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WHAT NON-PROFIT SOCIAL SERVICE AGENCIES ARE FACING:
CASE STUDY OF THE PITTSBURGH PROJECT
Introduction
With the dramatic development of the nonprofit sector in the past 20 years, we
now live in a world where non-profit agencies provide services in almost every field –
health care, education, social service, etc. It is nearly impossible to clearly define this
sector because of its extreme vastness and diversity, and the blurred boundaries between
the agencies in this sector and those in other sectors make citizens feel that nonprofit
social service agencies are the nonprofit sector.1
The faith-based initiative of Bush
Administration further complicated this arena. To bring clarity to the sector, we ask
several questions. What are the current opportunities and challenges for social service
organizations, especially faith-based agencies? How do these organizations respond to
these challenges? What is the future of this sector? These are all urgent problems for
nonprofit social service organizations to address.
In this paper, we will first map the field of social services, giving a brief
introduction of the types, sizes, opportunities and challenges for agencies in this sector.
We will then focus on the faith-based initiatives of the Bush administration. Among the
challenges for social service nonprofit agencies, we will mainly address revenue
enhancement, volunteer management, executive director succession and
professionalization of faith-based organizations (FBO). A case study of The Pittsburgh
Project (TPP) will help illustrate how small FBOs respond to emerging problems. Finally,
some suggestions to some possible problems we realized during our interview with TPP
Executive Director, Saleem Ghubril.
1
Mapping Non-Profit Organizations in Social Services
Social service agencies provide food, shelter, daycare and assist people with
problems around domestic violence, immigration, AIDS and so on. Many agencies are
small and ill equipped to respond to accountability; are sensitive to government
regulations and funding; and yet, are vital because they serve the disadvantaged (poor,
minorities) and expand government assistance (HHS, HUD).
Social service agencies can be categorized into the informal (small, community-
based groups dependent on cash and in-kind donations), the traditional and professional
(Red Cross, Catholic Charities) and the recent (respondents to urgent social problems and
dependent on government aid). Though many depend on government aid for survival, not
all accept it because of religious or philosophical principles. Many agencies’ services
extend into other fields, but the largest are individual and family services.
Challenges and Opportunities
Various factors have provided challenges and opportunities to social service
agencies: women’s movements, deinstitutionalization of the mentally ill, elimination and
creation of government funding, welfare reform and, most dramatically, increased
competition from for-profit agencies. While employment in the social services sector
increased 134%, for-profit agencies made significant inroads into child daycare and
residential care.2
Accountability, evaluation, and outcome and performance evaluations to
funders and the public also pressure social service agencies.
Priorities for strengthening an agency’s ability to achieve its mission are
fundraising, financial management, staffing, new program development and increased
community development.3
Of social service agencies’ challenges and opportunities, we
2
chose four: revenue enhancement, volunteer resources, professionalization of faith-based
organizations and executive director succession. We will first say something about faith-
based initiatives.
Faith-Based and Community Initiatives
FBOs also deal with another challenge/opportunity that secular-based social
service agencies do not – the newly established White House Faith-Based and
Community Initiatives (FBCI). These initiatives, created by the Bush Administration, and
subsequent acts passed by the House and Senate, do not allow social service agencies “to
discriminate against beneficiaries of services on the basis of faith, but [does allow them]
to discriminate in hiring and in selecting board members on the basis of religious faith.
They are not allowed to use federal grant or contract dollars to fund any ‘inherently
religious’ activity, and they must separate ‘in time or location’ services funded by direct
governmental aid from ‘inherently religious activities.’”4
Looking at an FBO’s bottom line, one understands why they are enticed by FBCI.
“40.6% of FBOs … reported that operating expenditures exceeded revenues whereas only
28% of secular agencies reported this one-time financial imbalance. Thus, in the most
recent year of the current economic downturn, FBOs seem to be more challenged than
their secular counterparts in balancing revenues and expenditures.”5
Although a lower proportion report success in receiving government funding in
comparison to their secular counterparts, it should be noted that secular agencies submit
“more applications for government funds and, therefore, a greater proportion … report
being both successful and unsuccessful in their individual grant applications.”6
FBOs,
3
however, “plan to exert ‘much more effort’ or ‘somewhat more effort’ to seek
government grants or contracts in the next three years.”7
Though FBCI are relatively new, government funding to FBOs is not. Some states
have long accepted FBOs as government partners while others have not. Since 1996,
when the Welfare Reform Act took effect, changes have been incremental. “Relatively
few states have undertaken high-level administrative initiatives, and fewer still have
enacted legislation implementing Charitable Choice language. … States have reacted
more positively to the Bush administration’s efforts to raise the profile of FBO-provided
social services than to the 1996 legislation.”8
Pennsylvania has undertaken no significant
initiatives.
Smith and others acknowledge that while FBOs like Lutheran Social Services and
Catholic Charities have been receiving public funds for more than 100 years, others do
not want the funds because it may mean a change in their operations. “FBOs that do not
receive government funding are more inclined to report that faith has an impact on staff
training and client advice … [and] … that they use religious values in staff training and
… encourage clients to use spiritual values to change their behaviors.”9
The Pittsburgh Project
The Pittsburgh Project (TPP) is a 19-year-old, urban, neighborhood-based, Christian
community development organization that trains servant leaders and upholds the dignity
of vulnerable homeowners. TPP develops servant leaders through afterschool and
summer programs, urban service camps and retreats for Northside and other children and
young people throughout the country. TPP upholds the dignity of vulnerable homeowners
through free home repairs, visitations and links with social services and churches.
4
Afterschool programs (BASIC and Reach Academies) for students in grades 1 –
12 emphasize improvement of academic performance, and provide cultural activities and
educational field trips. Program coordinators are certified educators. Teachers are trained,
caring adults. Student to staff ratios are about 10:1; lower when volunteer tutors assist.
Students receive 45 – 60 minutes of homework assistance and computer instruction.
Students grow in Christian discipleship, build relationships with students and adults, and
acquire conflict resolution skills through Bible study and life application discussions.
The most motivated and talented high school students who complete BASIC and
Reach are offered Leader-In-Training, a four-month job training process, after which they
take positions in ministry alongside staff. Training includes one-on-one mentoring, small
group Bible study and discussion, mission trips and leader workshops.
In the summer, teens perform volunteer labor for 130 in-need homeowners.
Projects include drywall, painting, roofing, pointing, plumbing, handicap construction
and cleaning. Homeowners must reside in Pittsburgh or a nearby borough, own and live
in their homes, and document income within 150% of federal poverty guidelines. Priority
is given to those over 60 and in poor health. Work and materials are free. Crews worked
on 900 homes in 35 neighborhoods since 1985.
TPP has one revenue-generating initiative – the Charles Street Café. It buys beans
from Costa Rican coffee growers. Its proceeds benefit the Project’s ministries.
TPP is located in the former Annunciation School and Church. A registered
501(c)3, TPP holds membership in Evangelical Council for Financial Accountability,
Evangelicals for Social Action and Christian Community Development Association. It is
managed by a 14-member board of directors and completes an annual independent audit.
5
CEO Saleem Ghubril does not see himself as a service agency manager, but as a good
neighbor, having lived in Perry South since 1985.
Challenges and Opportunities Facing The Pittsburgh Project
Of the challenges and opportunities facing social service agencies, our interview
surfaced four that effect TPP: resource development, volunteer management,
professionalization of faith-based organizations and executive director succession.
Revenue Enhancement
Like any social service agency, TPP has struggled in the past few years. FY 2002
indicates the impact of 911, but in three of the four years shown, expenses exceeded
revenues. In addition, net assets decline by $338,861. We asked Ghubril how TPP plans
to deal with the current fiscal situation.
1999 2000 2001 2002
Contributions 569,440 905,703 833,025 677,805
Noncash Contributions 0 19,642 10,711 15,850
Program Service Revenue 395,258 440,581 456,317 498,452
Interest 2,033 435 2,315 445
Total Revenue 966,731 1,366,361 1,302,368 1,192,552
Program Service Expenses 1,015,589 1,076,834 1,267,432 1,318,591
Management 32,354 46,669 45,074 33,603
Fundraising 51,568 122,465 57,016 99,678
Total Expenses 1,099,511 1,245,968 1,369,522 1,451,872
Excess/(Deficit) (132,780) 120,393 (67,154) (259,320)
Net Assets beginning of year 770,264 637,484 757,877 690,723
Net Assets end of year 637,484 757,877 690,723 431,403
1999 2000 2001 2002
Current Ratio 13.7 16.2 14.4 2.1
Days Cash 42 143 76 38
Total Margin -13.7% 8.8% -5.0% -22.0%
Operating Margin -10.6% 11.2% -2.4% -18.4%
Ghubril states that 35% of TPP’s revenues come from fees, service camps and the
café; 30% from foundations; 20% from individual donors, churches and directors. He
6
plans to deal with the current deficit by increasing fees, decreasing TPP’s dependency on
philanthropy and involving the board in revenue enhancement.
