Goodwill’s evolution – an organic process

For years, I’ve considered the most unique aspect of Goodwill to be the way and the extent to which we blend business and a social mission. More recently, though, perhaps equally unique is the extent to which we are leveraging our resources and capabilities with those of others to create new opportunities that benefit people and communities. I’ll explain.

A lot of social problems have become worse over the last forty years despite massive increases in public spending and a huge proliferation of not-for-profit organizations. Part of the problem lies in the “silo” structure of the public sector and the fragmented nature of the not-for-profit sector. In many cases, organizations are doing very good work addressing pieces of a larger problem, but seldom have we been connecting the pieces well. As a result, we have not been solving the big problems.

A lot of our work at Goodwill is now focused on connecting pieces. Some of those exist within our own organization and some involve other organizations that have complementary capabilities. We see numerous examples of this, as Goodwill retail employees and Nurse-Family Partnership (NFP) moms enroll in an Excel Center or begin working toward a certification through a class taught by Ivy Tech or Vincennes University.

More examples: We have Eskenazi Health referring expectant mothers to NFP and also hiring graduates of The Excel Centers. We see Indianapolis Day Nursery Association offering employment to NFP moms, helping them work toward certifications, and providing high quality care for their children. And we see graduates of Goodwill-operated schools becoming employed with help from TalentSource, Goodwill’s job preparation and placement service.

The extent to which Goodwill is evolving into an array of networks that link services across organizational boundaries in a holistic, often whole family manner is unique. This approach brings high quality services together to make more effective use of existing community resources and result in greater lasting impact. With sufficient scale, this approach can play a role in reducing generational poverty.

The way we are evolving into this array of networks is not the result of a brilliant grand plan. Rather, it’s an organic process that is ongoing, and it’s largely a product of three primary factors:

  • A lot of smart, talented people who bring to their work not just their knowledge and skills, but also a strong commitment to what we are about – in other words, they bring their heads and their hearts.
  • A culture characterized, in part, by a constant desire to find ways to improve and further increase our long term impact in the lives of people and the communities where we operate. It’s also a culture in which people generally work well with each other.
  • Strong relationships with a lot of people in a lot of other fine organizations across all the sectors.

It’s also important to note that everything we do is built on a solid financial foundation that depends largely on the oldest part of Goodwill – our retail system, which provides jobs for 1300 people whose options are limited by disability or other significant barrier and that is, in turn, dependent on donations of used goods from and purchases by hundreds of thousands of central Indiana residents.

This organic evolutionary process results in a Goodwill that is constantly changing. We try things, we learn, we adapt as the world around us changes, and we evolve as an organization. It’s the approach we take to continue increasing long term impact and help reverse some of the negative trends we’ve seen in our society over the last forty years.

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The War on Poverty

In January 1964, President Johnson declared war on poverty. During the days leading up to and immediately following the 50-year observation of that declaration, many have commented on the progress, lack of progress, or outright failure of that “war.”

In the January 7, 2014 Wall Street Journal, Robert Rector of the Heritage Foundation noted that in the U.S., living standards among the poor are much improved over those of 50 years ago. He also pointed out that the “collapse of marriage in low income communities has played a substantial role in the declining capacity for self support.”

In the January 5, 2014 New York Times, Ron Haskins of the Brookings Institution also emphasized that “Children in single-parent families are more likely to be poor, fail in school, have mental health issues and be idle as young adults, all of which reduce self-sufficiency.” Haskins concluded his piece by stating that “we don’t need another war on poverty as much as we need to improve the programs we already have and create the conditions for more personal responsibility regarding education, work, marriage, and child bearing.”

In the same issue of the New York Times, Scott Winship of the Manhattan Institute emphasized that “expanding opportunity for poor kids will require that we ‘incentivize’ the right behaviors, attitudes, and values, through economic carrots and sticks. Culture, not just economics, must be a front in the war on immobility.”

And in the January 9 New York Times, Nicholas Kristoff emphasized the importance of early interventions including parent coaching to get pregnant women to drink and smoke less and to encourage at-risk moms to talk to their children more. Among the successful programs he mentioned is Nurse-Family Partnership, which Goodwill is implementing in Indianapolis.

Kristoff also emphasized the importance of programs that encourage jobs for the most at-risk groups, and both he and Rector mentioned the earned income tax credit as a benefit to the working poor and for society. On a related note, Harvard’s Gregory Mankiw wrote in the January 5 New York Times that in efforts to help those struggling at the bottom of the economic ladder, the most effective solution would be to increase the skills of those low-wage workers.

