. There are more large philanthropies giving a larger percentage of the donations to these organizations. And those philanthropists, those relatively small set, you know, of elites, you know, whatever epithet you want to put on them, was driving this shift in behavior. And when you talk about, you're obviously not alone in this. When you talk about the kind of real pressure that you feel as a non profit leader to keep the money flowing, which of those narratives do you give more credence to?
- [36:48]
B
Both those things are true. And I don't, I don't think their intention, I think both were happening at the same time. And I don't know which, how I would weight them. I might be tempted to weigh it, you know, 5545 in one direction, but you could convince me it was the reverse. I think both of those things have happened. I think a lot of the problems in the sector that I diagnose are downstream of problems in philanthropy. I do think that many foundations are guilty of over the past 10, 15, 20 years of funding what's known in the business as intense policy demanders that kind of fueled polarization without really thinking about the kind of long term effects on American politics. So I do think, I do give credence to that argument. And then there's no doubt if you take out a half dozen nonprofit executive directors and buy them around to beers, I almost guarantee you you'll hear a range of complaints about young staffers and how doctrinaire they are and how orthodox they are. And I think a lot of people, particularly on social media, I think there's a lot of kind of anti woke people who castigate people like me for not, NGO heads for not. You know, they work for you just tell them to shut up. And maybe somebody could get away with that, but I don't feel like I could get away with that. I think it's a really hard way to run an organization. And I think the, the reality is that you govern with the consent of the governed, even when you're paying them. And so it's not so easy to just hand wave away the, the priorities and predilections of this younger generation. Like you have to deal with them. They're not, they're not going away.
- [38:36]
A
I want to come back to the, the philanthropist side, but I do want to take that opposing view here a little bit and press you on the relationship to the staff. One of the things you talk about in the book is how when you came in at the leadership of CJI in 2002, you instituted a lot of hierarchy in how you ran the place, in part because I'll let you narrate it, but you were a new leader in the org and you felt you had to drive the train. And then you say something to the effect of, I couldn't do that today and the landscape has changed and wouldn't be the right advice for me to give someone else today. So what happened between then and now?
- [39:14]
B
I mean, look, nonprofits are not immune from kind of the rest of the world. You know, they don't operate in isolation from the rest of the world. I don't know how you interpret what we've been going through over the last 10, 15, 20 years, but I think that social media has dri driven democratization at. At some level where everyone has a communicator in their pocket where they can communicate to the entire world instantly. And that has profoundly destabilized not just nonprofits, but government media, et cetera. I think also we went through, and I'm not. I don't follow it so keenly. I think it's kind of ebbed a little bit. We also went through a moment where essentially there was something that felt close to full employment, the nonprofit sector, where if you quit your job today, you'd have another job tomorrow. And so it felt like the combination of kind of social media driving democratization, the fear of finding yourself on the wrong end of a kind of social media beat down the reality that it's a highly competitive marketplace for talent. And that at least for a little while, I think that the balance of power shifted towards labor. I think that that was profoundly different than when I entered the field. Started working in the Nonprofit sector in 1989 on the heels of a recession where I looked for work for six months and I would have bitten your arm off for a job and I wasn't going to ruffle feathers once I got there. And then also, I hope this came across in writing the book. I'd be interested to hear your response, but I tried to be very careful. I do have a critique of this younger generation, and I must admit that don't feel like I share their values in large part, but I do want to be sympathetic to it. And I don't want to be just like an old man complaining about the young people.
- [41:12]
A
I'll be the younger man complaining about the young people when you're done. Don't worry, one of us will get the kicks.
- [41:18]
B
Yeah. So I mean, to be fair, right? And I'm the father of 20 something children. You know, I look at their world. They can, at a touch of a button, choose who they want to date. They can organize their Netflix queue. They can personalize the stuff they see on Instagram. And so it does kind of, that backdrop does create a set of expectations that, like, oh, when I go to the workplace, like, why can't I personalize that in the way that I personalize everything else? Easy peasy. And so to be fair to this generation, I do think that the world that they're growing up in or have grown up in is different from the world that I grew up in. In some ways that are positive, in some ways that are negative. Sure.
- [42:06]
A
You talked at the beginning of our conversation about some of the pressures from below that you thought were Basically salutary. You know, no more sexual harassment in the workplace, fights about wages, which I think are, you know, wherever you think about a given case, like, that's a pretty normal institutional fight to have about, you know, how much should I be paid in this organization? Then there's another set of pressures that were more about what's the mission of this organization that you talk about in nonprofits. Right. And we could go down a list of different kind of very public facing, very, very much in public NGOs that had these big tumultuous fights over what are we about, you know, the Sierra Club, this big New York Times piece about how it really tore itself apart largely over what I would not consider to be environmental issues. There's a great line in that piece where one club staff member gets criticized for focusing on Colorado's protections for wolves because what do wolves have to do with equity, justice and inclusion? And I think that was the. That was a big takeaway for a lot of people from that piece. But my sense is that there was both kind of internal org pressure, you know, tight labor market, more standing to lobby for yourself and your own interest internally alongside something that's pretty different, which is like, we should change what this organization does and is about and spends its time on.
