Highlights from Atlanta 2001

MR. PETER GOLDBERG: Thank you very much. It has been a great privilege, one I will always treasure, to have served as chair of INDEPENDENT SECTOR.

I want to thank our membership for this opportunity and this honor.

Indeed, I am—and have always been—proud to be a part of America’s nonprofit sector. We are the stewards of a very remarkable movement engrained with precious values and principles.

We are the beneficiaries of extraordinary roots and traditions that extend back in time to America’s pre-revolutionary period. Just think; if he were alive today, Benjamin Franklin, one of our earliest and best-known champions of nonprofit voluntary associations, and an American icon, would probably be in the room with us now, if not at this podium. More likely than not, he would have co-founded INDEPENDENT SECTOR with John Gardner and Brian O’Connell.

We have so much to be proud of, so many champions who preceded us, so many role models to emulate. Visit the Ebenezer Baptist Church or the Martin Luther King Center for Social Change here in Atlanta, and it brings to life the power and moral suasion of citizen-led nongovernmental movements.

Visit the Carter Center and be invigorated by the commitment to nonprofit values espoused and embraced by a former president of the United States. Visit Olympic Park or the High Museum, listen to the Atlanta symphony, attend a class at Morehouse College and reflect on the meaning of our nonprofit culture.

Anywhere and everywhere we go in this country, we can see and cite the unique contributions of America’s nonprofit sector and the extraordinary commitments emanating from our passion for volunteerism.

When your young children ask you what you do, or for that matter, when the stranger seated next to you on the plane asks the same question, isn’t it terrific to be able to say in one form or another that you are part of America’s voluntary sector?

I know it’s difficult to explain sometimes, but it’s the meaning that counts.

And I am so proud of INDEPENDENT SECTOR, proud of what it stands for, proud of what it has accomplished. In its short but energetic 21 years, INDEPENDENT SECTOR has earned its stripes, established its legitimacy, and become a leader. We are a national resource and a recognized steward for our field. Expectations of us are now very high and we are held, rightfully, to very high standards.

We did not get to where we are in 21 years by accident. We were blessed initially with the visionary leadership and direction of John Gardner and Brian O’Connell. Dick Lyman, John Filer, Gene Dorsey, Raul Yzaguirre, and Barbara Finberg succeeded John as board chairs and all magnificently helped to shape what we have become. I have no doubt whatsoever that John Seffrin will provide the outstanding board leadership that you have come to expect. I also want to acknowledge the many other individuals, who have served on the INDEPENDENT SECTOR board of directors since our inception in 1980.

I have had the good fortune to work with Sara Meléndez for these past three years. Sara is only the second president INDEPENDENT SECTOR has had; she succeeded a legendary founding president in Brian O’Connell and she has done it so well. This is not necessarily an easy time to be running a national membership association—I know that from my own experience—but Sara has a track record of accomplishment and has been a wonderful partner to work with. Thank you, Sara, for making my volunteer responsibilities so easy to fulfill.

And, of course, we couldn’t have gotten to where we are without you—the wonderful, energetic, engaged, and committed members. We are nothing without you and your critical participation and support. Thank you.

When I was elected chair at our annual conference three years ago in Denver, I outlined two principal issues of concern to me; two areas where I hoped we could focus some work and report some progress.

First, I voiced my concerns about what I called the distancing taking place between too many grantmakers and the nonprofit organizations they fund. 

Grantmakers and nonprofits cannot afford to take each other for granted; we cannot arbitrarily divide our field between the "haves" and the "wants" and expect to be the sector we aspire to be. We have made some progress, I believe, to build better understanding and common agendas between grantmakers and nonprofit organizations, but not as much as I would like, and I worry that this distancing we have leaves our entire sector vulnerable to unwelcome challenges in the future, all the more so if the economy trends downwards and resources in both foundations and nonprofits tighten up.

Secondly, I shared with the is membership my conviction about the need for concerted and collective efforts to rebuild public appreciation and public trust in our sector.

I shared my notion of the goodwill account we have with the public and the public sector which will go a long way in determining our future health and well being. I shared my concern that we had made too many withdrawals from our goodwill account in recent years and that we needed to plan and act more conscientiously to replenish our account. And, while goodwill accounts are difficult to measure, I do think we have begun to make more deposits and fewer withdrawals. We are trending in the right direction but have miles yet to go before we can rest easy.