Fees and Service Camps
Social service agencies, a fortiori FBOs, rely on contributions and program fees,
but unlike daycare and rehabilitation centers, TPP’s fees (program service revenue) come
from camps and retreats. “Many nonprofit agencies find it very difficult to raise much
revenue from client fees, because most clients are poor or disadvantaged,”10
as are TPP’s;
but camp fees come from churches located outside Perry South. Of nine weeklong camps
that accommodate 165 participants, eight are filled.
One Day Weekend Week (Sr. Hi) Week (Jr. Hi)
$20 $75 $325 $235
Café
TPP made two forays into social ventures. A silkscreen business closed because it
lost money. The Charles Street Café serves gourmet coffee, baked goods and drinks. It
created a few jobs, pays a living wage and provides a service to the staff, volunteers and
the neighborhood. According to Ghubril, it will make a profit next year.
Foundations and Individual Donors
TPP’s 2002 Tax Return shows that 57% of its revenue is from individual donors,
churches and foundations. Ghubril states that 30% of TPP’s revenue comes from
foundations. He wants to rely less on foundations and more on the public. To develop a
wider donor base, he believes board members must initiate opportunities and events so
that he or they can invite people to become regular donors.
7
We have several suggestions regarding TPP’s revenue enhancement. Ghubril’s
desire to increase the donor base through board initiatives is a straightforward approach
to TPP’s resource development. He admits that it is the board’s one weakness. He sees
donors as investors who have legitimate expectations. Donors expect to see a social
return on investment (youth leadership and improved grades and homes) and an
economic one (balanced budgets).
We suggest that TPP investigate how it could benefit from Bush’s FBCI. Ghubril
stated that TPP would not take government money if it were subversive to its mission. He
also recognizes that money to fix homes is not money to evangelize. FBCI may, however,
be an option especially with stagnant donations to United Way and other agencies over
the past decade and philanthropic institutions’ tighter restrictions on nonprofits.
Another suggestion is to form a strategic alliance with a business that could
provide materials for home repair. There is no current action on TPP’s part to address
this. To some, a strategic alliance is the NPO’s silver bullet. Strategic alliances, though
built on trust, do not always reach the integrative stage with the same success as
Timberland and City Year; however, they are worth investigating. A good start is having
the executive director and board study Austin’s The Collaborative Challenge. Though
filled with wisdom that comes with experience, we offer just two points of advice. First,
even if leaders share passion and inspiration to form a strategic alliance, the NPO must
“conduct a capabilities analysis to ensure that their competencies and resources match
their partners’ expectations … to avoid disappointment later.”11
Second, because the
leaders will deal with forces that pull apart the alliance, they must counter centrifugal
8
pressures with centripetal forces “developed around a shared mission and vision to draw
the two organizations together.”12
Because alliances are built not on contracts, but experience and genuine affection,
they may take years to form.13
Most donors are indifferent about these alliances, but are
concerned the activity is consistent with or advances the organization’s mission14
Hence,
if TPP forms a strategic alliance, it should be around a particular project, like
neighborhood enhancement. In addition, if the alliance enhances TPP’s revenues, it
should still maintain foundation support, increase fees for summer programs and
encourage board members to seek new donors. The best method to increase revenue will
come by educating prospective donors about philanthropy. Nonprofits must educate
people so that they see their modest, systematic financial contributions as their
investment in a cause.15
We also suggest TPP examine if volunteers could complete the work of paid staff
members. (We answer this in the next section.) FBO employees are paid similar or lower
salaries and benefits than those at similar organizations.16
TPP staffers are not paid
exorbitant salaries, and Ghubril’s salary is modest for the work he performs.
Lastly, we suggest Ghubril market TPP’s intellectual property. What he has done
is nothing short of remarkable in remaking the community. Ghubril sees TPP not so
much as a neighborhood organization, but rather as a community of good neighbors. Of
the 14 people on its board, five are community residents. Ghubril himself has lived in the
neighborhood for 18 years. Much of TPP’s success can be accredited to Ghubril’s
dedication to TPP’s mission, his Christian faith and street-level management. He
continues to do two things that we found in Mulroy:
9
“Spend time working in the target community face-to-face with
residents; and support, empower, and learn from community workers.
Community-based endeavors are intended to strengthen local
neighborhoods and residents. Frontline workers … had the bottom-up
perspective: the local knowledge derived from immersion in the
neighborhood. They were not only serving clients but were key partners in
building and implementing collaborative alliances in chaotic urban
neighborhoods.”17
Other issues not discussed but noted include the infrastructure of TPP. Major
renovations or unexpected repairs would burden TPP. To address this likelihood, we
suggest a separate capital campaign to deal with the planned or unexpected.
Volunteer Management
Volunteers save a significant amount of money for any organization. A 2002
study of Pittsburgh congregations reveals, “57% do not anticipate having enough staff to
serve additional clients, and 67% do not expect to be able to raise more funds to serve
additional clients. The participation of volunteers is consequently critical for operating,
and continuing to operate such programs. It is thus not surprising that 68% of the
respondents report relying upon 20 or more volunteers.”18
It would be safe to surmise that
social service agencies that serve the poor rely heavily on volunteers.
Nearly half the nation’s population volunteers 4.2 hours per week. Volunteers
expect certain considerations from the organization, and if those expectations are not met,
they become dissatisfied. Volunteers do not receive a paycheck, but view pay in some
symbolic way. Therefore, volunteer administrators must provide symbolic support,
recognition and appreciation, take interest in the volunteer’s life, offer timely and helpful
feedback on their efforts, and provide a supportive network of other volunteers.19
10
Although all of this underscores the need to hire a volunteer manager, only three
of five charities and one of three congregations with social service outreach activities
have a paid staff person. Among paid staff volunteer managers, one in three has not
received any training in volunteer management, and half spend less than 30% of their
time on volunteer coordination.
Volunteers make up the difference for the work undone by a paid staff. Secular
NPOs employ 19.3 full-time and 7.8 part-time staff. FBOs employ 28.9 full-time and
18.4 part-time staff.20
According to their 2002 Tax Return, TPP employs 47 individuals.
In our interview, Ghubril stated that TPP has 22 permanent paid staff members, 15 part-
time after-school staff and 40 summer staff.
Secular NPOs have 9.3 volunteers who give more than ten hours a week, 63.9
who give less than ten. FBOs have 34.3 who give more than ten hours, 141.4 who give
less than ten. Ghubril states that TPP has 120 volunteers, 15-20 each day, and 2000 in the
home repair program. It offers a 2½-hour training seminar for tutors, and a 2-hour
seminar for homeowner care.
Because social service agencies depend on volunteers to reduce costs, a volunteer
coordinator is essential. A paid volunteer coordinator “sends a powerful message to other
managers and employees regarding the significance and value organizational leadership
places on the volunteer component.”21
Among the duties are accountability for and
advocacy of the volunteer program, recruitment, publicity, administration, training,
management and recognition of volunteers.
Before Patti Ghubril became TPP’s Volunteer Coordinator, a position she has
held for the last six years, she volunteered as the Coordinator for two years. She now
11
works 30 hours per week. She began as a volunteer youth worker in college and worked
as a Training Manager for a mid-West department store chain. She employs her
professional skills in designing TPP’s volunteer positions. Before TPP, Ghubril directed
children’s ministry at a suburban church, which meant she coordinated a large pool of
volunteers. She regularly attends workshops to update her work. Her budget is $3,500.
Ghubril recruits at college volunteer fairs and churches, and accepts high school
and college students required to do service hours. In addition, TPP attracts volunteers
through Saleem Ghubril’s speaking engagements, TPP’s website, occasional media
coverage and by word of mouth. Over the past eight years (1996-2003), annual volunteer
hours for tutors increased from 600 to 4,004. Workday volunteer hours increased from
980 in 2000 to 1,240 in 2002. Special volunteers, e.g., day camp helpers, administration
and other projects, gave 195 hours in 2003.
TPP holds recognition celebrations at the end of each semester and will recognize
long-term volunteers on April 23. Ghubril does not take a ‘one size fits all’ approach to
recognizing volunteers. She looks for as many ways as possible to thank folks and
recognize their achievements. Volunteer feedback led to a monthly newsletter for tutors.