- [43:26]
B
Yeah, I think. I think that's true, and I think that that's unfortunate. And I do think that that's where one would like to see more pushback from. From leaders than there sometimes has been. Parenthetically, before I go further, I just do want to note that I don't think this is an exclusively a problem on the left. Right. Look at Heritage. What's happening in Heritage is a very similar story. I would argue the terms of the fight are different, but it's a generational schism.
- [43:54]
A
Just getting notifications before this conversation, I've got a group chat with a couple family members that we've been calling the Heritage Crisis Comms channel, where we're just following whatever the latest in that schism is. So I totally agree it is not a uniquely partisan dynamic, but I do
- [44:09]
B
think that something has shifted. I don't know if you read Yuval Levin, who I think is very strong on this point.
- [44:16]
A
I used to work for him.
- [44:17]
B
I don't know him personally. I just know him from reading him. But I think that in various forums he's made this point that we used to go to institutions and hope that they would shape us and expect that they would shape us in our behavior. And increasingly, people are going to institutions, whether it be Congress or nonprofits or the New York Times and just viewing them as platforms for doing their own thing. And that's a profound shift. And I'm not quite sure what's at the root of that. That's probably slightly different than the forces I was talking about before. But I do think that that's a problem, and I do think that the answer will look different from nonprofit to nonprofit. But I do think it's important that nonprofit leadership push back on that, that the staff's job is not to reshape the mission of the organization, that that really is appropriately the task of leadership. I'm.
- [45:10]
A
I'm so glad you mentioned Uvolovin, because I actually got to work a little bit on the promotion for that book in which he talks about institutions as molders versus institutions as platforms. I think it's been a very helpful frame for me in a role where I'm. I'm. I mean, just frankly, I'm at a nonprofit where some of this work is a platform. I host a podcast. I get to talk to you, and I get to, you know, because of the institution, I get to kind of claim some of that credibility for myself. But there's a real risk, I think, in any of these forms that you kind of cannibalize the credibility of the institution to get a little bit more clout for yourself or danger for me would be seeing, you know, ifp or project gets DO is just a way to polish the brand and do public positioning for myself. Then you believe it when it's no longer valuable to you. So I, I think it's a really useful frame.
- [45:58]
B
I do think his work is. Is very important, and I recommend it all the time. I just did see it shift over the time. I mean, I. I've hired over the years, I don't know, easily hundreds and maybe thousands of people over the course of 20 years of doing this. And it used to be like, oh, we say what the mission of the organization is, and if you come to work here, it means that you bought into the mission. Right. But increasingly towards the tail end of my time, it didn't feel that way that people were coming to the organization because they were roughly interested in criminal justice. But really, I'm going to come here, I'm going to change this place. Some of that energy can be healthy if channeled in the right direction, but some of it has proven to be incredibly destructive for these organizations.
- [46:41]
A
Last thing on this talent question, I talked to a couple folks about this whole. Would add, I think, to your perspective here about tight labor markets. It was also the case for them, in their perspective, that it would be really hard to hire staff that didn't have this instinct that basically the talent pool that you were drawing from, if you were a nonprofit with an orientation towards criminal justice, say, or whatever the specific thing is, it's not like you could fire half the team and find new people who wouldn't have those views or those instincts about where the organization should go. There was like a talent pool problem there.
- [47:17]
B
I don't think that's universally true, but I think that was particularly true at elite institution. The more elite the institution was or is, the more I think that was the case and so the more that you're drawing from a college educated or elite educated population because your employees are lawyers or what have you, I think that critique is fair. And so I said that some of the problems in the nonprofit sector are downstream of problems in philanthropy. I think some of the problems in the sector are downstream of how kids have been educated, both in universities and in high school and other educational institutions.
- [47:53]
A
Let me go back to the philanthropic side of it because I got a couple more questions there. You used the phrase intense policy demanders a moment ago in our conversation to describe the kinds of things that philanthropists were drawn towards funding over the last maybe 15 years. I, I haven't heard that phrase before. Will you describe what you meant by that?
