Restoring Public Confidence in the Nonprofit Sector

These remarks were given at a meeting of the Association of Fundraising Professionals.

SURVEYS OF public attitudes toward the nonprofit sector have not been sources of cheery news lately.  As Brookings scholar Paul Light noted recently, “public confidence in charitable organizations was shaken in the weeks and months following the terrorist attacks on New York City and Washington D.C., and has yet to rebound.”  If this is a function of isolated acts of corruption, then we can draft more stringent guidelines for ethical behavior, pledge to do better in the future, and wait for time to heal all wounds.  But I suspect that the crisis in public trust is a product of a deeper problem facing the sector, which it desperately needs to understand.

Here is root of the problem:  the nonprofit sector has begun to run afoul of one of the most powerful and enduring American prejudices -- a profound distrust of large institutions.  No matter where found -- in government, the economy, or the culture -- large institutions sooner or later come to be seen as remote, bureaucratic, inflexible, unresponsive, and undemocratic.  And this happens in only the loosest correlation with episodes of actual abuse or corruption.

This distrustful sentiment was present at the founding of the nation.  The framers of the Constitution barely achieved its ratification because its opponents could not conceive that a large, distant national government could become anything other than an oppressive tyranny.  Entire political movements – from Jacksonian Democracy down to modern-day conservative Republicanism – have been built upon distrust of big government.  At the end of the 19th century, the rise of “big business” – the large, vertically integrated corporations -- prompted powerful, populist efforts to cut them down to size.  In the fifties, “big unionism” seemed to many to be choking and stifling free enterprise.  Big institutions, always and everywhere, have triggered big reactions from the American public.

But the nonprofit sector seemed to be largely immune from this reaction.  Even as big government, big corporations, big unions, and the big professions – law, medicine, education, and so forth – were on the rise and earning their share of public distrust – the nonprofit sector largely managed to avoid it.  That’s because “bigness” didn’t seem to come to the sector in the same way or to the same degree that it came to others.  It rather appeared to remain essentially the realm of smallness, immediacy, and intimate community.  Its local civic institutions -- neighborhoods, churches, and ethnic and voluntary associations – were run not by distant, arrogant bureaucrats, but by friends and neighbors.  No arcane professional expertise was required to be part of civil society – it was enough to bring amateur personal idealism, compassion, and small gifts of time and energy.  There was no radical division between the organization’s “expert” and the subordinate “client.”  In a system of mutual self-help, today’s provider was likely to be tomorrow’s receiver. 

Historians debate how long this state of affairs lasted – it’s certainly there in the pages of Alan Ehrenhalt’s The Lost City, an account of the vigorous urban and suburban community life in 1950s Chicago neighborhoods – but in an important sense, how long or to what degree this was an accurate description of American social life is beside the point.  The critical fact is that this view of the nonprofit sector – non-bureaucratic, small, local, voluntary, and rooted in friendship and neighborliness – remained deeply implanted in the popular imagination until very recently.  Indeed, it is still a potent, popular image or myth about the sector.

The failure of the sector to live up to this image or myth at moments of high public visibility contributes significantly to the erosion of public confidence in it.  When citizens rallied eagerly to support the Red Cross after 9/11, for instance, they expected their gifts to go immediately to the victims, as if neighbors were supporting neighbors.  They were disillusioned to find that some funds were going instead to finance management overhead and rebuild reserve funds.  When they responded generously to pleas for funding to reopen a shuttered Statue of Liberty, they were not amused to discover that all the while the Statue of Liberty Foundation was in fact sitting on a respectable endowment, reserved for educational programs. 

Neither of these incidents, nor many others we could all cite, involved practices that were unethical or corrupt.  They would not have run afoul of codes of ethical conduct, no matter how rigorous. Along with generous salaries for executives, sizeable and well-compensated staffs, or international site visits for board members, these practices are simply standard operating procedures for large, complex nonprofits.  And yet the public is perplexed and disappointed whenever events conspire to make such practices visible.  That’s because they contravene the public’s still-powerful conviction that the essence of the nonprofit realm is smallness, neighborliness, and charity.  

Unhappily, a great deal is happening within the sector today that may only make the public confidence problem worse.  Nonprofits are entering the marketplace with business ventures of their own, often lured or shoved by their foundation supporters.  But in some cases they end up adopting the worst characteristics of bottom-line big business, putting “profits before people.”  We have only begun, for instance, to feel the public and Congressional backlash against non-profit hospitals, whose market-dictated fee structures produce the appearance of actually overcharging those whom they were intended to serve in the spirit of charity. 