Ghubril complements the two-fold recommendation of developing a structure in
which adequate training programs improve volunteers’ abilities to complete tasks and
conveys a commitment to TPP’s mission, and assigns volunteers challenging work.22
Although TPP is handling well its need for volunteers who provide tutoring and
home-repair, we wondered if it would be feasible to cut expenses with fewer paid staff
members and more volunteers. From our studies, we concluded that such a move would
not save TPP much money and in the end prove to be detrimental.
12
Executive Director Succession
When we asked about his perception of the leadership body of TPP, Ghubril
seemed very confirmative and satisfied when he talked about the primary advantage of
the board of TPP—relationship. First, it refers to the close-knit relationship between
board members, board and executive director, and staff. Everyone in TPP is sharing and
committed to the same value and mission. Second, close relationship with the community
is another competitive advantage for TPP. While conducting their programs, they are not
thinking of themselves as professional service providers but good neighbors. And the
board of TPP is a good representative of the community, with 5 out of 14 board members
being from local community.
Another more important problem Ghubril mentioned about the management of
TPP is leadership succession, to be specific, the succession of Executive Director. For the
past 19 years, TPP has had only one Executive Director. As Ghubril said, the
organization just looks, smells and acts like him. To address this problem, Ghubril said
TPP is planning to have a new Executive Director by the year 2010. However, the
executive transition is not as not a simple matter at all. As Bradshaw Lynn writes, “The
success of the succession management process, as with other employee development
efforts, ultimately rests with commitment from top management.”23
As the only body
which has the authority to hire and fire executive director, the board of directors is the
leader of the whole transition process.
Allison used a more vivid analogy to describe this transition process as a process
of firing pottery. If it passes the heat test, it will become stronger, otherwise it will end up
broken. “If the board is prepared, has an appropriate composition in its membership and
13
supporting players, and uses a process that is well designed, the organization actually can
become stronger through the transition. It can emerge with renewed clarity of purpose
and an energized team poised for achieving success. Failure typically results in a poor
choice of a new leader and a fragmented, exhausted group of people.”24
Therefore, a close relationship could not be enough for an efficient board.
According to Kearns, besides accessibility and commitment to mission, desired
characteristics of board members also includes special talents and skills, constructive
problem solving, understanding the niche and leadership potential. However, “boards
generally have too little time, too little experience with nonprofit management principles,
too little expertise in the business of the organization (field of service), and too little skill
at governing as a group to be able to handle the governing role well.”25
To be the real
protector of the organization, the board should pay more attention to its own capacity
building. In this case, the board should be well prepared and take a strategic method to go
through the process of identifying appropriate candidate, competency development and
orientation of new position.
Professionalization of FBOs
As we mentioned before, most of NPOs in social service fields are small size
organizations engaged in service that help the disadvantaged groups. People believe that
work in this field needs no special skill and the key for the management of social service
organizations is just good intention. For FBOs especially, religious value will be the most
important factor for successful management. However, in recent years, the topic of
professionalization of NPOs has been a hot topic. As the external and internal
environment for NPOs development changes dramatically, it is believed that good
14
intention is no longer enough and professionalism is a necessary concept to be accepted.
Professionalization in human resource management and technology application are the
two main aspects.
During the interview, we were impressed by TPP employees’ commitment to its
mission. As Ghubril said, TPP will not do anything that jeopardizes its mission. He
acknowledged the importance to have a more efficient and measurable outcome with the
prerequisite that the soul of the mission should not be lost. We cannot deny the fact that
the positive attitude toward its mission has some relationship with employee’s
satisfaction and intention to remain with the organization. At the same time, however, as
the external competition become fiercer, can mission explain everything?
“Dissatisfaction with pay tended to override employee’s mission attachment as
explanation of why they may leave the organization. The implication is that mission
might be salient in attracting employees but less effective in retaining them.”26
According
to the result of an anonymous survey distributed to 991 employees of a non-profit youth
and recreation services organization with sixteen geographically dispersed locations,
mission attachment appears to be a valid consideration for younger, part-time employees,
but the intrinsic motivations run thin as full-time employees earn salaries that appear
noncompetitive to other organizations. As for TPP, although it is not experiencing a crisis
in attracting and retaining, it will be beneficial if more training and development for
human resource management is taken. While relying on mission attachment as a
management tool, TPP should pay attention to other factors for job satisfaction as well.
Besides mission attachment and job satisfaction, technology is also an important
tool for successful management. With an increased of demand for NPO services in the
15
social, economic and political sectors, modern technology, especially electronic
networks, holds the promise of innovation. Information and communication technologies
(ICTs) improve administrative and operational efficiency. More importantly, ICTs
reshape the organizational structure internally, reconfigure relationships across networks
of organizations, and strengthen relationships with individual citizens. It is not only the
scale and scope of information processing that the technologies permit that open up these
opportunities. The technologies also offer new dimensions in knowledge management
and organizational learning.27
Electronic networks are not simply vehicles for the storage
or communication of information, but powerful and sophisticated information
processors.”28
TPP seems to attach more importance to personal relationship than electronic
communication. It is not practical for a small-size NPO to invest a large amount of
money in electronic facility installation; however, it is important to realize that
information technology is meaningful in order to improve management efficiency. For
example, Ghubril said that TPP employees were hungry for training and further study.
The application of electronic network might provide them a good training method and
improve organizational learning.
Conclusion
Social service agencies will continue to provide significant service to our
communities throughout the nation and world. Though most will never be as large as the
Red Cross or Catholic Charities, these smaller agencies are as true to their mission as are
their larger brothers and sisters. Size notwithstanding, each will continue to respond to
16
people’s needs in ways that the business and governmental sectors cannot. For that
reason, social service agencies need and deserve our support.
Faith-Based Community Initiatives are new to many social service agencies that
are faith-based. It has been shown, however, that some FBOs have had a steady
partnership with federal and state agencies. Though some, including Smith, are wary of
FBOs accepting money from the government, we suggest that FBOs at least (thoroughly)
examine the possibility that such funding can further their mission and ease their
financial situation. If, however, acceptance means mission compromise, we suggest that
they not chase the money, for in the end, the agency’s conscience will rest.
As Smith has shown, social service agencies face stiff competition from other
NPOs and for-profit businesses. They must diversify ways of increasing revenue and
creating community wealth (beyond money) while they continue to rely upon private
donors, foundations and fees for support. Social service agencies will always need
volunteers. Most importantly, social service agencies need and deserve our support.
17
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Partnerships: Issues, Constraints, and Adaptions,” Nonprofit Management and
Leadership 14, no. 1 (Fall 2003): 47-77.
Olszak, Lisa M. “Profit Making in Nonprofits: An Assessment of Entrepreneurial
Ventures in Nonprofit Organizations,” Tropman Report 1, no. 5 (November
2002) http://www.forbesfunds.org.
The Pittsburgh Project. http://www.pittsburghproject.org
Quinn, J.B. The Intelligent Enterpirse. New York: Free Press, 1992.
Ragan, Mark; Montiel, Lisa M.; and David J. Wright. “Scanning the Policy Environment
for Faith-Based Social Services in the United States: Results of a 50-State
Study,” The Roundtable on Religion and Social Welfare Policy. Albany, NY: The
Nelson A. Rockefeller Institute of Government, State University of New York.
(October 2003) http://www.religionandsocialpolicy.org.
Shaw, Mary M. “Successful Collaboration Between the Nonprofit and Public Sectors,”
Nonprofit Management and Leadership 14, no. 1 (Fall 2003): 107- 120.
Smith, Steven Rathgeb. “Social Services.” The State of Nonprofit America. Ed. Lester
M. Salamon. Washington, D.C.: Brookings Institution Press, 2002.
20
Addendum
Interview Protocol for Saleem Ghubril, Executive Director, The Pittsburgh Project
March 2, 2004
1. The Pittsburgh Project (TPP) is a small non-profit organization (NPO) engaged in
community development, servant leadership, urban and youth ministry, etc.
“Social movements have created demands for new or expanded services such as
child daycare, rape crisis centers, domestic violence programs, and AIDS
services. Profound demographic changes … have produced widespread demand
for social services to cope with these changes.”29
As the executive director of
TPP, how would you address the new social problems that stem from continuous
social movements and demographic changes? What are the greatest managerial
challenges for you? When compared to your colleagues in other NPOs, FPOs
(for-profit organizations) or government agencies, you and your staff members
are not overpaid. How do you compete with those big, traditional NPOs and those
for-profit organizations that serve in the similar sector?
2. TPP depends heavily on volunteers and, according to IRS filings, accepts no
governmental assistance (?). If you do not seek government assistance, would you
explain your philosophical and theological reasons for not doing so? How would
you maintain financial viability without the program services revenue ($456,317
in 2001)?