- [48:11]
B
I do think that philanthropy has driven polarization. I guess I'll just speak to the field that I know best, which is criminal justice reform. That first of all, there's been a desire to fund advocacy over service delivery. And so one of the pernicious effects of the, of the past 20 years or so is that we've seen a bunch of service delivery organizations feel like they have to open policy shops. And we've seen a bunch of organizations that were devoted to policy open 501s and get into direct political funding. And at that point, nonprofits are explicitly engaged in political behavior. It's hard to say that you're a nonpartisan, above the fray organization when you're actually funding politicians. So I think a lot of that has been driven by philanthropy wanting to, to have wins that they could wrap their arms around and say, hey, we were responsible for funding this legislative change or that win over there. When people complain about, quote, unquote, the groups that have so much power in the Democratic party in particular, a lot of those are essentially single issue organizations, each within their own domain, whether it be education, criminal justice, housing, homelessness, lgbtq, what. What have you. They think their issue is the most important, the only issue that matters, and they are exists just to drive extreme policy on their issue. And I think that's been to the great detriment of the Democratic Party. Certainly you may have more window into the Republican Party. Whether a similar dynamic pertains in the
- [49:49]
A
Republican Party, I think less so, in part because the demographic base of the party has been different, although that may be changing. Tell me more about where that demand from funders comes from. To blind myself for a second, like, if I was a philanthropist and I had a lot of money to deploy on service delivery, what are the sorts of things that would make me think, okay, wait, no, I'd actually like to fund an advocacy group instead that sits in congressman's office.
- [50:15]
B
I'm not 100% sure what drives it, whether it's guilt. I haven't been on the phone therapic side. I've been a professional supplicant most of my life. Going to try to curry favor with philanthropists. So I do try to get into their heads. I can't really speak to the dynamics of how things have shifted in philanthropy. I can just say, though, from my experience that when I was at the center for Justice Innovation, towards the end, if I wanted to raise private money and I went to a foundation and said, well, we run this program, the Brooklyn Mental Health Court, and it's working. I'm just making up this number. I can't remember what the real numbers are. We're working with 200 felony offenders every year. And we can actually show you hard research by independent evaluators that we're actually improving outcomes for this population and reducing the use of incarceration and improving their mental health outcomes, improving their job prospects. I always slept very easily at night because I'll take you and show you. I can show you 200 people per year whose lives are measurably better based on the work we were doing. And at a certain point, foundations ceased being as interested in that story because that felt like, oh, that's cute, but that's 200 people. What we want is transformational change. We want structural change. And so at the end of my run, it became very hard to raise money for discrete service delivery programs like the Brooklyn Mental Health Court and much, much easier to raise money for. Help us do this campaign to close Rikers Island. That's where the heat was. And I think one of the things that's true about philanthropy is that it's faddish, you know, things wax and wane and crest. When I was coming up in the nonprofit sector, there was a whole critique of the sector was that it was kind of touchy feely, wishy washy. People like me could come tell you a story about one person they helped. But like we need some hard minded business thinking here, a real kind of focus on statistics and evaluation. And that was kind of the dominant trend in philanthropy for the first 10, 20 years of my career. And at a certain point it shifted and what became hot was issues of racial justice and transformational structural change. And I think that may have crested and we're onto something else now.
- [52:38]
A
A lot of the way you describe the culture of philanthropy, the kind of faddishness at times, the at times boredom with small or medium sized effects mirrors a lot of what I've seen in my time around the kind of venture capital space. And I wonder if there is some kind of crossover in ideas or frame a reference between VCs and philanthropists, some of whom you know are the same people where there's more of an interest in catalytic change. I've heard that word a bunch. Interest in funding new organizations over existing ones or funding a new special project at an existing organization instead of the core work an org is doing. Am I making up that parallel?
- [53:17]
B
No, I think you're connecting some dots for me that I don't think I had properly kind of connected on my own. I do think that that's a plausible explanation for what we've seen and you can see it in the vocabulary of many of these foundations over the past 10 or 20 years. Increasingly people talk about we're in the business of placing big bets. And that's not so different from venture capital saying like oh, we're going to fail with a hundred things, but we're hoping to find one unicorn. It's very similar.
- [53:46]
A
I'm just free associating here a little bit. But I imagine some of the appeal of a big campaign to close Rikers island big messaging campaign is if it hits, it feels like one of those, like you're returning the fund in venture capital even though many of those messaging efforts will fail.
- [54:03]
B
Yeah, exactly.
- [54:04]
A
One thing I've seen a lot is philanthropists who want to give restricted funding funding for just this specific project instead of funding an organization and trusting that organization to do what it does best. And when I talk to other professional supplicants, this is a big complaint. I hear a lot of that philanthropists really want to have their name on a pet project. Maybe it's not as Exciting to say, yeah, I supported the ongoing operations of Organization X. How did you run into that dynamic?
