The scarce resource (Hint: It’s not money.)

How Children Succeed by Paul Tough

In his new book, How Children Succeed: Grit, Curiosity, and the Hidden Power of Character (Houghton Mifflin Harcourt, 2012), Paul Tough presents research on the effects of poverty on a child’s development. He argues that the chaotic environments that many low-income kids grow up in and the often stressful relationships they have with the adults around them make a huge difference in how children’s brains develop and lead to later problems in school, health, and behavior.

Similarly, in an essay titled “Promoting Social Mobility” (Boston Review, Sept./Oct. 2012), James J. Heckman notes that “early adverse experiences correlate with poor adult health, high medical care costs, increased depression and suicide rates, alcoholism, drug use, poor job performance and social function, disability, and impaired performance of subsequent generations.”

Other relevant quotes from Heckman’s essay include:

“An emerging literature confirms the common sense idea that success in life depends on much more than smarts. Non-cognitive abilities – including strength of motivation, an ability to act on long range plans, and the socio-emotional regulation needed to work with others – also have a large impact on earnings, employment, labor force experience, college attendance, teen pregnancy, … and participation in crime.”

“…both cognitive and socio-emotional skills develop in early childhood, and their development depends on the family environment. But family environments in the United States have deteriorated over the past 40 years. A growing fraction of our children are being born into disadvantaged families, where disadvantage is most basically a matter of the quality of family life and only secondarily measured by the number of parents, their income, and their education levels. And that disadvantage tends to accumulate across generations.”

“…experimental evidence shows that intervening early can produce positive and lasting effects on children in disadvantaged families. This evidence is consistent with a large body of non-experimental evidence showing that the absence of supportive family environments harms childhood and adult outcomes. Early interventions can improve cognitive as well as socio-emotional skills. They promote schooling, reduce crime, foster workforce productivity, and reduce teenage pregnancy…the benefits of later interventions are greatly enhanced by earlier interventions: skill begets skill…”

What are some of the implications for public policy? Heckman notes that programs that target the early years seem to have the greatest promise. These include Nurse-Family Partnership (which Goodwill is now implementing in Indianapolis). “Programs with home visits affect the lives of the parents and create a permanent change in the home environment that supports the child after center-based interventions end. Programs that build character and motivation, and do not focus exclusively on cognition, appear to be the most effective.”

What about programs for older children and youth? According to Heckman, “A growing body of evidence does suggest that cognitive skills are established early in life and that boosting raw IQ and problem-solving ability in the teenage years is much harder than doing so when children are young. But social and personality skills are another story. They are malleable into the early twenties, although early formation of these skills is still the best policy because they boost learning. Adolescent strategies should boost motivation, personality, and social skills through mentoring and workplace-based education.”

Heckman concludes the essay by noting that “Giving money to poor families does not, by itself, promote social mobility across generations….The scarce resource is love and parenting – not money.”

In a column titled, “Of Love and Money,” published in the New York Times May 25, 2006, David Brooks drew a similar conclusion: “Kids learn from people they love. If we want young people to develop the social and self-regulating skills they need to thrive, we need to establish stable long-term relationships between love-hungry children and love-providing adults.”

Multidimensional impact

At a recent Excel Center graduation, 55 adults walked across the stage in caps and gowns to receive their high school diplomas. After the ceremony, the father of one of the graduates approached me to express his gratitude for the Excel Center. Not long after she dropped out of school, his daughter realized she had made a mistake, but was not able to find a way to return to school that would fit her life situation. Then she found out about the Excel Center. She not only earned a diploma; she also began post-secondary studies, which she is continuing at IUPUI.

Her father kept repeating to me how much he appreciated Goodwill for starting a school like the Excel Center. But then his wife entered the conversation and said that there was another reason why her family appreciated Goodwill. Over a year earlier, both she and her husband lost their jobs. They had gone through their savings and were on the verge of losing their house. Fortunately, they were also aware of Goodwill’s Outlet Stores, which sell merchandise that did not sell in Goodwill’s other stores. Most of the merchandise is sold by the pound, and the stores have been incredibly popular.

Many of the customers who frequent the Outlet Stores buy goods they then try to resell. The family of the Excel Center graduate began doing this – buying merchandise in large quantities and reselling much of it online. They were able to make enough money to keep their family fed and to make their house payments. As the mother said to me, “Goodwill helped us keep our house.”

As I thought about my conversation with the parents of that graduate, it struck me that both the Outlet Stores and the Excel Centers are relatively recent innovations at Goodwill. And while they operate in separate divisions of Goodwill, both have had a significant direct positive impact on that graduate and her family.