3. Today, community, corporate, family and individual donors are placing financial
accountability and performance evaluations on those NPOs seeking resources. In
addition to financial audits and staff reports, what other measures are in operation
at TPP to demonstrate financial accountability and performance evaluations to
donors? To what degree are TPP’s Board members involved in the
implementation of these measures?
4. Welfare reform legislation of 1996 included a charitable choice amendment.
Subsequent to that, “President Bush proposed a faith-based and community
initiative that would expand the use of faith-based organizations far beyond the
welfare-related services targeted by the charitable choice amendment.”30
Will the
policies provide more or fewer opportunities to improve development at TPP? If
more, will that cause any negative influence on your autonomy? How will you
avoid that?
5. Coupled with that 1996 legislation is the fact that the majority of the people
served by TPP are poor or disadvantaged. Though TPP serves the poor and
employs residents of the community, what approach do you employ to serve as an
advocate for policy change without losing any of your autonomy? In accepting
any donations or major grants, in what ways have you been restricted or felt a loss
21
of autonomy? Who are those individuals (staff or board members) primarily
responsible for such advocacy?
6. You are quoted as saying that Councilwoman Barbara Burns’ legislation to place
modest restrictions on charitable activity in residential neighborhoods is “overkill
and very reactive” (Brian O’Neill, “Churches Should Minister to their Neighbors,
Too,” PG, 7/18/2002). Why do believe it is necessary to live in the neighborhood
where you serve?
7. One of the more difficult tasks that an Executive Manager faces is staffing the
NPO with the proper people. What is the status of human resources at TPP? What
measures have you taken to obtain, maintain and retain the best staff possible?
What keeps employees? Why do any leave? How many have left for work that is
more profitable?
8. In 2001, you launched the Charles Street Café and the Charles Street
Screenworks. What financial contributions have these two components added to
your income? Beyond any financial contribution, tell us what other benefit they
have? Do you feel any community pressure from other area FPOs who question
an NPO running a café and screen-printing business? What is your understanding
of the professionalizaiton of NPOs?
9. An efficient board is of great importance for the successful operation of a NPO.
What are the procedures and criteria of TPP to recruit new board members? Is
personal relationship an important factor? How does TPP attract board members
who are committed to its mission, have adequate oversight and monitoring of the
performance, and enough access to resources (funds, information, social network,
special skills and etc)? Sitting on other boards, e.g., Pittsburgh Partnership for
Neighborhood Development, do you ever find yourself in conflicting situations?
22
Endnotes
23
1
Steven Rathgeb Smith, “Social Services” in The State of Nonprofit America, ed. Lester M. Salamon (Washington,
D.C.: Brookings Institution Press, 2002), 149.
2
Steven Rathgeb Smith, “Social Services” in The State of Nonprofit America, ed. Lester M. Salamon (Washington,
D.C.: Brookings Institution Press, 2002), 157.
3
Kevin Kearns, Chisung Park and Linda Yankoski, “Comparing Faith Based and Secular Human Service
Corporations in Pittsburgh,” Tropman Report FBO Agency Study, 30, Table 40 http://www.forbesfunds.org
4
http://www.pewforum.org/faith-based-initiatives
5
Kearns, 8.
6
Ibid., 9.
7
Ibid.
8
Mark Ragan, Lisa M. Montiel and David J. Wright, “Scanning the Policy Environment for Faith-Based Social
Services in the United States: Results of a 50-State Study,” The Roundtable on Religion and Social Welfare Policy
(Albany, NY: The Nelson A. Rockefeller Institute of Government, State University of New York, October 2003), 8.
9
Kearns, 10.
10
Smith, 172.
11
James E. Austin, The Collaborative Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances
(San Francisco: Jossey-Bass Publishers, 2000), 174, 89.
12
Ibid., 65
13
Mary M. Shaw, “Successful Collaboration Between the Nonprofit and Public Sectors,” Nonprofit Management and
Leadership 14, no. 1 (Fall 2003): 118
14
Robert D. Herman and Denise Rendina, “Donor Reactions to Commercial Activities of Nonprofit Organizations: An
American Case Study,” Voluntas: International Journal of Voluntary and Nonprofit Organizations 12, no. 2 (2001):
166f
15
Campos Market Research and Droz and Associates, “New Economy Entrepreneurs: Their Attitudes on
Philanthropy,” Tropman Report 1, no. 4 (November 2002) http://www.forbesfunds.org.
16
Kearns, 27, Tables 33 and 34.
17
Elizabeth A. Mulroy, “Community as a Factor in Implementing Interorganizational Partnerships: Issues,
Constraints, and Adaptions,” Nonprofit Management and Leadership 14, no. 1 (Fall 2003): 61.
18
Greg S. Behr and Melanie DiPietro, “Social Services in Faith-Based Organizations: Pittsburgh Congregations and
the Services They Provide,” Tropman Report 1, no. 7 (November 2002) http://www.forbesfunds.org.
19
Steven M. Farmer and Donald B. Fedor, “Volunteer Participation and Withdrawal: A Psychological Contract
Perspective on the Role of Expectations and Organizational Support,” Nonprofit Management and Leadership 9, no. 4
(Summer 1999): 362f.
20
Kearns, 18, Table 10.
21
Jeffrey L. Brudney, “Volunteer Administration,” Understanding Nonprofit Organizations: Governance, Leadership,
and Management. ed. J. Steven Ott. (Boulder, CO: Westview Press, 2001) 333.
22
Irma Browne Jamison, “Turnover and Retention Among Volunteers in Human Service Agencies,” Review of Public
Personnel Administration, 23, no. 2 (June 2003): 129.
23
Dahlia Bradshaw Lynn, “Succession Management Strategies in Public Sector Organizations,” Review of Public
Personnel Administration 21, no. 2 (Summer 2001): 130.
24
Michael Allison, “Into the Fire: Boards and Executive Transition,” Nonprofit Management & Leadership 12, no. 4
(Summer 2002): 341.
25
J. Masaoka and M. Allison, “Why Boards Don’t Govern,” Taking Trusteeship Seriously. Ed. R Turner. Indianapolis:
Indiana University Center on Philanthropy, 1995.
26
William A. Brown and Carlton F. Yoshioka, “Mission Attachment and Satisfaction as Factors in Employee
Retention,” Nonprofit Management & Leadership 14, no.1 (Fall 2003): 5.
27
M. Castells, The Rise of the Network Society (Oxford, England: Blackwell, 1996); J.B. Quinn, The Intelligent
Enterpirse (New York: Free Press, 1992).
28
I. McLoughlin, Creative Technological Change: The Shaping of Technology and Organizations (New York:
Routledge, 1999)
Addendum Endnotes
29
Smith, 150.
30
Smith, 169.