- [54:34]
B
That was certainly a dynamic that I ran into all the time. And part of that was fun is too strong a word. But part of that was the kind of delightful challenge of fundraising. Right. My organization wanted to do X, philanthropist wants to fund Y. And the challenge of being a successful fundraiser is in part to either convince them that what you're doing is actually why, or to find the Venn diagram, the overlap in the Venn diagram of where their interests oversect with yours. And so part of that is appropriate. And very few foundations that you go to are just explicitly chartered to. We want to fund the center for Just Innovation and Center for Justice Innovation. Like organizations. Occasionally you'd find that, but very infrequently so. Some of that is normal and I don't think is going to go away. But some of it comes from a less healthy place of distrust of organizations and wanting philanthropists wanting to put their stamps on organizations that feel a little bit like exceeding what their remit should be. I do think that there's been some healthy pushback on that. My sense, again, I don't want to kind of overgeneralize. I'm not in philanthropy. I sense there's been a big push over the past five or six or seven years to do more general operating support, that people have listened to the critique of professional supplicants like me and your friends and are trying to get better at that. I do think that philanthropy is trying to reform itself on that dynamic a bit. Little, Little bit.
- [56:10]
A
Let me change tax a little bit and spend a little bit more time on the specific kind of subdomain of nonprofits that you've spent most of your career in in service delivery. And I want to talk about some of your critiques in that domain and some of the critiques that people make of service delivery organizations, that specific kind of ngo, because I think people can wh on the Heritage foundation or the Black Lives Matter organization. And those are in some ways slightly different beasts, even though they're all 501C3s. There's been a lot of conversation. I've seen it especially around the city of San Francisco, although I think you've seen it in New York as well, about inefficiencies in the nonprofit sector, about graft in a lot of cases, about skimming off the top and about structural disincentives to solve the problem that your nonprofit is formally about. There's a piece that I think you And I both read and you mentioned it in your book about an affordable housing Org in San Francisco, which basically the way the incentives lined up benefited from there being no other building of affordable housing in this neighborhood, and that the money that that nonprofit made was directly correlated to what the rents were elsewhere in that neighborhood, that it was basically making up the difference. I think one critique of nonprofits would be that specific case maps to like a structural pattern here, that lots of nonprofits have maybe subconsciously a disincentive to actually solve the problem they work on and to close it out, because then the funding stream would dry up. And that's like a very meta level critique of nonprofits at all. Whereas a, a business would not have that challenge, may have other challenges. I'm just going to throw that at you. What do you think of that kind of structural critique?
- [57:49]
B
Well, let me say first give you just an emotional response that's perhaps inappropriate for a podcast. It infuriates me and it feels incredibly disrespectful. And I do think it's one sign of just how far nonprofits have fallen that people actually think that there are affordable housing nonprofits and homeless service providers that would prefer people to be unhoused just so that they can continue to draw huge salaries and continue to exist. I don't doubt that there are some examples of perverse incentives out there. And so let me not deny that, and let me also not deny the fact that there are in fact cases of corruption. Right. Nonprofits, I would like to tell you that they're immune to these things, but they're staffed by fallible humans who make mistakes and sometimes criminal level mistakes. And so for sure, we should root that out where we see it. But at a meta level that you're talking about this notion that nonprofits don't want to solve social problems, that want to perpetuate social problems, I just think couldn't be further from the truth. You know, I think that the stereotype of nonprofits that I talked about when I started in the sector of like, generally, not exclusively, not 100%, but that generally the people that are attracted to work in non profits want to do good in the world and want to solve social problems and want to make San Francisco, New York, name the place a better place. My experience, my lived experience has been that is mostly the case, almost 100% the case. And so, you know, I certainly know people that run, you know, large kind of non profits to provide homeless services. They are passionate about solving the homelessness problem, passionate about it. And so it really, I mean, it saddens me that we've reached a stage where, like, they can somehow be construed as the villains in the story rather than part of the solution, but that's where we are. So let me also, let me go further than that, slightly further than that. And this gets to the kind of tension that you articulated about the critique that, oh, why do we need nonprofits? Government could just do this work. Well, in fact, in my experience, government is worse than nonprofits, mostly. You know, again, I'm painting with a broad brush. I'm sure there's lots, lots of excitement.
- [60:20]
A
We're having the conversation at a high level.
- [60:22]
B
Yeah, we're having, painting with a broad brush, that generally that nonprofits are more innovative, less bureaucratic, lighter on their feet, more mission oriented, more creative, more idealistic. All these things. Look at whatever domain you want to be. If my child had to be arrested and go receive services, I'd much rather them receive services from a nonprofit organization than the department of probation. And so, you know, when I run up against people who seem to think that nonprofits are like, not just a. Not a force for good, but like a force for evil, that they're engaged in perpetuating social problems, I mean, the thought experiment that I would. I would turn to you is if we could get rid of all the nonprofits tomorrow and have that work performed by business or, or government, would the world be a better place? Like, I don't think it would.