Another recent development at Goodwill is also beginning to have multidimensional impact. Early in 2012 we began operating Nurse-Family Partnership, a highly effective nurse-led home visitation program for first-time mothers in low income households. Registered nurses make weekly or biweekly visits with the mom and baby until the child is two years old. Their main areas of focus are on health related matters and the development of good parenting skills. Some of the moms are students in an Excel Center, and some are employed by Goodwill. Again, a multidimensional impact.

A few years ago we made a conscious decision to take a more holistic, whole family approach in our work. We also recognized the importance of long term relationships for lasting impact. Accordingly, we have made a commitment to maintain an active, supportive relationship with every graduate of our schools until he or she obtains a post-secondary credential, becomes employed, and remains in the workforce for at least one year. We have also developed a data warehouse that will help us track the progress of every graduate indefinitely. This, in turn, will help maximize positive outcomes for our graduates and help us continue to improve the effectiveness of the services we offer.

Every innovation – in fact, every major step we have taken – especially over the last twenty years – has built on what we had learned from earlier experiences. Constant learning, wonderfully talented staff, and a strong financial position made possible largely by donors of goods, retail customers, and donors of money to the Goodwill Foundation have produced a recipe that is yielding increasingly positive, often multidimensional, long term benefits for many individuals and their families and for the communities in which we operate.

 

On Getting More Bang for the Buck

As I have highlighted in previous posts of this blog, there’s a lot of data showing a deterioration in a number of major social indicators over the last forty years, despite massive increases in public spending and a huge proliferation of not-for-profit organizations. Overall, the dominant approaches that have been taken during the past several decades have not reduced a lot of our social problems. One could even argue that some of those approaches have actually made matters worse.

Fortunately, there are some steps being taken that might eventually result in more effective use of public and philanthropic dollars to alleviate social problems. According to the Coalition for Evidence-based Policy,” the Office of Management and Budget (OMB) has launched a major new push for the development and use of rigorous evidence in budget, management and policy decisions across the federal government…”

The kind of rigorous evidence to which OMB is referring is the kind that Nurse-Family Partnership (NFP) has been able to demonstrate over a long period of time. NFP is, to use language of the Coalition for Evidence-based Policy, an intervention “shown in well-conducted randomized controlled trials… to produce sizeable, sustained benefits to participants and/or society.”

NFP is a nurse-led home visitation program for first-time moms in low income households who voluntarily enroll no later than the 28th week of pregnancy. A registered nurse makes frequent home visits to help improve pregnancy outcomes, help parents learn how to provide responsible and competent care for their children, and help improve the economic self-sufficiency of the family. Regular visits by the nurse continue until the children are two years old.

Goodwill worked for three years to bring NFP to Indiana, and we have begun implementing the program in Indianapolis. At capacity, our registered nurses will be working with 600 moms at a time.

Thirty years of randomized controlled trials have produced evidence of the incredible long term benefits of NFP. For example:

    48% reduction in child abuse and neglect through child age 15
    56% fewer doctor and hospital visits due to childhood injuries through child age 2
    67% fewer behavioral and intellectual problems in children at age 6
    69% fewer convictions of nurse-visited children at age 15
    72% fewer convictions of mothers when children are at age 15
    83% increase in workforce participation by low-income, unmarried mothers by the time their child is four years old

The Rand Corporation calculated that every dollar invested in NFP results in a $5.70 return to society.

Some people don’t want to invest public dollars in programs such as these because, they emphasize, parents are responsible for giving their child a strong, healthy start. I agree that it’s the parent’s responsibility. However, when a parent is unable–for whatever reason–to exercise that responsibility well, the rest of us have a choice. We can invest up front to help prevent problems and develop human potential – or we can do as we’re now doing and continue to pay much more downstream for public assistance, remedial education, rehabilitation, incarceration, and in all the insidious ways we all pay when we have a poorly educated, under-skilled workforce.

It’s also important to remember that no child has any choice about the circumstances into which he or she is born.

If we really want more bang for our buck, we will begin shifting support from programs with marginal return to those that can demonstrate high, long-term benefits. Doing so will upset some people, but will result in a wiser, more effective use of the dollars that are available. The potential long-term benefits are enormous.

Improving Over Time

As I am writing this, Indianapolis – my home for nearly 40 years – is still basking in the overwhelming success of hosting Super Bowl XLVI. Those who led the multi-year effort did a magnificent job planning and executing a week-long series of events that exceeded almost everyone’s expectations. In fact, I suspect the only people who weren’t surprised may have been those who led the immense effort. They expected it to be great, and it was.

When there’s a major goal that captures the imagination of and mobilizes a lot of people, good things can happen. In the early 1960s, President Kennedy issued a challenge for the U.S. to put a man on the moon and return him safely to earth by the end of the decade. It happened. In a very different type of situation last year that some people liked and others didn’t, we saw uprisings in Egypt, Tunisia, and Libya that had a defined goal of overthrowing long-standing regimes. They succeeded, but now they are faced with the very different challenge of building a different kind of society.

