PART 1
The Depletion of Value
1
A BORING ASSIGNMENT
āThis sounds about as exciting as watching grass grow,ā muttered Nick Costello to himself. A stringer trying to catch on with one of the New York papers, heād just gotten off the phone with Melissa Horowitz, the metropolitan editor at the Gotham Gazette.
āI want you to check out the Human Service Alliance,ā sheād said. āPete Morrissey, who runs one of the big social service agencies, has been after us for years to see life on the inside of their organizations. Heās complaining we donāt see how hard it is to keep things afloat. He says business models donāt fit what they have to deal with.ā
Thereād been a pause on the phone as she responded to one of her reporterās queries. āWeāve heard that cutbacks are hitting agencies hard over the next 5 years, given this economic downturn. It canāt hurt to take a look at what theyāre up to.ā
āIām happy to take your assignment, Ms. Horowitz, and I appreciate your call. But I donāt see the hook youāre looking for. Thereās a story every month or so on whatās happening to the poor.ā
Nick had hoped he didnāt sound indifferent, but it would be the kiss of death to his journalistic career if he turned in a 5,000-word article that had been written a hundred times before or, even worse, was boring.
The editor had laughed. āNo, no, I donāt want that kind of āneeded services for the poorā piece. Iām after something different. This alliance isnāt some grass-roots operation doing their normal advocacy thing. Itās made up of executives; the players in social work, mental health, health; and even some educators. Theyāre trying to see if they can set up an operation like the National Association of Manufacturers. My contact said theyāve got to get people to see that what makes them tick isnāt the same as big business, even though they run operations that are just as large.
āIf thatās what they want, then letās find out how they really manage. Morrissey said he got his people to agree for us to look inside. Hell, his place had $50 million in contracts. Thatās no fly-in-the-water storefront. So I want to see how they really run things, whatās so different between them and a profit-making company. You get to sit in on their meetings, see how they make decisions. I want to know the āwho, what, how, and whyā of their management structure. Look at their decision making, how they work as a team when faced with hard decisions. See in what ways they do and donāt compare to GE or Microsoftāāsheād laughed againā ābesides the money. It may take you awhile, but then weāll know. Are you interested?ā
āOf course I am,ā Nick had responded untruthfully. āYou said it may take awhile. Can I put in for per diem and expenses?ā
Hearing the affirmative, he had relaxed a bit, as had the worry lines around his eyes. Freelance work had aged him since heād hit 30 a few years ago. I may end up bored but not broke, he had thought.
Looking back 2 months later, Nick had to laugh at his reluctance. Heād had no idea at the time that the most boring assignment heād ever been given would turn out to be one of his best.
2
HALF-EMPTY? HALF-FULL?
āWelcome to our world,ā smiled Pete Morrissey, as he invited Nick Costello to sit in on an Alliance membersā breakfast meeting. Pete had debriefed Nick over the phone the day before on what the Alliance was up to. Its long-term goal was to raise enough money for both a lobbying firm in Washington and a significant advertising/public relations campaign that could make the Allianceās nonprofit cause better known. From there it hoped to attract private and public support for its work. The breakfast group was a subcommittee of five members working on what kind of marketing campaign they wanted and how much it would cost.
A local gourmet coffee shopās breakfast treats were neatly spiraled around the mahogany table in a small, attractive room off Peteās executive suite. The shiny leather furniture had the worn, baggy creases of frequent use. Pete invited Nick to join the four others selecting from the bagels, muffins, and fruit in front of them. Nick decided to go last, making sure he didnāt take too much.
āWe rotate these meetings at each of our places,ā said Frank Churchland, extending a beefy hand whose grip gave iron a weakened meaning. āThis way we share the costs, even when theyāre small. As youāll see, it all adds up.ā
A large heavyset White man who ran one of the largest mental health facilities in the state, Frank took a pumpernickel bagel and lathered a generous amount of cream cheese on both slices.
āItās not that weāre cheap, just that nonprofits have next to nothing in the way of extras in their budgets. If we buy bagels and cream cheese one time, it means thereās a little less for toner for the photocopy machine.ā
Nick looked over at Frank and nodded. Please Lord, he thought, I hope this isnāt going to be a long whining session masquerading as a power breakfast.
Nick met the others in quick succession as coffee was poured into paper cups. Jorge Pacheco, a Puerto Rican leader of one of the cityās largest Catholic child welfare agencies, gripped his hand tightly and nodded warmly, his strong Indian features breaking into a smile. Jason Levy, the only man wearing a three-piece suit, was chief executive officer of a nonprofit hospital. His right hand holding a large bran muffin topped with jam, he used his left to squeeze Nickās arm. They both laughed at the awkward moment, helping Nick relax. Last to greet him was a tall African American woman, Helen Jacques, whose skin was the color of mocha. The head of a medium-sized multiservice agency, she had taken a small plate of fruit and placed it next to a large cup of water. Smiling so much that her eyes seemed to crinkle, she made room for Nick at the table next to her.
Happily, Pete dispensed with formal introductions quickly and got down to business right away. āMelissa Horowitz agreed to let Mr. Costello sit in on our meetings with the proviso that he gets access to whatever he wants. Theyāre interested in telling our story as a comparison between how big business and big human service run things. Itās not going to be about whatās happening or not happening to our clients.ā
āThatāll be easy,ā replied Jorge quickly. āBig business sends their new managers to Harvard Business seminars once a year; we send āem to Lobby Day in the state capital.ā
He was referring to the annual trek that human service groups in every state make to their capitals regarding the yearly appropriations process. After weeks of preparation, midlevel human service professionals load buses at 5 a.m. with clients, line staff, and volunteers to meet legislators and their staff members to press their case for more funding. People arrive back home that evening around 8 p.m. Not a lot of work takes place the following day.