I might add that the tragic events of September 11th provide both an enormous opportunity and perilous risk to our goodwill account. Americans have responded with extraordinary generosity and compassion in the aftermath of the terrorist attacks. They have provided hundreds of millions of dollars to nonprofit institutions to aid in relief efforts, both short- and long-term. Generous and compassionate people and organizations everywhere—in this country and around the world—have reaffirmed their faith in our nonprofit institutions. Now, it is up to us to get it right; we have to deploy these funds efficiently, effectively, and for the specific purposes for which they were given. If we do so, we rightfully add to that goodwill account.

On the other hand, if we get sloppy or bankroll rather than expending these funds, or if we somehow crassly turn tragedy into fundraising opportunities, then we will damage our reputations, stain our images, and lose the public respect we work so hard to earn.

I have tremendous confidence in our nonprofit institutions. I urge us, however, not to let any tawdry examples of egregious practice or behavior that could damage us all to go unchallenged by any of us.

As for INDEPENDENT SECTOR, I would like to think that our organization has had a good past three years. We have a ledger sheet of victories and defeats, moments of satisfaction and discouragement.

Thankfully, we have had no catastrophes within the sector per se, but we’ve had our disappointments, among them, our frustration over not yet succeeding in our longstanding aspiration to see the nonitemizer deduction return to our tax law, where it belongs. The nonitemizer tax deduction remains a popular cause without a powerful constituency.

Tax issues and the faith-based initiative dominated the nonprofit public policy agenda in the first eight months of the bush administration. I fervently wish we could have gotten our membership more energetically behind support for campaign finance reform; it is still our only hope to level the playing field between the power of money and the power of ideas.

When all is said and done, however, I think the most significant organizational accomplishment of these past three years will have been the adoption of our new strategic plan. Our new plan, formally adopted by our board and membership last year, empowers us to be more proactive and wider reaching in our representation of the sector’s interests. And we are moving swiftly now, building the resources and capacities to fulfill the broader mandate you have endorsed.

History and tradition remind us that ours is a third sector, a sector independent of government and independent of business. It is a sector grounded in values of altruism, voluntarism, social purpose, the common good, and a civil society. It is a sector with a rich history and monumental accomplishment. Our independent sector is unique and the envy of much of the world. Over many years, we have adopted public policies that recognize this sector, codify it where appropriate and support its growth and development.

We are a very important part of the fabric of American life. We have so much to be proud of, so much we can do. It is also true that we are not the perfect sector. We can be inefficient at times and we can be vulnerable to abusive practices. Like every other large movement, we can improve in myriad ways. Arguably, we might want to congratulate ourselves a little bit on our focus on self-improvement. Surely we can always do better. However, in our laudable search for continuous improvement, we must be careful to preserve and protect our core values and not jeopardize them.

Indeed, the message I want to leave with you as I step aside as your board chair is the need for us to preserve the independence of the independent sector. While we are stronger than ever and thriving, we are also at risk of losing some of our hallmark distinctiveness; the risk is sometimes self-inflicted, sometimes the intrusive results of larger societal and economic forces.

In my estimation, we need to direct more attention to preserving, protecting, and strengthening this third sector and its values; we need to highlight our distinctiveness, our independence, our value, and our values. Instead, it seems to me, the fad or the trend has been for us to blur the distinctions between us and the other two sectors, to look and to be more like "them." and while there may be short-term gains to be had, the long-term risk is that we diminish the raison d’être for an independent sector of the size and magnificence we have attained.

For example, we may need more partnerships with the business community. But those partnerships should be predicated on notions that respect our differences rather than masking them. And, as our sector grows larger and larger, we will need to adopt stronger financial systems, more sophisticated investment procedures, newer strategic planning capacities, more entrepreneurial cultures, more rigorous human resource policies, and tougher executive decision making models that have been the hallmarks of the business sector and particularly of the larger and more visible corporations.

But we need to adopt the best practices of the business sector in the context of our values. In effect, we need, in our sector, pinstripe suits who can embrace Florence Nightingale values. We need to improve our efficiency without sacrificing our humanity. We need to preserve our values of altruism and voluntarism from the expediency of short-term outcomes and cost-effective measurements that can never fully capture all of the intangibles of quality of life.