Building a society, changing a culture, solving a major social problem are open-ended challenges that have no defined end. It’s harder to mobilize people around open-ended challenges and sustain their interest and involvement over time than it is for a task with a defined end goal within a time frame of a few years or less.

I’ve now led the same organization for the better part of four decades. Occasionally, someone will ask me what I’m most proud of in my career. My answer is always the same. It’s not any one development or accomplishment. Rather, it’s how far we’ve come over time. It’s not all about growth, although we have certainly grown a lot. More importantly, the organization functions at a much higher level than it did earlier in my career. We are much more effective and have much greater positive impact in the lives of people and in the communities in which we operate than was the case even a decade ago. I’m also more convinced than ever that the greatest accomplishments and life’s greatest rewards come from making and keeping long term commitments.

Organizational development and evolution over time are never linear. We have our ups and downs, our successes and our failures. It’s a never ending process that – at least in our case – involves a lot of small, incremental improvements and occasional major new developments. From time to time, we also have to stop doing things that have outlived their usefulness or that we have found are simply not a good fit. Of course, there are plenty of projects within the organization that have a defined beginning and end, and there are plenty of milestones along the way that are worth celebrating.

Some of the challenges we face in our society today have developed over a period of several decades. There is much debate over causes and solutions. One thing we can be sure of, though, is that there are no quick fixes. The time it will take to substantially reduce some of our societal problems will be measured in decades rather than years. To sustain the required effort and commitment long enough, we need to focus on a well-defined set of short, medium, and long term metrics, concentrate resources on improving those metrics, shift resources when necessary, and celebrate successes. Problems such as many of those we now face have resulted from a downward spiral over a long period of time. With enough concerted effort over a long enough period of time, we can create an upward spiral that will build on successes and eventually perhaps even sustain itself.

Adapting to Technological Changes

The fastest growing part of our organization is our ecommerce unit. By enabling us to sell many items for substantially more than they would sell for in a Goodwill store, our ecommerce operations enable us to be better stewards of the goods people give us. The growth of our ecommerce operations has also created a lot of jobs, as we currently have nearly 100 employees at clickgoodwill.com – over twice as many as we had at the beginning of this year.

Down through the years, technological changes have eliminated some jobs and created new ones. At Goodwill, for example, when I started my career we repaired radios and television sets. Doing so wasn't too difficult in those days. The sets used vacuum tubes (younger readers, look it up on Wikipedia), and we had a tube tester. Check the tubes, replace the bad ones, and many of the sets would work just fine. Vacuum tubes were eventually replaced by solid state electronics, and this effectively put an end to our repairing radios and TVs.

During those same years, we also repaired toasters and other small appliances. Over time, though, technological improvements in the manufacturing processes and increased sophistication of the products, coupled with rising labor costs, made many new small appliances less expensive than the cost of repairing broken ones. Fortunately, in more recent years, technological improvements have also helped create recycling and secondary markets for many products that can no longer be repaired economically.

Another example: From 1974 till 1992, we manufactured high quality oak file boxes for 3×5 and 5×8 cards for the federal government. For quite a few years we had 18 employees – most of them people with disabilities – who produced an average of 50,000 boxes a year. But over time, as the use of personal computers rose, the use of file cards fell and, consequently, the government didn’t need as many of the boxes. Eventually, the volume declined to the point where we exited that business.

Our involvement in online retailing began very slowly about twelve years ago after Goodwill in Orange County, CA created shopgoodwill.com. The Orange County Goodwill continues to maintain that 7-day auction site, which is designed to enable any Goodwill organization to post items on it. About five years ago, we began to increase our use of shopgoodwill.com, and we also began posting some books on several book-selling Web sites. We subsequently added CDs, DVDs, video games, and jewelry to the array of items we could effectively sell online. Better software and packaging equipment have improved our efficiencies to a remarkable degree, and we believe there is enormous additional growth potential in that part of our organization.

Of course, as is the case at most relatively large organizations, new technologies have created other entirely new departments at Goodwill. Known in many companies as IT (Information Technology), in our organization it’s TS (Technology Solutions). Composed of bright, talented people, TS keeps us connected, helps develop and optimize uses of technology to improve our effectiveness, and helps us be good stewards of our resources. As the organization continues to evolve, so too do the services of the Technology Solutions department.

While we’ve come a long way, we can be sure that technological changes will continue to create new challenges and opportunities for us. We can also be sure that if we do not adapt well enough to those changes, we will be left behind – less effective, perhaps irrelevant, and in a worst-case scenario maybe even extinct.