- [61:24]
A
I think it.
- [61:25]
B
I think the world would be a massively worse place. And of course, you couldn't convince business to do most of this work.
- [61:30]
A
Right.
- [61:30]
B
Because there's no profit to be gleaned from it. And government service provision, we all have had horrible service provision experiences with government. There's nothing to say that government is going to supply these services better than nos. I think the, the preponderance of evidence suggests that they provide these services worse.
- [61:49]
A
Let me take a couple points here. I certainly agree with you. I think the number of people working in the nonprofit sector who are explicitly to themselves motivated by graft or who don't have ideological commitments to the work they're doing is very slim. That is not my experience in either the policy research part of this world or in my limited experience with the service delivery folks. There is still a question here about the structural incentives, what you can convince yourself you're doing about the narratives that we tell ourselves. I think that this is a universal human thing. You had a great kind of survey interview piece a couple years ago with current and former nonprofit executives. And you quote one of them admitting there's, quote, corruption, waste and pocket lining in the nonprofit sector. And that highly motivated and savvy nonprofit executive grifters, this was their language, can go for years without getting caught. You had somebody else point out there's little incentive for nonprofits to be efficient, which can lead to, quote, bloated organizations and overpaid chief executives. So while there's not a, I don't think people are becoming billionaires in the nonprofit sector, lots of folks I think will, will acknowledge there's can be a nice overlap between doing the work in a particular way and making a lot of money doing it. And if you're not effective, you may have structuralist incentives to pay close attention to that outcome.
- [63:08]
B
Okay, so I just went on a passionate rant defending nonprofits. Now I'm going to talk out of the other side of my mouth. So a lot of what I'm not really going to deny what you say, and I do think that you can survive in the nonprofit sector because it isn't subject to the same kind of market pressures as business is. There's a lot of nonprofits that continue to exist year after year after year, regardless of whether they're having a good impact in the world. And so while at a high level, I do would defend the nonprofit sector against incursions from either government or business trying to provide the same services in any specific case. Sure. You can find plenty of nonprofits that are not good, where executives are overpaid and where they're not delivering services as effectively as they could.
- [64:02]
A
I can't deny that.
- [64:04]
B
Sure.
- [64:04]
A
But I guess the, the maximalist view of this, this critique would be something like what Elon Musk has said. For the record, I don't think this is, I, I wouldn't agree with this critique, but the perspective would be because these institutions are not tethered to a profit motive, they have kind of a, no matter the, the character of, of this or that executive or this this or that staff, they're disincentivized from paying close attention to impact in some ways, or they pay attention to impact because funders want it or because they have a particular ideological commitment. There's a structural challenge that for all the flaws of business, you know, if a business isn't selling product, they know that immediately and everyone's livelihood is on the line there. There's like a very, very high level critique of the form of the nonprofit at all.
- [64:54]
B
I mean, I guess I feel like nonprofits are being held to a very, very high standard. Have nonprofits succeeded in solving the problems of poverty and racism and social inequality?
- [65:08]
A
No.
- [65:09]
B
But the reasons that they haven't solved those problems, despite plenty of them being devoted to solving those problems, number one, limits of the human imagination. I don't think we actually know how to solve a bunch of the social problems that nonprofits are chartered to solve. And then, number two, in fact, the political will doesn't exist in the country to solve these problems. Really. And so to beat up nonprofits because they haven't magically made homelessness go away feels like it's moving the goalposts in a way that's very, very difficult for any organization to meet. I guess I would also just say the book I wrote previously to this one was called Gradual, and I tried to make the case for incremental change against those who argue for radical change. It's not that Elon's argument or the argument that you're ventriloquizing is totally stupid and should be shot down like there's a germ of truth to it there. But I'm much more. Again, part of the motivation for writing this book is to try to encourage nonprofits to kind of wrestle with these questions of public accountability and wrestle with these problems of lining up their interests with the public good so that they don't get subject to the kind of, I would say, radical, bad change that Elon Musk tried to bring.
- [66:36]
A
One kind of common thread from critiques on the right and the left that we talked about is this demand for more transparency from nonprofits. And I think you could take the kind of. The graft view. We need to make sure these people aren't skimming off the top, and that's why we need more transparency. Or you could take, I think, a less cynical view and say it's just often very opaque where funders. Who is funding a given nonprofit because of some neat financial architecture in the American system that means, you know, if you're a funder, you don't disclose what you're funding.