As everyone knows, the largest nonprofits today have also come to rely heavily on government funding.  Consequently, as they seek to comply with a stifling web of regulations, nonprofits begin to take on the trappings of distant and unpopular government bureaucracies.  They also come to have -- not to put too fine a point on it -- a vested interest in sustained and increasing levels of government taxing and spending.  The leadership of the nonprofit sector now sees its fate as inextricably linked to that of big government, and has become ever more openly committed to fighting on its behalf.  As Independent Sector president Diana Aviv put it in her inaugural address: “We should be fighting for substantial and sustainable support from the federal government and the states . . . whether that includes rolling back the massive tax cuts of recent years or increasing public revenues in some other way.”  Whatever the substantive merits of such proposals, wedding one’s own credibility to that of big government at least doubles the g-force dragging against efforts to buoy public confidence in the sector.

To some degree reflecting these developments, the nonprofit sector is rapidly professionalizing itself.  That might seem to be an unalloyed good.  But as ever more nonprofit positions are filled by trained experts, who are graduated in ever larger numbers from the swelling list of centers for nonprofit management education, the once-close link between the everyday citizen and the nonprofit organization is weakened even further.  In large nonprofits, volunteers have long since ceased performing the critical service functions.  But today even the interaction with the community is put in the hands of professionals.  Fund-raising is often done by experts, not by enthusiastic volunteer staff or board members.  Even volunteering itself is being professionalized.  We hear more and more about “volunteer management” – as if volunteers were a somewhat balky resource requiring expert processing before they can be useful, rather than the heart and soul of the sector.

Now, many nonprofit experts today argue that the best way to restore public confidence in the face of these developments is not to reexamine our own behavior, but rather to attack the unrealistic, foolish, mythical expectations that lead the public to judge that behavior so harshly.  It’s time to tell the American people that, in Lester Salamon’s words, this is “no longer your father’s nonprofit sector.”  As he argues, “America’s charities have moved well beyond the quaint, Norman Rockwell stereotype of selfless volunteers ministering to the needy and supported largely by charitable gifts,” though regrettably “popular images remain rooted in this older image.”  We need to get beyond the “ritualistic celebration of charitable giving and volunteerism,” in an effort to bring “popular perceptions into better alignment with the realities that now exist.”

But what would that confidence-restoring “realistic” message sound like?  “Yes, we’re big, complex, professionally managed organizations, not at all like quaint neighborhood barn-raisings, and more like big corporations and big government.  Get used to it.”  Would such a lecture, however soothingly delivered by sophisticated professionals to the amusingly naïve general public, rebuild public trust in the sector?  Doubtful.  Not only is it patronizing.  It also asks the public to understand and embrace a bewilderingly vague and complicated statement of purpose.  The public must now accept that the sector isn’t what they thought it was, instead it’s becoming like the other sectors, but it still does . . . something . . . that’s different from and better than what they do. As for the “something,” to quote Buffalo Springfield, “what it is, ain’t exactly clear.”

And that, finally, is the real problem facing the sector as we try to restore the confidence of the American people in what we do.  It’s hard even to explain, much less defend, to the public the “something” we do, because we can no longer explain it to ourselves.  We seem to have lost our bearings, our fundamental sense of direction or purpose, the ability to say what it is we do that is essential, unique, and indispensable to the Republic. 

Perhaps instead it would be useful to revisit the assumption that we must throw away our old, sturdy, well-defined self-understanding for a new, ill-defined one.  Other sectors of American society, after all, have found ways to cope with the animus against bigness by moving away from remote, complex, professionalized, centralized organization, toward decentralized, immediate, relationship-based, informal “networks.”  Big corporations come to be challenged by small, nimble start-ups; big government is challenged by decentralist Republicans and “reinventing government” Democrats; big medicine is challenged by traditional, home-based self-help approaches; big media is challenged by blogging and the internet; big education is challenged by charter schools and home schooling. After observing the fate of the American automotive industry in the 70s, most sectors have learned that condescending lectures about “we’re big – we’ve don’t have to care” are no substitute for serious efforts to adapt to the American aversion to organizational size.

Certainly, at least one part of the nonprofit sector, namely, the faith-based institution, is learning to recapture smallness and immediacy in the face of largeness and complexity.  For much of the 20th century, large mainline denominations sought to adapt themselves to the secular, professional world by softening their convictions, lowering creedal demands on parishioners, and assuming the managerial techniques of large modern organizations.  They also watched their pews empty. 