We are not perfect in the independent sector, but we have nothing to be embarrassed about, either. We can learn some best practices from the business sector, but believe me, the business sector can learn much from us, too. In the long run, our society will benefit most from having these two sectors be different from one another rather than being more and more alike. Let’s be who we are and let us stand tall for our contributions and accomplishments. Let’s partner with the business sector and learn from them, but let’s let them be them and us be us.

Now, let me address briefly the relationship between our sector and government. Here the issues are somewhat different. I know of few in our sector who are suggesting that we emulate the best practices of government. The challenge here is somewhat different; instead of simply emulating government, our risk is that we will be bought out by government.

Government support for a wide variety of nonprofit organizations has been a common practice for a long time. We have an incredible history of successful partnerships with the public sector. Indeed, government support of nonprofit organizations has enabled us to grow and succeed in ways that are almost unimaginable.

But when does enough become too much? Government has become enamored of us, so much so that the love hug threatens to become the bear hug. For decades now, there has been relentless criticism of public sector bureaucracies. It has proven to be very difficult to actually deliver high volumes of government services and programs over extended periods of time with high performance standards.

So, more and more frequently now, government has turned to notions of privatization in which government contracts with either for-profit or nonprofit organizations to provide services which government once provided itself.

From the public sector viewpoint, this appears to make sense. First of all, it appears that for-profit and nonprofit organizations might be better service providers than government bureaucracies in some instances, in the short term at least. Second, if you are in government, it’s got to be more fun to be a contractor holding someone else accountable for tough performance measures than it is to be directly accountable yourself.

But the trends toward privatization and devolution also threaten to disrupt the healthy equilibrium that has evolved between the independent sector and government. Indeed, the results of devolution and privatization of many government programs have led to significant increases in government funding of nonprofit organizations.

Obviously, I appreciate and applaud government’s confidence in our competencies and characteristics. But, there is a limit. An increasing number of nonprofit organizations have become, for all practical purposes, public sector contractors with volunteer boards. We need to ask:

• What is the difference between a public sector contractor with a volunteer form of governance and a traditional nonprofit organization as we and the public have come to know it and think about it?
  
  
• Is the independent sector really independent when more and more of its organizations are more and more government dependent?
  
  
• Can we be independent advocates for the constituencies we represent?
  
  
• Can we be the conscience of government while also being the contractor for government?
  
  
• Will traditional nonprofit alternative delivery systems still flourish when government pumps so much more money into the nonprofit sector?
  
  
• Can the nonprofit sector really deliver high volumes of government-funded services over extended periods of time any better than government once did?
  
  
• Do we lose our inability to be innovative and creative, fast, and flexible when we labor under government funding and regulations?

In asking these questions, let me be clear that I don’t want to deny the legitimacy nor the value of nonprofit organizations delivering services with public sector funding. Indeed, I find the other alternative of government contracting with for-profit providers at least as challenging. My point is this: there are significant changes taking place within, between, and among our three sectors, and they are inevitable. But, we must manage these changes in the context of our vision and core principles and stand by them. Our responsibilities are to our history as well as to our future, and to our values as well as to our opportunities, on behalf of the unique and precious sector we are charged to serve and represent.

When I think about our organization, INDEPENDENT SECTOR, I think about the magnificent opportunities we have been given to be the conceptual and pragmatic resource to hundreds and thousands of organizations and millions of people who cherish our traditions. I think of us as the intellectual radar, guiding our field through the bumpy airs of change to smooth landings.

When I think of INDEPENDENT SECTOR, I think of John Gardner and Brian O’Connell and of all of us who followed in their footsteps, willingly transcending our more narrowly defined responsibilities to invest in, preserve, and protect the rich history, noble purposes, and unimaginable opportunities to contribute to a better world.

Were he here today, I imagine that Ben Franklin would be amused and amazed to see what has happened to his libraries and fire departments. But he would be proud, I think, to see how his notions of voluntarism and community, social purpose, and a civil society have endured.

So, in closing, my charge to you is this: twenty-five years from now and fifty years from now, when John Gardner and Brian O’Connell are beaming down on the annual meeting of INDEPENDENT SECTOR, I want them to like what they see. And I am confident that they will, because of who we are in this sector, and why we do what we do.

Once again, thank you for the privilege of serving as your board chair.

Thank you.

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