- [67:12]
B
I'm sorry, I would push back a little bit on that. I mean, I do. I do think that, you know, again, they're not perfectly transparent, but, you know, most nonprofits have to file an IRS 990 every year. Those are all publicly available. You could go on. Anybody could go online who has a kind of Internet connection, and you have to list where the money came from, in fact. And so I do think that. I think that part of the problem for nonprofits is the opposite actually, that they're pretty transparent about some things like including where the money is coming from and so that, so if you're a muck raking ideologue and you want to blame someone and you're unhappy with George Soros or you're unhappy with the Koch brothers, you can immediately figure out who they're funding and you can turn your arsenal to the, to those NGOs that have received money from those, those places.
- [68:12]
A
But individual donors are not disclosed to the public on 990s. I mean, you know, the, the salaries of people at my institution and yours are, are public from a couple years ago. You can pull the 990 and see that donor advised funds.
- [68:24]
B
It's not perfect, but I would argue that it's much more transparent than the average, you know, non publicly traded business.
- [68:31]
A
Sure, I'm, but we're, we're talking about the critiques of nonprofit sector and I'm, I'm drawing this from, I think the first couple of chapters of this book where you outline transparency is kind of an ask continuously from critics of the nonprofit sector.
- [68:42]
B
Again, maybe I'm pushing back too hard. I do think that nonprofits can and should be more transparent. And I think one of the things that I'm most passionate about, which is a slightly different point but related, is that I find that many NGOs have essentially given up on persuasion, have essentially given up on speaking to the bulk of the American public. And so when I look at the newsletters or websites or annual reports from nonprofits, I often see a range of very ideologically freighted language, some of which is unintelligible, if you are not already in the kind of elite left club. And I think that that's a profound problem that NGOs should be in their kind of, when they're public facing, when they're communicating to the world, should be aiming to convince people and should be speaking plain language and in a way that is intelligible to the vast bulk of the American public. And I think a lot of organizations over the last decade are guilty of not doing that.
- [69:54]
A
I'd certainly agree with that, although I might argue that that critique doesn't go far enough. I think there's certainly, it's certainly true that there's like a linguistic thing going on, that there was a lot of messaging from, from these institutions that was not aimed at persuasion at all. I think that's certainly true. I think if you look at the nonprofits that study and advance journalism as a discipline, the journalism fellowships and nonprofits in that domain, there was absolutely a turn away from persuasion and towards an idea that nonprofits existed, protect the American people from themselves and from, from believing false things, that that was their, their role, rather than trying to convince them to believe things that were specifically that they believe were true. But isn't that more a question, that's more a debate about political tactics? Maybe it's unwise or unsound to make certain arguments or use certain freighted language. And I, I think the, the broader critique of the nonprofit sector from the right would be that there was the underlying beliefs that were the problem, the underlying commitments about ideologically that were the challenge. Whether or not you used bipoc or you capitalized what, you know, black or not, that was a symptom but not a cause.
- [71:04]
B
Yeah, I think both are true. I don't, I don't disagree with that, but I do think that it speaks to who are the nonprofits for? Who are they accountable to? How do they perceive their mission? Getting back to where you wanted to start with basics, nonprofits are organizations that have been granted an incredible privilege by the federal government. They're exempt from tax under 501C3. And that is a gift given under the assumption that these organizations are operating in the public good. And I think that a lot of organizations, you know, again, it feels maybe too harsh to say, but have lost track of the fact that they're supposed to serve the public, the broader public. Again, I don't mean to suggest that just tidying up some language is going to solve the problem because I do think it's, it's more than just a linguistic problem. I do think it's about an orientation toward, towards the world. And the public includes not just Democrats, but independents, moderates and Republicans. And nonprofits should seek to serve them too. Sure.
- [72:12]
A
Just to go back to something you said and maybe a violent note of agreement here, I mean, I definitely think that transparency is always the first thing that critics of any institution can complain about, even when the institution is fairly transparent. I'm thinking about when I was covering DOGE and USAID and what I thought was very reckless attack on that set of programs there. I got in quite a firestorm because somebody tried to do a little kind of red line connection between me and USA to imply that because there were some donor advised funds or fiscal sponsorships here and there that I was being paid by the, by the federal government to say these things, which was, you know, like a pretty deranged. But you see that a lot. And I think that that kind of conspiratorial instinct is, is very normal in American life today. All that to say, I, I take your point. The transparency is not the be all, end all of good governance of nonprofits. We were talking a moment ago about places where you think that the nonprofit sector, nonprofit service delivery does a lot better than the government would in providing that same service. And I'd be curious to hear from you a little bit more on why that is, what domains that's true in, what domains that might not be true in. Because as we talked about here, the kind of trend over the last 50 years for nonprofits to do more of this work of service delivery was a historical trend. Didn't used to be this way. There were some big kind of in the public eye failures in the 60s and 70s that really I think mobilized some of this action. But it's not like it's a, a human universal. The nonprofits must fill all these roles. I assume to some degree it's historically contingent and is dependent on the nature of these government institutions, et cetera. Like in what places would it be appropriate for nonprofit to say, okay, we're wrapping up because we think we can help the, the feds or the state do it better?