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Pittsburgh Project Paper Paul&Xie

  • 1. WHAT NON-PROFIT SOCIAL SERVICE AGENCIES ARE FACING: CASE STUDY OF THE PITTSBURGH PROJECT Introduction With the dramatic development of the nonprofit sector in the past 20 years, we now live in a world where non-profit agencies provide services in almost every field – health care, education, social service, etc. It is nearly impossible to clearly define this sector because of its extreme vastness and diversity, and the blurred boundaries between the agencies in this sector and those in other sectors make citizens feel that nonprofit social service agencies are the nonprofit sector.1 The faith-based initiative of Bush Administration further complicated this arena. To bring clarity to the sector, we ask several questions. What are the current opportunities and challenges for social service organizations, especially faith-based agencies? How do these organizations respond to these challenges? What is the future of this sector? These are all urgent problems for nonprofit social service organizations to address. In this paper, we will first map the field of social services, giving a brief introduction of the types, sizes, opportunities and challenges for agencies in this sector. We will then focus on the faith-based initiatives of the Bush administration. Among the challenges for social service nonprofit agencies, we will mainly address revenue enhancement, volunteer management, executive director succession and professionalization of faith-based organizations (FBO). A case study of The Pittsburgh Project (TPP) will help illustrate how small FBOs respond to emerging problems. Finally, some suggestions to some possible problems we realized during our interview with TPP Executive Director, Saleem Ghubril. 1
  • 2. Mapping Non-Profit Organizations in Social Services Social service agencies provide food, shelter, daycare and assist people with problems around domestic violence, immigration, AIDS and so on. Many agencies are small and ill equipped to respond to accountability; are sensitive to government regulations and funding; and yet, are vital because they serve the disadvantaged (poor, minorities) and expand government assistance (HHS, HUD). Social service agencies can be categorized into the informal (small, community- based groups dependent on cash and in-kind donations), the traditional and professional (Red Cross, Catholic Charities) and the recent (respondents to urgent social problems and dependent on government aid). Though many depend on government aid for survival, not all accept it because of religious or philosophical principles. Many agencies’ services extend into other fields, but the largest are individual and family services. Challenges and Opportunities Various factors have provided challenges and opportunities to social service agencies: women’s movements, deinstitutionalization of the mentally ill, elimination and creation of government funding, welfare reform and, most dramatically, increased competition from for-profit agencies. While employment in the social services sector increased 134%, for-profit agencies made significant inroads into child daycare and residential care.2 Accountability, evaluation, and outcome and performance evaluations to funders and the public also pressure social service agencies. Priorities for strengthening an agency’s ability to achieve its mission are fundraising, financial management, staffing, new program development and increased community development.3 Of social service agencies’ challenges and opportunities, we 2
  • 3. chose four: revenue enhancement, volunteer resources, professionalization of faith-based organizations and executive director succession. We will first say something about faith- based initiatives. Faith-Based and Community Initiatives FBOs also deal with another challenge/opportunity that secular-based social service agencies do not – the newly established White House Faith-Based and Community Initiatives (FBCI). These initiatives, created by the Bush Administration, and subsequent acts passed by the House and Senate, do not allow social service agencies “to discriminate against beneficiaries of services on the basis of faith, but [does allow them] to discriminate in hiring and in selecting board members on the basis of religious faith. They are not allowed to use federal grant or contract dollars to fund any ‘inherently religious’ activity, and they must separate ‘in time or location’ services funded by direct governmental aid from ‘inherently religious activities.’”4 Looking at an FBO’s bottom line, one understands why they are enticed by FBCI. “40.6% of FBOs … reported that operating expenditures exceeded revenues whereas only 28% of secular agencies reported this one-time financial imbalance. Thus, in the most recent year of the current economic downturn, FBOs seem to be more challenged than their secular counterparts in balancing revenues and expenditures.”5 Although a lower proportion report success in receiving government funding in comparison to their secular counterparts, it should be noted that secular agencies submit “more applications for government funds and, therefore, a greater proportion … report being both successful and unsuccessful in their individual grant applications.”6 FBOs, 3
  • 4. however, “plan to exert ‘much more effort’ or ‘somewhat more effort’ to seek government grants or contracts in the next three years.”7 Though FBCI are relatively new, government funding to FBOs is not. Some states have long accepted FBOs as government partners while others have not. Since 1996, when the Welfare Reform Act took effect, changes have been incremental. “Relatively few states have undertaken high-level administrative initiatives, and fewer still have enacted legislation implementing Charitable Choice language. … States have reacted more positively to the Bush administration’s efforts to raise the profile of FBO-provided social services than to the 1996 legislation.”8 Pennsylvania has undertaken no significant initiatives. Smith and others acknowledge that while FBOs like Lutheran Social Services and Catholic Charities have been receiving public funds for more than 100 years, others do not want the funds because it may mean a change in their operations. “FBOs that do not receive government funding are more inclined to report that faith has an impact on staff training and client advice … [and] … that they use religious values in staff training and … encourage clients to use spiritual values to change their behaviors.”9 The Pittsburgh Project The Pittsburgh Project (TPP) is a 19-year-old, urban, neighborhood-based, Christian community development organization that trains servant leaders and upholds the dignity of vulnerable homeowners. TPP develops servant leaders through afterschool and summer programs, urban service camps and retreats for Northside and other children and young people throughout the country. TPP upholds the dignity of vulnerable homeowners through free home repairs, visitations and links with social services and churches. 4
  • 5. Afterschool programs (BASIC and Reach Academies) for students in grades 1 – 12 emphasize improvement of academic performance, and provide cultural activities and educational field trips. Program coordinators are certified educators. Teachers are trained, caring adults. Student to staff ratios are about 10:1; lower when volunteer tutors assist. Students receive 45 – 60 minutes of homework assistance and computer instruction. Students grow in Christian discipleship, build relationships with students and adults, and acquire conflict resolution skills through Bible study and life application discussions. The most motivated and talented high school students who complete BASIC and Reach are offered Leader-In-Training, a four-month job training process, after which they take positions in ministry alongside staff. Training includes one-on-one mentoring, small group Bible study and discussion, mission trips and leader workshops. In the summer, teens perform volunteer labor for 130 in-need homeowners. Projects include drywall, painting, roofing, pointing, plumbing, handicap construction and cleaning. Homeowners must reside in Pittsburgh or a nearby borough, own and live in their homes, and document income within 150% of federal poverty guidelines. Priority is given to those over 60 and in poor health. Work and materials are free. Crews worked on 900 homes in 35 neighborhoods since 1985. TPP has one revenue-generating initiative – the Charles Street Café. It buys beans from Costa Rican coffee growers. Its proceeds benefit the Project’s ministries. TPP is located in the former Annunciation School and Church. A registered 501(c)3, TPP holds membership in Evangelical Council for Financial Accountability, Evangelicals for Social Action and Christian Community Development Association. It is managed by a 14-member board of directors and completes an annual independent audit. 5
  • 6. CEO Saleem Ghubril does not see himself as a service agency manager, but as a good neighbor, having lived in Perry South since 1985. Challenges and Opportunities Facing The Pittsburgh Project Of the challenges and opportunities facing social service agencies, our interview surfaced four that effect TPP: resource development, volunteer management, professionalization of faith-based organizations and executive director succession. Revenue Enhancement Like any social service agency, TPP has struggled in the past few years. FY 2002 indicates the impact of 911, but in three of the four years shown, expenses exceeded revenues. In addition, net assets decline by $338,861. We asked Ghubril how TPP plans to deal with the current fiscal situation. 1999 2000 2001 2002 Contributions 569,440 905,703 833,025 677,805 Noncash Contributions 0 19,642 10,711 15,850 Program Service Revenue 395,258 440,581 456,317 498,452 Interest 2,033 435 2,315 445 Total Revenue 966,731 1,366,361 1,302,368 1,192,552 Program Service Expenses 1,015,589 1,076,834 1,267,432 1,318,591 Management 32,354 46,669 45,074 33,603 Fundraising 51,568 122,465 57,016 99,678 Total Expenses 1,099,511 1,245,968 1,369,522 1,451,872 Excess/(Deficit) (132,780) 120,393 (67,154) (259,320) Net Assets beginning of year 770,264 637,484 757,877 690,723 Net Assets end of year 637,484 757,877 690,723 431,403 1999 2000 2001 2002 Current Ratio 13.7 16.2 14.4 2.1 Days Cash 42 143 76 38 Total Margin -13.7% 8.8% -5.0% -22.0% Operating Margin -10.6% 11.2% -2.4% -18.4% Ghubril states that 35% of TPP’s revenues come from fees, service camps and the café; 30% from foundations; 20% from individual donors, churches and directors. He 6