āJorgeās making an important point, Nick. Human service people donāt have budgets for extras, whether itās bagels and cream cheese or training seminars on quality systems improvements.ā
Speaking deliberately, Jason pressed his fingertips together. āWe canāt just take those items off as simple business expenses for tax purposes. Every dime is being monitored by some fiscal auditor who wants to know why this bagelās 65 cents isnāt being spent on services for clients.ā
Noticing the didactic turn things were taking, Pete interrupted the discussion. āI think Nick will figure these things out as we just go about our work.ā
He looked over at the journalist. āHow about we go through our agenda, and if there are any questions after each item, you can ask?ā
Relieved, Nick quickly responded yes.
The group quickly got down to business. Jorge gave a brief report on Alliance membersā expertise in marketing. āExcept for Jason and the folks with health care facilities, weāve found that nobody in human services knows anything about marketing. Schools are public and not allowed to do that. Nobody in child welfare would be caught dead advertising. What are we supposed to say, āCome, leave your neglected child with us!ā? Multiservice agencies report they have no budgets for marketing, either.ā
He paused. āSpecific programs like after-school or special needs groups spend a few hundred dollars on outreach. Flyers and posters, that kind of thing. No āZoom-Zoomā campaigns like Mazda has for its cars.
āSo, we need to look to our health care providers for whatever expertise we have.ā
Jorge paused for a second, seeming to remember something. He smiled mischievously at Helen. āThem and Helen, of course.ā
The group collectively chuckled, surprising Nick. Obviously composed, Helen said nothing as she sipped her water. Nick made an extra note on his pad. What expertise did she have?
āThe next agenda item is how much a 3-year campaign would cost.ā
Pete, a man of quick movements whose hands were rarely still, had no problem moving the meeting along. His finger pointed to the paper in front of him and tapped it three times. Without his smile, the taps would have signaled irritation.
Jason sighed as he reviewed the papers in front of him. āWell, the teachersā union spent $1.5 million on an advertising campaign for better salaries last year alone. Our hospitalās advertising budget averaged $700,000 per annum over the last 5 years.ā
He looked over at Frank, who had his own sheet of paper in his hand. āFrank, what does a lobbyist cost?ā
āA state lobbyist used by different trade groups can run between $300,000 up to a million a year for the private sector boys.ā
He looked over at Nick. āWe canāt charge members those kinds of union dues, and we canāt promise any shareholders itās a worthwhile investment thatāll bring us a bigger market share and higher profits later. That Manufacturers trade group has 14,000 members. In this state weāre starting with 50.ā
Pete interrupted. āLook, we went into this knowing we had a fight on our hands. Most of the American public thinks human services are where the slightly less intelligent serve slightly poorer people who ought to be out looking for a real job. Why do you think most Americans think the private sector looks so good? Itās because theyāve been fed a bill of goods on how mediocre we are.ā
He looked at the rest of the group, his fingers tapping once again. āGiven the situation weāre in, we have to approach our boards, engage in fundraising, and make this Alliance happen! America has to find out nonprofits and publics are worth it!ā
Frank nodded in agreement, his silver hair falling onto his forehead. āI agree, I agree. But weāre in trouble. I was just stating what we know. We donāt have money to do things that companies can do. I know weāve got to take this on, but Iām the pessimist in the group. I find pessimism keeps human services executives and educators in the real world.ā
He dabbed a small piece of cream cheese from his upper lip as he looked over at Nick, who was busy taking notes. āNick, letās face it: A lofty mission statement doesnāt mean we have lots of money.ā
Pete felt compelled to respond again, even though he was the chair. āI donāt think we disagree, Frank. I know weāve got a crisis. But itās a matter of perception. Youāre saying the glass is half-empty and weāre losing drops every day. Iām saying weāre half-full and have to work even harder to keep it that way, getting a little more added to the glass.ā
He paused again and looked at the group, fingers working the table. āHalf-full sells a lot better than half-empty.ā
Nick noticed others nodding in assent.
Helen raised her hand to speak. āPete, you asked me to be a part of this work group because you said you respect what my agency is doing. So Iām here, even if weāre a quarter the size of everyone else around the table. Weāre going through the same cuts, too. Iām not denying it can be difficult.ā
She reached down and pushed her empty fruit plate away. āBut difficult doesnāt mean thereās a problem.ā
The men at the table began to look perplexed as she went on. Even Peteās fingers took a break.
āTo tell you the truth, we have a whole different way of talking about things that helps us day in and day out.ā
Helen picked up her paper cup, now empty. Taking the silver carafe next to her, she poured just enough water for it to be at the midway point. āHalf-full? Half-empty? To us, itās neither. For us at South Bronx Multi-Services, the glass is always full.ā
She took a long drink before placing the cup carefully in front of her, turning it around and around. āEven now.ā
The men around the table became silent. Jorge looked toward Pete and then over at Jason, who was staring intently at Frank. It was eerily quiet. If playing cards had been on the table instead of bagels, an outsider might have thought it was the final draw in a game of Texas hold āem, eve...