- [74:00]
B
I mean, certainly I'm not smart enough to know. I don't have an easy answer to your question. Oh, let's rely on nonprofit service providers in, you know, the housing domain, but not in the education domain. I don't have an easy answer for that. I guess I would say, though, to riff on your question a little bit, I think that there's a number of reasons why when nonprofits outperform government, I think there's a number of reasons for it. It's not magic. I think one reason is that they tend to be less bureaucratic. They're not encumbered by civil service rules. Another, another reason is that they tend to be cheaper. Their employees often make less than comparable workers in government.
- [74:45]
A
Certainly true in New York City, about 20% less.
- [74:48]
B
I think broadly another reason is that traditionally has been the case, not always. I mean, there's certainly plenty of mission driven people in government too. I think there's a higher preponderance of mission driven, mission oriented staffers in nonprofits than there is in government agencies. And I guess one concern I have is that nonprofits, as they turn towards unionization, as they become more bureaucratic, as they invest more in HR and other kind of bureaucratic staffers, I think they begin to erode their advantages over government. And so it's not inconceivable that if we fast forward 10 years, I might take the other side of the argument. If these trends continue in the nonprofit sector, I think you can make a strong case that 10 years from now that there is no difference. And so why outsource these things when government can just perform at the same level?
- [75:46]
A
About a month or two ago, we did an episode with Professor David Schleicher, who's at Yale.
- [75:50]
B
He's great.
- [75:52]
A
He really is great. And probably get him on again. But we talked about pension bloat in some of these in Chicago specifically. But there's been this kind of looming pension crisis in a couple different major American cities and states. And that's one kind of theme here in the background, which is that, as you pointed out, often nonprofit pay less than the equivalent or the closest analog government org that could perform that work. And so in some ways, it's just an obvious fiscally smart move by the mayor or the governor or whoever to encourage that kind of outsourcing to nonprofits just because it's a lot cheaper. But that's a function, maybe not just of the nonprofits, better mission alignment and less bureaucratization, et cetera. But there's public sector, you know, civil service laws, like you say, that are the fundamental constraint on doing that thing for cheaper, or at least one of the constraints. Maybe. I won't say the fundamental constraint. I'll get a lot of pushback there. There's a lot of reasons.
- [76:46]
B
Yeah, I do think. I do think that's fair and that that terrain may shift in the future. I don't know.
- [76:52]
A
Maybe. To wrap up, I want to come back to this question about tactics and the language that think tanks use and the way they think about the relationship to their work and to the American people. I think one of the things that you talk about in this book is whatever happened in 2020. And I'm not gonna try and give, like, a full diagnosis of the kind of full social happening in the summer of 2020, but I think you and I both have this perception that that was like a real change. There was a shift in how nonprofits saw themselves in the world, what they did in the world, how people responded, and that that kind of moment has driven a lot of the backlash, which up till then was not kind of coalesced in this kind of concrete, you know, nonprofit. The nonprofit sector didn't have the same target on its back, even if there was kind of mounting frustration, to my eye. It's hard to know how to. How you convince people to trust the nonprofit sector again, without some kind of shift in how nonprofits govern themselves and see themselves. Because to me, if, if they change the language and the rhetorical approach, clearly a lot of that change is a realization that that didn't work tactically in 2020, that that was a failure and that alienated a lot of people and led to these kinds of circular firing squads internally about what words we use and how. But if that's just a tactical awareness, why should Americans trust the nonprofit sector will perform differently if, if given that opportunity? Again, that's a kind of loaded question, but I think you get what I'm after.