  • 7. plans to deal with the current deficit by increasing fees, decreasing TPP’s dependency on philanthropy and involving the board in revenue enhancement. Fees and Service Camps Social service agencies, a fortiori FBOs, rely on contributions and program fees, but unlike daycare and rehabilitation centers, TPP’s fees (program service revenue) come from camps and retreats. “Many nonprofit agencies find it very difficult to raise much revenue from client fees, because most clients are poor or disadvantaged,”10 as are TPP’s; but camp fees come from churches located outside Perry South. Of nine weeklong camps that accommodate 165 participants, eight are filled. One Day Weekend Week (Sr. Hi) Week (Jr. Hi) $20 $75 $325 $235 Café TPP made two forays into social ventures. A silkscreen business closed because it lost money. The Charles Street Café serves gourmet coffee, baked goods and drinks. It created a few jobs, pays a living wage and provides a service to the staff, volunteers and the neighborhood. According to Ghubril, it will make a profit next year. Foundations and Individual Donors TPP’s 2002 Tax Return shows that 57% of its revenue is from individual donors, churches and foundations. Ghubril states that 30% of TPP’s revenue comes from foundations. He wants to rely less on foundations and more on the public. To develop a wider donor base, he believes board members must initiate opportunities and events so that he or they can invite people to become regular donors. 7
  • 8. We have several suggestions regarding TPP’s revenue enhancement. Ghubril’s desire to increase the donor base through board initiatives is a straightforward approach to TPP’s resource development. He admits that it is the board’s one weakness. He sees donors as investors who have legitimate expectations. Donors expect to see a social return on investment (youth leadership and improved grades and homes) and an economic one (balanced budgets). We suggest that TPP investigate how it could benefit from Bush’s FBCI. Ghubril stated that TPP would not take government money if it were subversive to its mission. He also recognizes that money to fix homes is not money to evangelize. FBCI may, however, be an option especially with stagnant donations to United Way and other agencies over the past decade and philanthropic institutions’ tighter restrictions on nonprofits. Another suggestion is to form a strategic alliance with a business that could provide materials for home repair. There is no current action on TPP’s part to address this. To some, a strategic alliance is the NPO’s silver bullet. Strategic alliances, though built on trust, do not always reach the integrative stage with the same success as Timberland and City Year; however, they are worth investigating. A good start is having the executive director and board study Austin’s The Collaborative Challenge. Though filled with wisdom that comes with experience, we offer just two points of advice. First, even if leaders share passion and inspiration to form a strategic alliance, the NPO must “conduct a capabilities analysis to ensure that their competencies and resources match their partners’ expectations … to avoid disappointment later.”11 Second, because the leaders will deal with forces that pull apart the alliance, they must counter centrifugal 8
  • 9. pressures with centripetal forces “developed around a shared mission and vision to draw the two organizations together.”12 Because alliances are built not on contracts, but experience and genuine affection, they may take years to form.13 Most donors are indifferent about these alliances, but are concerned the activity is consistent with or advances the organization’s mission14 Hence, if TPP forms a strategic alliance, it should be around a particular project, like neighborhood enhancement. In addition, if the alliance enhances TPP’s revenues, it should still maintain foundation support, increase fees for summer programs and encourage board members to seek new donors. The best method to increase revenue will come by educating prospective donors about philanthropy. Nonprofits must educate people so that they see their modest, systematic financial contributions as their investment in a cause.15 We also suggest TPP examine if volunteers could complete the work of paid staff members. (We answer this in the next section.) FBO employees are paid similar or lower salaries and benefits than those at similar organizations.16 TPP staffers are not paid exorbitant salaries, and Ghubril’s salary is modest for the work he performs. Lastly, we suggest Ghubril market TPP’s intellectual property. What he has done is nothing short of remarkable in remaking the community. Ghubril sees TPP not so much as a neighborhood organization, but rather as a community of good neighbors. Of the 14 people on its board, five are community residents. Ghubril himself has lived in the neighborhood for 18 years. Much of TPP’s success can be accredited to Ghubril’s dedication to TPP’s mission, his Christian faith and street-level management. He continues to do two things that we found in Mulroy: 9
  • 10. “Spend time working in the target community face-to-face with residents; and support, empower, and learn from community workers. Community-based endeavors are intended to strengthen local neighborhoods and residents. Frontline workers … had the bottom-up perspective: the local knowledge derived from immersion in the neighborhood. They were not only serving clients but were key partners in building and implementing collaborative alliances in chaotic urban neighborhoods.”17 Other issues not discussed but noted include the infrastructure of TPP. Major renovations or unexpected repairs would burden TPP. To address this likelihood, we suggest a separate capital campaign to deal with the planned or unexpected. Volunteer Management Volunteers save a significant amount of money for any organization. A 2002 study of Pittsburgh congregations reveals, “57% do not anticipate having enough staff to serve additional clients, and 67% do not expect to be able to raise more funds to serve additional clients. The participation of volunteers is consequently critical for operating, and continuing to operate such programs. It is thus not surprising that 68% of the respondents report relying upon 20 or more volunteers.”18 It would be safe to surmise that social service agencies that serve the poor rely heavily on volunteers. Nearly half the nation’s population volunteers 4.2 hours per week. Volunteers expect certain considerations from the organization, and if those expectations are not met, they become dissatisfied. Volunteers do not receive a paycheck, but view pay in some symbolic way. Therefore, volunteer administrators must provide symbolic support, recognition and appreciation, take interest in the volunteer’s life, offer timely and helpful feedback on their efforts, and provide a supportive network of other volunteers.19 10
  • 11. Although all of this underscores the need to hire a volunteer manager, only three of five charities and one of three congregations with social service outreach activities have a paid staff person. Among paid staff volunteer managers, one in three has not received any training in volunteer management, and half spend less than 30% of their time on volunteer coordination. Volunteers make up the difference for the work undone by a paid staff. Secular NPOs employ 19.3 full-time and 7.8 part-time staff. FBOs employ 28.9 full-time and 18.4 part-time staff.20 According to their 2002 Tax Return, TPP employs 47 individuals. In our interview, Ghubril stated that TPP has 22 permanent paid staff members, 15 part- time after-school staff and 40 summer staff. Secular NPOs have 9.3 volunteers who give more than ten hours a week, 63.9 who give less than ten. FBOs have 34.3 who give more than ten hours, 141.4 who give less than ten. Ghubril states that TPP has 120 volunteers, 15-20 each day, and 2000 in the home repair program. It offers a 2½-hour training seminar for tutors, and a 2-hour seminar for homeowner care. Because social service agencies depend on volunteers to reduce costs, a volunteer coordinator is essential. A paid volunteer coordinator “sends a powerful message to other managers and employees regarding the significance and value organizational leadership places on the volunteer component.”21 Among the duties are accountability for and advocacy of the volunteer program, recruitment, publicity, administration, training, management and recognition of volunteers. Before Patti Ghubril became TPP’s Volunteer Coordinator, a position she has held for the last six years, she volunteered as the Coordinator for two years. She now 11
  • 12. works 30 hours per week. She began as a volunteer youth worker in college and worked as a Training Manager for a mid-West department store chain. She employs her professional skills in designing TPP’s volunteer positions. Before TPP, Ghubril directed children’s ministry at a suburban church, which meant she coordinated a large pool of volunteers. She regularly attends workshops to update her work. Her budget is $3,500. Ghubril recruits at college volunteer fairs and churches, and accepts high school and college students required to do service hours. In addition, TPP attracts volunteers through Saleem Ghubril’s speaking engagements, TPP’s website, occasional media coverage and by word of mouth. Over the past eight years (1996-2003), annual volunteer hours for tutors increased from 600 to 4,004. Workday volunteer hours increased from 980 in 2000 to 1,240 in 2002. Special volunteers, e.g., day camp helpers, administration and other projects, gave 195 hours in 2003. TPP holds recognition celebrations at the end of each semester and will recognize long-term volunteers on April 23. Ghubril does not take a ‘one size fits all’ approach to recognizing volunteers. She looks for as many ways as possible to thank folks and recognize their achievements. Volunteer feedback led to a monthly newsletter for tutors. Ghubril complements the two-fold recommendation of developing a structure in which adequate training programs improve volunteers’ abilities to complete tasks and conveys a commitment to TPP’s mission, and assigns volunteers challenging work.22 Although TPP is handling well its need for volunteers who provide tutoring and home-repair, we wondered if it would be feasible to cut expenses with fewer paid staff members and more volunteers. From our studies, we concluded that such a move would not save TPP much money and in the end prove to be detrimental. 12