While there is general agreement that more needs to be done to reduce poverty, there is certainly no consensus on what should be added, increased, modified, or eliminated. Bringing this closer to home, though, reading these and numerous other commentaries has reinforced my belief that the directions we have taken at Goodwill are on target. The older youth and adults who enroll in our Excel Centers represent “low hanging fruit” in efforts to raise education attainment levels. In addition, our emphasis on continuing to support our graduates until they earn post-secondary credentials and become established in the workforce is likely to play a major role not only in helping our graduates become economically self-sufficient, but also in ensuring a quick economic return to society for its investment in our schools.

Nurse-Family Partnership is part of a long-term solution to generational poverty that also has a strongly positive economic return to society. In addition to improving pregnancy outcomes, NFP helps parents learn how to provide competent care that will enhance the health and development of their children. NFP also helps parents improve their economic self-sufficiency by developing plans for their future, continuing their education, and finding work.

Everything we do at Goodwill ultimately plays a part in helping individuals and families increase their economic self-sufficiency. Cumulatively, these efforts can – at least in our small corner of the world – begin to reduce generational poverty and the various social problems that accompany it.

Some Implications of Becoming a Large Organization

Over the last decade, we’ve had enormous growth in our organization. We now have over 3,000 employees, nearly two-thirds with limited vocational options because of a disability or other barrier. We also have over 3,100 students in the ten schools we operate and 450 first-time moms and expectant moms enrolled in Nurse-Family Partnership. Our total revenues this year will be approximately $130 million. For a not-for-profit, we are a big organization.

Our size has many positive aspects. We have been able to attract a higher level of managerial and professional talent than was possible before, and this has enabled us to become substantially more productive and decrease the percentage of our revenue we spend on overhead.

Even more importantly, our heightened capabilities have also made it possible for us to greatly enhance the scope and quality of our mission-related services and develop new approaches that have substantially increased our long term impact in the lives of people and in the communities in which we operate. The work we are doing today is by far the best in our history.

But there’s also a downside.

The bigger and more visible we are, the bigger target we become. In addition to having a lot of employees, students, and people served in various other parts of our organization, we now have 2 million donation transactions and 5 million customer transactions a year. Bottom line: We have a lot of opportunities to make people like us or mad at us. And nearly all of them have access to social media.

We are also a complex organization that has been changing rapidly – especially over the last five years. Regardless of how much we’ve done to tell our story, most people have no idea of much of what we do. Perception always lags reality.

Moreover, while we have a lot of wonderful people doing terrific work, our organization is composed of 3,000 human beings, and not one of us is perfect. All institutions have flaws, and despite all the good work we do and all the improvements we have made, there is nothing we do that can’t be improved even more.

We always hope that those who talk or write about us – for example, through social or mass media – will treat us fairly. Our positives far outweigh our shortcomings, and we hope for perspective, a sense of context, and balance. If someone publicly calls attention to a flaw or a mistake someone in our organization has made, we hope they will give proportionate attention to the good things we do. We also know, though, that in this day and age such hopes are usually unrealistic. As negative emotions tend to be stronger than positive emotions, negative stories seem to attract a lot more attention – viewers, listeners, readers – than positive stories.

So what must we do? Obviously, we need to find more effective ways to increase awareness of our mission-related services and impact. But there’s more. With greater size comes greater responsibilities, and we must hold ourselves to an ever higher standard. While continuous improvement has been one of our Five Basic Principles for 20 years, we have to do more to improve every aspect of what we do. There is never any room for complacency. We must constantly work to raise our game.

And regardless of how others – individuals or media outlets – might treat us, we must continue to treat others as we would want to be treated. We must keep our focus on the work to be done, acknowledge and correct our mistakes when we make them, and continue to uphold our values and the basic principles by which we operate. And we will continue to become ever better stewards of all our resources as we work to help improve lives and strengthen communities. Because – even if others don’t recognize it – that is who we are.

A Macro Approach to Reduce Social Problems

As I’ve written before, despite the spending of billions of dollars by the public and not-for-profit sectors on all kinds of social problems, progress toward solving some of the problems is slow or nonexistent. One reason is that many of the problems are interrelated – they reinforce and compound each other, yet we tend to treat each of them in isolation from the others.

The public sector operates through silos that generally don’t communicate well with each other, while the not-for-profit sector is incredibly fragmented. Individually, many organizations do good work. But collectively we are not solving the big problems.

Bottom line: Overall, resources are not being utilized as effectively as they should be. Different approaches are needed. Here’s one.

  • At a high level (e.g. state or community), develop a scorecard that includes goals and metrics toward which resources can be aligned. High level goals should be designed to:
    • Drive up desirable social indicators such as high school graduation rates, post-secondary enrollment and completion rates, etc.
    • Drive down undesirable social indicators such as obesity, smoking, incidence of pregnancy among unmarried teens, recidivism rate of first-time offenders, etc.
  • Create networks of organizations that leverage their resources to accomplish what none could accomplish on its own. Each network must have one or more clear, measurable objectives that are aligned with the overall high level goals. The participating organizations should have complementary resources and mutual trust in one another. Their respective roles must be clearly defined, and they should strive for collective impact.