- [78:30]
B
Yeah, I agree. I mean, I do think that changing communication style is an important step, but if that's all there is, I think that will not be sufficient. I do think that nonprofits should take pains to articulate their welcoming to staffers across a broad political spectrum in a way that they have not been explicitly saying that on their websites and in their public utterances in recent years. And I guess I do think that they should really, in terms of how do they regain trust. I do think that the dangers, we touched on it briefly, the dangers of mission creep and the dangers of getting embroiled in political controversies beyond the scope of your organization has clearly ensnared many, many organizations. You mentioned the Sierra Club, the is kind of Exhibit 1A. And I recommend everyone read that article from last month. I think it was in the New York Times. There's no reason for that I can perceive for the Sierra Club to opine on the war in Gaza. I don't think you'll ever convince me that that's essential for an American environmental organization to take a political position on. And so I do think much greater mission discipline is part of the answer. A more full throated welcoming arms towards people that are right of center as staffers. And communicating in a different way is part of the problem. I think it's going to be a long road back. I don't think it's going to happen overnight. And I do think that ultimately the most important thing they can do is just do a killer job of whatever their mission is. Right? Like the more that you can show that you're reducing homelessness, the more that you're educating people, whatever your mission is, that's going to be the best bastion against the erosion of public support. I do think that the big challenge right now, I go out and talk about this book and I say, well, here's the nonprofit crisis is this kind of erosion in public Trust. And people sometimes look at me and they say, well, what are you talking about? The nonprofit crisis is Trump and the federal government, that is a crisis too. Don't get me wrong. You know, I do think that Trump is engaged in some, some very dangerous behaviors. But I guess in figuring out how to confront the challenges that the federal government presents right now, I just think nonprofits have to be very careful to try. And it may be impossible line to walk because it's very difficult. The more that the opposition to the Trump administration looks like just another battle between the right and the left, and it's a bunch of progressive NGOs and philanthropists who don't like Trump, I think the worse the nonprofit sector will come out for it. And so I guess, I think, I don't know if this, maybe you'll deride this as just a tactical move, but I do think it's really important for nonprofits and the foundations that fund them right now to be doing cross partisan work and engaging people in the center of the political spectrum and the right of the political spectrum and trying to stand up for, for the sector and values of civil society, because I think that's the only way they're going to be effective. And so one of the concerns I have is just that the more that NGOs look like politicized institutions that just exist to resist Trump, I think that they do long term damage to themselves.
- [81:55]
A
I certainly wouldn't deride that as just tactics, maybe to close when the rubber meets the road and leadership. People in the positions that you've been in try to do that work and they're faced with tension, whether from funders or from below. How are nonprofit executives supposed to navigate that? And obviously this is what you wrote the book about. Maybe to just put it in more statecrafty language. One of the things that we're very interested in is these principal agent problems where the organization formally wants to do this one thing, but in practice you have to work with a bunch of other people who do to execute, and those people have other goals. And especially some of these nonprofit organizations have been around for a very long time and there's been mission creep just over the course of their lifetimes. I mean, the Sierra Club might be an example, the ACLU might be another one. You could name any, any number of these organizations where this is a natural drift. And you talk about o' Sullivan's first law, that organizations that are not explicitly right wing tend to become left wing over time. I think that's often the case. So maybe to put a bow on all that. Let's say a nonprofit executive really wants to take your advice here, really wants to try and build those cross partisan alliances and refocus on the mission. What are they supposed to do tomorrow to do that?
- [83:07]
B
That's a really hard question to wrap up on, and I'm not sure that I'm going to have a succinct answer to that. My instinct, and I'm not sure this is right, and some of this is just what my personality is, but my instinct is that there's a lot of forces above and below and on social media driving nonprofit executives into confrontation mode. And there's a lot of forces driving nonprofits to carve out public positions on a host of issues and engage in a host of controversies. My instinct points in the opposite direction, honestly. And which isn't to say that it's always wrong to take public positions or to have a huge public platform. There's Certainly lots of NGOs where that's intrinsic to the work. My instinct is for nonprofits, and I think this is at the end of the day, maybe what I'm trying to argue in the book. I think nonprofits should keep their head down and stick to their knitting. And again, the first thing I would tell any friend of mine who's just ascending to nonprofit leadership is the most important thing you can do is focus on achieving the goals of your organization. And I think that we have a real, as I said before in a different context, we have a real signal and noise problem in our culture right now. There's so much noise and there's so much to distract attention and there's so many forces tugging at you. We talked about it in this conversation, whether it be donors or clients or staff or government, but to always at the end of the day, have as a touchstone on your desk the mission of the organization and that you are servant to that mission rather than the reverse, that the organization be servant to your ambition. I think that that's where the road back to full trust and faith and confidence of the public starts.
- [85:07]
A
From my perspective, Greg, I think that's an appropriate place to end. I had all kinds of other questions for you, but I'm going to link some of them or add them at the end of the some of the lines of questioning in the in the show notes so that people can harangue me about not asking them. Maybe we'll do another round, but I really appreciate you coming on and engaging with me on a issue near and
- [85:30]
B
dear to both our hearts I thank you for. You know, I realize that it's the book is slightly out of the normal ambit of your podcast. I'm really grateful for you to devote a little bit of attention to the nonprofit sector.
- [85:41]
A
I think you're right. Maybe we should, you know, even tweak the, the way we talk about what this, this podcast is about. Nonprofits do a lot of governance, for better or for worse, wherever you are on the spectrum like this. This is a question about state capacity. But anyway, Greg, thank you for joining.
- [85:55]
B
Thank you.
- [85:55]
A
I appreciate sa.