Today, however, we are in the midst of a renewal of “spirituality in America,” as a Newsweek cover story recently put it.  Its most visible feature is, perhaps, the rise of the mega-churches – congregations that may fill auditoriums with ten or fifteen thousand seats.  While outside observers typically notice first this bigness -- the sprawling, mall-like structure swamped by teeming masses of worshippers on Sunday -- the deeper meaning of the megachurch, they note, is to be found elsewhere.  It’s really in the church’s small, intimate, spiritually intense groups, meeting throughout the week, designed to address the full range of human needs:  spiritual sustenance, child care, job search, education, recovery from addiction, just filling the lonely hours.  As a recent article in Mother Jones put it, “By taking on roles as various as those of the neighborhood welcome committee, the Rotary, the corner diner, the country club mixer, the support group – and, of course, family and school – megachurches have become the tightly knit villages that many Americans think they grew up in.” 

The faithful in these houses of worship often regard giving – perhaps to the extent of tithing – to be not a burdensome chore, but an essential part of their relationship to God and his community.  And members are asked to do more than simply write generous checks to support professional clergy and providers of services.  They are asked – no, they consider themselves mandated by their God – to become actively, immediately, personally engaged in charitable service to others.  They must become the Good Samaritan.  There is no existential wringing of the hands about this purpose.  The newly vibrant churches are unlikely to be distracted from their central, spiritual and charitable missions by ancillary profit-making enterprises, or by the pursuit of government grants for service-delivery. 

To the extent some do so become distracted, their pews and enrollments lists, too, will soon empty, as the televangelists discovered in the wake of the Jim and Tammy Faye Bakker scandal in the mid-80s.  This clarity of purpose fuels enormous grassroots energy, and draws citizens by the thousands into burgeoning small groups and ministries.  For them, voluntarism, charity, neighborliness, and community are not quaint, risible, Norman Rockwell throwbacks to yesteryear.  They are living, breathing, essential expressions, in pastor and author Rick Warren’s now famous phrase, of the “purpose-driven life.”  And this is occurring across lines of race, income, educational status, and denomination, in the very midst of a complex, sophisticated organizational milieu that, the experts tell is, had eradicated forever the essential preconditions for the “tightly knit villages” people “thought they had grown up in.”

There’s a deeper significance to today’s spiritual resurgence:  similar such moments throughout Anglo-American history have had profoundly transforming and energizing consequences for civil society, or what we today know as the nonprofit sector.  Those moments mobilized citizens behind new movements for social change and reform, and created wholly new modes of organization to reach those purposes.  As we were reminded by Adam Hochschild’s recent book Bury the Chains, a history of the English origins of the antislavery movement in the late 18th century, a faith-based movement of Quakers and evangelical Anglicans swelled from twelve impassioned men meeting in a London printers shop in 1787, to a vast and successful crusade to abolish what had once been considered an indispensable cornerstone of the economy of the West.  Along the way, new methods of organizing, mobilizing, and institution-building were invented: "Each of these tools, from the poster to the political book tour, from the consumer boycott to investigative reporting designed to stir people to action, is part of what we take for granted in a democracy," Hochschild writes. "Two and a half centuries ago, few people assumed this." 

So likewise for all subsequent great movements of reform, from abolition to prohibition to the civil rights movement.  Each of these were rooted in vital spiritual traditions, and each of them spun off new, unprecedented, sometimes wildly unorthodox organizational forms, which overturned expert expectations about the way citizens were likely to assemble and behave.  In the early 60s, the prominent theological Harvey Cox scanned the staid, comfortable, undemanding, and increasingly empty mainline churches, and could imagine nothing other than the coming of “the secular city,” a civilization drained of religious belief.  More recently, he was compelled to write Fire From Heaven, explicitly rescinding the secular thesis.  Now the story he told was about a completely unanticipated Pentecostal movement, which had swept the world and was beginning to have profound and largely beneficial effects everywhere on culture, politics, and society.

This spiritual resurgence – and the often unanticipated organizational and institutional consequences it is likely to have – presents a deep challenge to the nonprofit sector and its effort to recapture public confidence.  Many of today’s most significant nonprofits were, of course, born precisely in moments of religious upsurge in the past.  That would seem to prepare them well to harness the energies of today’s resurgence.  But as corporatization, bureaucratization, and professionalization have worked their changes over the years, the spiritual zeal of the founders has been replaced by the methodical techniques of the managers.  Indeed, modern nonprofit managers are often embarrassed about or ill at ease with the original religious impulse at the root of their organizations.  Writing in the secular 60s about foundations, Warren Weaver noted that while it was once said that “religion is the mother of philanthropy,” today “religion is more accurately to be referred to as the unobtrusive great grandmother of philanthropy.”  A great grandmother, incidentally, that many wish to keep locked in the attic.