There must be a “backbone” organization with a strong infrastructure at the core of the network. The backbone organization “owns” the overall effort and is accountable for the results. It creates the network, keeps the various parts aligned toward the common goal, provides support as needed to the various players, and tracks and analyzes data. In some situations, a backbone organization might help strengthen the network by strengthening a strategically important partner. For example, the backbone organization might provide back office services to a partner organization that provides important direct services, but has a weak infrastructure. Of course, there might also be times when the backbone organization will find it necessary to replace a partner.

Individual organizations that desire to be part of a network must:

  • Understand their context. How does what they do relate to what others around them are doing? Where do they fit in the communities in which they operate?
  • Where do they fit in the field(s) in which they are engaged?
  • Have a realistic understanding of their strengths.
  • Determine how they might add unique value to help maximum long term impact.

The philanthropic sector can help by:

  • Supporting the development and/or growth of backbone organizations.
  • Supporting networks that are collectively working in focused ways toward a big goal.
  • Giving preference to evidence-based programs that have demonstrated long term impact.

Governments can help by:

  • Giving preference to funding of evidence-based programs.
  • Fostering the use of impact investing pay-for-success approaches that increase the productivity of tax dollars.
  • Creating their own networks to better leverage resources across public sector silos.
  • Focusing more on the change they want to occur as a result of the program or service they are funding and being less prescriptive about how the work must be done. They should focus less on how much is spent in various expense categories and more on the cost per outcome and, where possible, on ROI metrics.
  • As much as possible, ensuring that bureaucracies function in ways that are likely to enhance rather than detract from accomplishment of the goal.

Others might have better ideas than these. Regardless, the status quo is not an option.

Goodwill’s Directions

Over the past decade, Goodwill in central Indiana has developed and now operates several small high schools. More recently, we have launched services for very young children and their moms. These are not areas in which Goodwill Industries around the country have typically been directly involved, and I am occasionally asked why we have moved in those directions.

At Goodwill, we have an overriding desire to help improve lives and communities and, as best we can, help solve serious social problems. We generally prefer to:

  • Strive for long term impact
  • Take a holistic approach with individuals and, in many cases, with their families
  • Enhance education levels and the attainment of credentials that will improve an individual’s employability and earning potential
  • Prevent problems and develop potential rather than engage in remediation

Strategic planning in our organization has morphed from a discrete event we used to do every few years into a strategic thinking process that is continuous. Changes in our environment are occurring at a very rapid rate, and we find ourselves with more new opportunities than ever before.

Every major step we have taken over the past twenty years has been a result of (1) what we have learned from previous experiences, (2) what we know about the communities in which we operate, and (3) how we believe we can have the greatest possible impact in the lives of people and in the larger community.

Key factors that have heavily influenced our recent directions include:

  • A recognition that many major social indicators have become worse over the last 30-40 years, despite massive increases in public spending and a huge proliferation of not-for-profit organizations. Many existing systems have not adapted well to changes that have taken place in our society. The silo structure of the public sector and the fragmented structure of the not-for-profit sector are part of the problem. Fragmented approaches have not worked and will not work to solve complex social problems, regardless of how much money is made available. Neither will highly bureaucratic, overly prescriptive approaches. One size does not fit all.
  • A belief that there are no quick fixes to many of our society’s problems, and we must not allow ourselves to be satisfied with gradual, incremental progress. We need long term thinking and long term solutions. We also need a strong sense of urgency.
  • A recognition that many of the pieces needed to solve societal problems exist, but in relative isolation from other pieces that could also be part of a long term solution.

I believe that two of the most important elements necessary to reduce generational poverty and its accompanying social problems are:

  • Raise the education levels of children, youth, and adults in low income households. This is why we developed and operate the Indianapolis Metropolitan High School and The Excel Centers.
  • Ensure that children are behaviorally and cognitively ready when it is time for them to enroll in kindergarten. There is powerful evidence of the enormous positive long term impact of high quality early childhood development programs for children in low income households. We must greatly increase the availability of such opportunities – and there must be a strong sense of urgency to do so. Goodwill has taken a major step in this direction by launching Nurse-Family Partnership in Marion County.

It’s also important to emphasize that on all of these initiatives we are working with a lot of other organizations that have compatible interests and complementary resources. In some cases, those relationships are evolving into networks that I believe will play an increasingly important role in developing human potential and reducing serious social problems.