  • 13. Executive Director Succession When we asked about his perception of the leadership body of TPP, Ghubril seemed very confirmative and satisfied when he talked about the primary advantage of the board of TPP—relationship. First, it refers to the close-knit relationship between board members, board and executive director, and staff. Everyone in TPP is sharing and committed to the same value and mission. Second, close relationship with the community is another competitive advantage for TPP. While conducting their programs, they are not thinking of themselves as professional service providers but good neighbors. And the board of TPP is a good representative of the community, with 5 out of 14 board members being from local community. Another more important problem Ghubril mentioned about the management of TPP is leadership succession, to be specific, the succession of Executive Director. For the past 19 years, TPP has had only one Executive Director. As Ghubril said, the organization just looks, smells and acts like him. To address this problem, Ghubril said TPP is planning to have a new Executive Director by the year 2010. However, the executive transition is not as not a simple matter at all. As Bradshaw Lynn writes, “The success of the succession management process, as with other employee development efforts, ultimately rests with commitment from top management.”23 As the only body which has the authority to hire and fire executive director, the board of directors is the leader of the whole transition process. Allison used a more vivid analogy to describe this transition process as a process of firing pottery. If it passes the heat test, it will become stronger, otherwise it will end up broken. “If the board is prepared, has an appropriate composition in its membership and 13
  • 14. supporting players, and uses a process that is well designed, the organization actually can become stronger through the transition. It can emerge with renewed clarity of purpose and an energized team poised for achieving success. Failure typically results in a poor choice of a new leader and a fragmented, exhausted group of people.”24 Therefore, a close relationship could not be enough for an efficient board. According to Kearns, besides accessibility and commitment to mission, desired characteristics of board members also includes special talents and skills, constructive problem solving, understanding the niche and leadership potential. However, “boards generally have too little time, too little experience with nonprofit management principles, too little expertise in the business of the organization (field of service), and too little skill at governing as a group to be able to handle the governing role well.”25 To be the real protector of the organization, the board should pay more attention to its own capacity building. In this case, the board should be well prepared and take a strategic method to go through the process of identifying appropriate candidate, competency development and orientation of new position. Professionalization of FBOs As we mentioned before, most of NPOs in social service fields are small size organizations engaged in service that help the disadvantaged groups. People believe that work in this field needs no special skill and the key for the management of social service organizations is just good intention. For FBOs especially, religious value will be the most important factor for successful management. However, in recent years, the topic of professionalization of NPOs has been a hot topic. As the external and internal environment for NPOs development changes dramatically, it is believed that good 14
  • 15. intention is no longer enough and professionalism is a necessary concept to be accepted. Professionalization in human resource management and technology application are the two main aspects. During the interview, we were impressed by TPP employees’ commitment to its mission. As Ghubril said, TPP will not do anything that jeopardizes its mission. He acknowledged the importance to have a more efficient and measurable outcome with the prerequisite that the soul of the mission should not be lost. We cannot deny the fact that the positive attitude toward its mission has some relationship with employee’s satisfaction and intention to remain with the organization. At the same time, however, as the external competition become fiercer, can mission explain everything? “Dissatisfaction with pay tended to override employee’s mission attachment as explanation of why they may leave the organization. The implication is that mission might be salient in attracting employees but less effective in retaining them.”26 According to the result of an anonymous survey distributed to 991 employees of a non-profit youth and recreation services organization with sixteen geographically dispersed locations, mission attachment appears to be a valid consideration for younger, part-time employees, but the intrinsic motivations run thin as full-time employees earn salaries that appear noncompetitive to other organizations. As for TPP, although it is not experiencing a crisis in attracting and retaining, it will be beneficial if more training and development for human resource management is taken. While relying on mission attachment as a management tool, TPP should pay attention to other factors for job satisfaction as well. Besides mission attachment and job satisfaction, technology is also an important tool for successful management. With an increased of demand for NPO services in the 15
  • 16. social, economic and political sectors, modern technology, especially electronic networks, holds the promise of innovation. Information and communication technologies (ICTs) improve administrative and operational efficiency. More importantly, ICTs reshape the organizational structure internally, reconfigure relationships across networks of organizations, and strengthen relationships with individual citizens. It is not only the scale and scope of information processing that the technologies permit that open up these opportunities. The technologies also offer new dimensions in knowledge management and organizational learning.27 Electronic networks are not simply vehicles for the storage or communication of information, but powerful and sophisticated information processors.”28 TPP seems to attach more importance to personal relationship than electronic communication. It is not practical for a small-size NPO to invest a large amount of money in electronic facility installation; however, it is important to realize that information technology is meaningful in order to improve management efficiency. For example, Ghubril said that TPP employees were hungry for training and further study. The application of electronic network might provide them a good training method and improve organizational learning. Conclusion Social service agencies will continue to provide significant service to our communities throughout the nation and world. Though most will never be as large as the Red Cross or Catholic Charities, these smaller agencies are as true to their mission as are their larger brothers and sisters. Size notwithstanding, each will continue to respond to 16
  • 17. people’s needs in ways that the business and governmental sectors cannot. For that reason, social service agencies need and deserve our support. Faith-Based Community Initiatives are new to many social service agencies that are faith-based. It has been shown, however, that some FBOs have had a steady partnership with federal and state agencies. Though some, including Smith, are wary of FBOs accepting money from the government, we suggest that FBOs at least (thoroughly) examine the possibility that such funding can further their mission and ease their financial situation. If, however, acceptance means mission compromise, we suggest that they not chase the money, for in the end, the agency’s conscience will rest. As Smith has shown, social service agencies face stiff competition from other NPOs and for-profit businesses. They must diversify ways of increasing revenue and creating community wealth (beyond money) while they continue to rely upon private donors, foundations and fees for support. Social service agencies will always need volunteers. Most importantly, social service agencies need and deserve our support. 17
  • 18. Bibliography Allison, Michael. “Into the Fire: Boards and Executive Transition,” Nonprofit Management & Leadership 12, no. 4 (Summer 2002): 341-351. Austin, James E. The Collaborative Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances. San Francisco: Jossey-Bass Publsihers, 2000. Behr, Greg S. and Melanie DiPietro. “Capacity Building for Faith-Based Social Service Organizations,” The Forbes Fund (Fall 2003) http://www.forbesfunds.org _____. “Social Services in Faith-Based Organizations: Pittsburgh Congregations and the Services They Provide,” Tropman Report 1, no. 7 (November 2002) http://www.forbesfunds.org. Bloom, Leslie Rebecca and Deborah Kilgore. “The Volunteer Citizen After Welfare Reform in the United States: An Ethnographic Study of Volunteerism in Action,” Voluntas: International Journal of Voluntary and Nonprofit Organizations 14, no. 4 (December 2003): 431-452. Bowen, Robert and Kate Dewey. “Keeping Our Promise: The Use of Modern Quality Assurance Methods in Nonprofit Management,” Tropman Report 2, no. 4 (October 2003) http://www.forbesfunds.org Bradshaw Lynn, Dahlia. “Human Resource Management in Nonprofit Organizations,” Review of Public Personnel Administration 23, no. 2 (Summer 2003): 91-96. _____. “Succession Management Strategies in Public Sector Organizations,” Review of Public Personnel Administration 21, no. 2 (Summer 2001): 114-132. Brown, William A. and Carlton F. Yoshioka, “Mission Attachment and Satisfaction as Factors in Employee Retention,” Nonprofit Management & Leadership 14, no.1 (Fall 2003): 5-18. Brudney, Jeffrey L. “The Perils of Practice: Reaching the Summit,” Nonprofit Management and Leadership 9, no. 4 (Summer 1999): 385-398. _____. “Voluntarism.” Understanding Nonprofit Organizations: Governance, Leadership, and Management. Ed. J. Steven Ott. Boulder, CO: Westview Press, 2001. _____. “Volunteer Administration.” Understanding Nonprofit Organizations: Governance, Leadership, and Management. Ed. J. Steven Ott. Boulder, CO: Westview Press, 2001. 18