Edging uneasily away from spiritual origins coincides, of course, with Salamon’s suggestion that we grow up, stop spinning pleasant tales about the sector’s voluntarism and charity, and embrace some other, newer, if scantily sketched, purpose.  But the irony is that this advice comes at the precise moment when Americans are evidencing an ever greater hunger for spiritual sustenance through connectedness, community, and charitable engagement, which was once the peculiar province of the nonprofit sector.  And people have made it clear that, if the secular nonprofit sector no longer wishes to meet that need, they can and will meet it elsewhere, that is, within the religious sphere, where indeed new modes of organization have arisen for just that purpose. 

The nonprofit sector may be able to talk people out of expecting much from its agencies by way of voluntarism, charity, and community.  But the notion that cultivating a new, more realistic image of the sector will restore its standing with the public overlooks this fact:  right next door stands a vibrant, charitable, voluntary faith community, which by its very existence gives the lie to sophisticated explanations about why such a sector can no longer exist.  The unflattering comparison is unlikely to build confidence in the nonprofit sector.  In the final analysis – just as with the auto industry -- people are more likely to take their business elsewhere, so to speak, where their needs are met rather than patronized or dismissed.

It’s additionally ironic that the nonprofit sector should downplay its roots in voluntarism and private charity at the precise moment the now-legendary multi-trillion dollar intergenerational transfer of wealth may be underway.  It promises to make available vast new private-sector resources to the foundation and nonprofit world.  The impending retirement of baby boomers, as well, could make millions of volunteers with considerable professional skills and disposable income available to the sector.  As has often been pointed out, most trends over the past century – everything from television to longer workweeks to women moving into the workplace – have subtracted time and energy from the civic sector.  The new availability of boomers wondering what to do with twenty remaining years of good health may well be the first significant modern trend that actually adds human time and energy to civil society.  But these potential resources are unlikely to be attracted by a sector that, with remarkably bad timing, dismisses its own past as a Norman Rockwell fantasy, in the name of reinventing itself as a profitable enterprise or as a quasi-governmental agency.

Is there another approach?  I would suggest that the sector might consider revisiting its own assumptions and behavior, before attempting to change public expectations of them.   This is the central question:  might it not be possible for the nonprofit sector to refound itself upon, rather than rejecting, its once-central values of voluntarism, charity, smallness, face-to-face relations, neighborliness and community?  If other sectors of society -- which became large, centralized, and professionalized earlier and more comprehensively than the nonprofit sector -- have managed to spawn trends toward smallness, immediacy, and community, why can’t the nonprofit sector, where such values once comprised its very reason for being?  Rather than regarding its historical rootedness in faith as a source of embarrassment, why can’t the nonprofit sector draw on it as a source of strength -- a proud tradition that gives it an edge in the effort to meet growing public yearning for spiritual purpose or meaning?

I suspect that no part of the nonprofit sector has a greater stake in confronting these questions than its fundraising executives.  The notion that public confidence in the sector could be significantly enhanced if only fundraisers pledged to be more honest, transparent, and ethical, compels them to bear far too great a burden of expectation.  To repeat:  the primary public relations problem for the sector isn’t unethical behavior (though, of course, that never helps.)  It’s rather that the sector’s otherwise ethical standard procedures no longer accord with enduring public expectations, whenever events compel a comparison.  Standing at the front door of nonprofit agencies, fund-raisers are more likely than most to have a sense of the discrepancy between organizational reality and public expectation.  And I suspect they fully appreciate how flawed is the advice that support for the sector can only be increased by talking people out of expecting too much from it. 

At the same time, of course, fundraisers play a key role in helping an agency develop and articulate its statement of purpose.  They understand the power of the “myth” of a sector rooted in voluntarism, charity, and neighborliness, and how critical it will be for harnessing the spiritual and voluntary energies and the new financial resources that may either revitalize the sector, or, flowing elsewhere, render it obsolete. 

And so fundraising executives may be in the best position to pose to their own organizations the kinds of radical questions that now need to addressed – radical in the true etymological sense that they go “to the root” of an organization’s understanding of itself.  That promises to be a difficult and demanding task. But in the final analysis, public support for and confidence in the sector cannot be restored by downgrading the sector’s age-old vision of voluntarism and charity to accord with institutional reality.   It can only be restored by serious efforts to upgrade institutions to accord with that still-potent and compelling vision.