  • 19. Camillus, John C. and Donald R. Beall. “Strategic Restructuring: A Tool for Improving Organizational Effectiveness,” Tropman Report 2, no. 2 (October 2003) http://www.forbesfunds.org Campos Market Research and Droz and Associates. “New Economy Entrepreneurs: Their Attitudes on Philanthropy,” Tropman Report 1, no. 4 (November 2002) http://www.forbesfunds.org. Castells, M. The Rise of the Network Society. Oxford, England: Blackwell, 1996. Community Wealth Ventures. “Identifying Financing Opportunities for Pittsburgh- Based Social Enterprises: Challenges and Opportunities for Capitalizing Entrepreneurial Ventures,” Tropman Report 2, no. 3 (October 2003) http://www.forbesfunds.org Eleanor, Burt and John A. Taylor. “Information and Communication Technologies: Reshaping Voluntary Organizations?” Nonprofit Management & Leadership 11, no.2 (Winter 2000). Farmer, Steven M. and Donald B. Fedor. “Volunteer Participation and Withdrawal: A Psychological Contract Perspective on the Role of Expectations and Organizational Support,” Nonprofit Management and Leadership 9, no. 4 (Summer 1999): 349-367. First Side Partners. “Leveraging Human Capital: How Nonprofits in Pittsburgh Recruit and Manage Volunteers,” Tropman Report 1, no. 3 (November 2002) http://www.forbesfunds.org Guidestar. http://www.guidestar.org Hansberry, Jane. “Capacity-Building in the Nonprofit Sector: A Comparison of Resources and Practices in Pittsburgh and Denver,” Tropman Report 1, no. 1 (November 2002) http://www.forbesfunds.org. Herman, Robert D. and Denise Rendina. “Donor Reactions to Commercial Activities of Nonprofit Organizations: An American Case Study,” Voluntas: International Journal of Voluntary and Nonprofit Organizations 12, no. 2 (2001). Jamison, Irma Browne. “Turnover and Retention Among Volunteers in Human Service Agencies,” Review of Public Personnel Administration 23, no. 2 (June 2003): 114-132. Kearns, Kevin; Park, Chisung and Linda Yankoski. “Comparing Faith Based and Secular Human Service Corporations in Pittsburgh,” Tropman Report FBO Agency Study http://www.forbesfunds.org. 19
  • 20. Masaoka, J. and Allison, M. “Why Boards Don’t Govern.” Taking Trusteeship Seriously. Ed. R. Turner. Indianapolis: Indiana University Center on Philanthropy, 1995. McLoughlin, I. Creative Technological Change: The Shaping of Technology and Organizations. New York: Routledge, 1999. Mulroy, Elizabeth A. “Community as a Factor in Implementing Interorganizational Partnerships: Issues, Constraints, and Adaptions,” Nonprofit Management and Leadership 14, no. 1 (Fall 2003): 47-77. Olszak, Lisa M. “Profit Making in Nonprofits: An Assessment of Entrepreneurial Ventures in Nonprofit Organizations,” Tropman Report 1, no. 5 (November 2002) http://www.forbesfunds.org. The Pittsburgh Project. http://www.pittsburghproject.org Quinn, J.B. The Intelligent Enterpirse. New York: Free Press, 1992. Ragan, Mark; Montiel, Lisa M.; and David J. Wright. “Scanning the Policy Environment for Faith-Based Social Services in the United States: Results of a 50-State Study,” The Roundtable on Religion and Social Welfare Policy. Albany, NY: The Nelson A. Rockefeller Institute of Government, State University of New York. (October 2003) http://www.religionandsocialpolicy.org. Shaw, Mary M. “Successful Collaboration Between the Nonprofit and Public Sectors,” Nonprofit Management and Leadership 14, no. 1 (Fall 2003): 107- 120. Smith, Steven Rathgeb. “Social Services.” The State of Nonprofit America. Ed. Lester M. Salamon. Washington, D.C.: Brookings Institution Press, 2002. 20
  • 21. Addendum Interview Protocol for Saleem Ghubril, Executive Director, The Pittsburgh Project March 2, 2004 1. The Pittsburgh Project (TPP) is a small non-profit organization (NPO) engaged in community development, servant leadership, urban and youth ministry, etc. “Social movements have created demands for new or expanded services such as child daycare, rape crisis centers, domestic violence programs, and AIDS services. Profound demographic changes … have produced widespread demand for social services to cope with these changes.”29 As the executive director of TPP, how would you address the new social problems that stem from continuous social movements and demographic changes? What are the greatest managerial challenges for you? When compared to your colleagues in other NPOs, FPOs (for-profit organizations) or government agencies, you and your staff members are not overpaid. How do you compete with those big, traditional NPOs and those for-profit organizations that serve in the similar sector? 2. TPP depends heavily on volunteers and, according to IRS filings, accepts no governmental assistance (?). If you do not seek government assistance, would you explain your philosophical and theological reasons for not doing so? How would you maintain financial viability without the program services revenue ($456,317 in 2001)? 3. Today, community, corporate, family and individual donors are placing financial accountability and performance evaluations on those NPOs seeking resources. In addition to financial audits and staff reports, what other measures are in operation at TPP to demonstrate financial accountability and performance evaluations to donors? To what degree are TPP’s Board members involved in the implementation of these measures? 4. Welfare reform legislation of 1996 included a charitable choice amendment. Subsequent to that, “President Bush proposed a faith-based and community initiative that would expand the use of faith-based organizations far beyond the welfare-related services targeted by the charitable choice amendment.”30 Will the policies provide more or fewer opportunities to improve development at TPP? If more, will that cause any negative influence on your autonomy? How will you avoid that? 5. Coupled with that 1996 legislation is the fact that the majority of the people served by TPP are poor or disadvantaged. Though TPP serves the poor and employs residents of the community, what approach do you employ to serve as an advocate for policy change without losing any of your autonomy? In accepting any donations or major grants, in what ways have you been restricted or felt a loss 21
  • 22. of autonomy? Who are those individuals (staff or board members) primarily responsible for such advocacy? 6. You are quoted as saying that Councilwoman Barbara Burns’ legislation to place modest restrictions on charitable activity in residential neighborhoods is “overkill and very reactive” (Brian O’Neill, “Churches Should Minister to their Neighbors, Too,” PG, 7/18/2002). Why do believe it is necessary to live in the neighborhood where you serve? 7. One of the more difficult tasks that an Executive Manager faces is staffing the NPO with the proper people. What is the status of human resources at TPP? What measures have you taken to obtain, maintain and retain the best staff possible? What keeps employees? Why do any leave? How many have left for work that is more profitable? 8. In 2001, you launched the Charles Street Café and the Charles Street Screenworks. What financial contributions have these two components added to your income? Beyond any financial contribution, tell us what other benefit they have? Do you feel any community pressure from other area FPOs who question an NPO running a café and screen-printing business? What is your understanding of the professionalizaiton of NPOs? 9. An efficient board is of great importance for the successful operation of a NPO. What are the procedures and criteria of TPP to recruit new board members? Is personal relationship an important factor? How does TPP attract board members who are committed to its mission, have adequate oversight and monitoring of the performance, and enough access to resources (funds, information, social network, special skills and etc)? Sitting on other boards, e.g., Pittsburgh Partnership for Neighborhood Development, do you ever find yourself in conflicting situations? 22
  • 24. 1 Steven Rathgeb Smith, “Social Services” in The State of Nonprofit America, ed. Lester M. Salamon (Washington, D.C.: Brookings Institution Press, 2002), 149. 2 Steven Rathgeb Smith, “Social Services” in The State of Nonprofit America, ed. Lester M. Salamon (Washington, D.C.: Brookings Institution Press, 2002), 157. 3 Kevin Kearns, Chisung Park and Linda Yankoski, “Comparing Faith Based and Secular Human Service Corporations in Pittsburgh,” Tropman Report FBO Agency Study, 30, Table 40 http://www.forbesfunds.org 4 http://www.pewforum.org/faith-based-initiatives 5 Kearns, 8. 6 Ibid., 9. 7 Ibid. 8 Mark Ragan, Lisa M. Montiel and David J. Wright, “Scanning the Policy Environment for Faith-Based Social Services in the United States: Results of a 50-State Study,” The Roundtable on Religion and Social Welfare Policy (Albany, NY: The Nelson A. Rockefeller Institute of Government, State University of New York, October 2003), 8. 9 Kearns, 10. 10 Smith, 172. 11 James E. Austin, The Collaborative Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances (San Francisco: Jossey-Bass Publishers, 2000), 174, 89. 12 Ibid., 65 13 Mary M. Shaw, “Successful Collaboration Between the Nonprofit and Public Sectors,” Nonprofit Management and Leadership 14, no. 1 (Fall 2003): 118 14 Robert D. Herman and Denise Rendina, “Donor Reactions to Commercial Activities of Nonprofit Organizations: An American Case Study,” Voluntas: International Journal of Voluntary and Nonprofit Organizations 12, no. 2 (2001): 166f 15 Campos Market Research and Droz and Associates, “New Economy Entrepreneurs: Their Attitudes on Philanthropy,” Tropman Report 1, no. 4 (November 2002) http://www.forbesfunds.org. 16 Kearns, 27, Tables 33 and 34. 17 Elizabeth A. Mulroy, “Community as a Factor in Implementing Interorganizational Partnerships: Issues, Constraints, and Adaptions,” Nonprofit Management and Leadership 14, no. 1 (Fall 2003): 61. 18 Greg S. Behr and Melanie DiPietro, “Social Services in Faith-Based Organizations: Pittsburgh Congregations and the Services They Provide,” Tropman Report 1, no. 7 (November 2002) http://www.forbesfunds.org. 19 Steven M. Farmer and Donald B. Fedor, “Volunteer Participation and Withdrawal: A Psychological Contract Perspective on the Role of Expectations and Organizational Support,” Nonprofit Management and Leadership 9, no. 4 (Summer 1999): 362f. 20 Kearns, 18, Table 10. 21 Jeffrey L. Brudney, “Volunteer Administration,” Understanding Nonprofit Organizations: Governance, Leadership, and Management. ed. J. Steven Ott. (Boulder, CO: Westview Press, 2001) 333. 22 Irma Browne Jamison, “Turnover and Retention Among Volunteers in Human Service Agencies,” Review of Public Personnel Administration, 23, no. 2 (June 2003): 129. 23 Dahlia Bradshaw Lynn, “Succession Management Strategies in Public Sector Organizations,” Review of Public Personnel Administration 21, no. 2 (Summer 2001): 130. 24 Michael Allison, “Into the Fire: Boards and Executive Transition,” Nonprofit Management & Leadership 12, no. 4 (Summer 2002): 341. 25 J. Masaoka and M. Allison, “Why Boards Don’t Govern,” Taking Trusteeship Seriously. Ed. R Turner. Indianapolis: Indiana University Center on Philanthropy, 1995. 26 William A. Brown and Carlton F. Yoshioka, “Mission Attachment and Satisfaction as Factors in Employee Retention,” Nonprofit Management & Leadership 14, no.1 (Fall 2003): 5. 27 M. Castells, The Rise of the Network Society (Oxford, England: Blackwell, 1996); J.B. Quinn, The Intelligent Enterpirse (New York: Free Press, 1992). 28 I. McLoughlin, Creative Technological Change: The Shaping of Technology and Organizations (New York: Routledge, 1999) Addendum Endnotes 29 Smith, 150. 30 Smith, 169.