Five Questions for Elizabeth T. Boris
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October 4, 2006 1. Why was a Center on Nonprofits and Philanthropy created at the Urban Institute? The Atlantic Philanthropies had been promoting research on the nonprofit sector for years and suggested starting a new center here. It would house the National Center for Charitable Statistics (NCCS) - the entity that takes the IRS Form 990 annual financial report for charities and puts it into databases for research purposes. Urban Institute had a commitment to data, knew how to handle the wealth of information, and had the resources. The feeling was that NCCS wouldn't get lost here as it might in a university department or association. And we would know how to make the data available to researchers, build the tools, maintain relationships with the IRS [Internal Revenue Service], researchers, nonprofits, et cetera. The new center became the intersection between policy and nonprofits-an important intersection because, before the 1980s, there was little data on nonprofit organizations. A researcher would be hard pressed to explain the nonprofit sectors' importance, its economic impact, or its role in communities. That wasn't the case by 1996. But we needed a clearinghouse so the data could be cleaned, classified and easily accessible. We needed to entice people into doing research on many important questions. The experience of the field had been for lawmakers to hear of a problem or a scandal and then call for legislation without much analysis of the scope of the problem or the impact of legislation. We needed the objective data to provide good policy advice and information for policy makers to make good decisions. That's what Urban is all about. It was the perfect Washington marriage. 2. What do you consider the Center's major contributions over the past decade? We've compiled data on nonprofit organizations that go back to 1982. We have 150 different data sets and we're adding more all the time. We have different compilations of IRS data. These data are available on the web so researchers can pick and choose which data sets they want to use, which years, and do key word searches. Thanks to our work, people can now see the Forms 990 on the Internet. Before, they had to write to the IRS or to the charity, and then wait for the organization to send it, which could take forever. Our work over the past 10 years renders the nuts and bolts of nonprofits much more transparent to observers. Organizations are required to make the information public, but they could drag their heels. One important discovery over the past 10 years is the financial contributions of nonprofits. Washington, D.C. and New York City know how many nonprofits they have and how many people nonprofits employ. We now know the economic contribution of those nonprofits. For example, CNP's study of human service providers in Pittsburgh was a catalyst for a town hall meeting where leaders got together and talked about what kind of an infrastructure they have for the under-served in their communities. When they learned that most of those nonprofits were small and financially vulnerable, leaders discussed how to support the nonprofits serving their community. Our comparisons showed that some cities of similar size to Pittsburgh did a better job of supporting nonprofits. Our book, Nonprofits and Government: Collaboration and Conflict, (UI Press 1999, second edition 2006) is the first compilation that really looks at how nonprofits and government relate, not only the financing and comparing to government, but also in religion, in the arts, and where the rubber hits the road in terms of conflict and collaboration. The new edition of that book updates the data, and adds two chapters. 3. Has the Center investigated the role of nonprofits in such national disasters as 9/11 and Hurricane Katrina? Yes. After 9/11 we held an Emerging Issues Seminar. And, we brought together folks that were involved in New York and Washington and also in the Oklahoma disaster. We also brought together Red Cross, United Way, and other major charities to discuss lessons learned. We held another Emerging Issues Seminar on Hurricane Katrina in December 2005. Right after the Katrina disaster, we surveyed nonprofits in New Orleans in collaboration with the Louisiana Association of Nonprofit Organizations. The results were widely cited by the media and used by local organizations to illustrate the devastation nonprofits suffered in the storm-struck areas. Now we have an Allstate Foundation grant to synthesize the research and to feed it back to the nonprofit community as it plans for rebuilding. What we've learned in these big disasters is that everybody provides food, water, and shelter in the immediate aftermath. But by day two or day three, there's got to be a way for the nonprofits to get resources and to coordinate their work with others. That's the role that's been falling by the wayside. If there are 50,000 people in a community that require services, someone has to make sure there's enough money and resources and medical supplies to deal with that 50,000 … someone to say, here are the five organizations that are going to work together. After Katrina, many nonprofits not only lost their buildings and their staff, but they ran up bills. Donors expect that the money should go from the giver's hand to the person in need, with nothing for overhead and nothing for logistics. But the fact is that it takes resources and people and money. And that money has to be banked and checks written. It's not that the charities are greedily paying their people too much or siphoning off the money. 4. Are media reports on excessive compensation and expenses at large foundations and nonprofits valid? Some organizations use overhead inappropriately. United Way was maybe the most visible and flagrant. Most of those cases seem to be found by the press. But we're talking about a million organizations. The fact that there is misuse of money in some of them is probably no surprise, human nature being what it is. The oversight and regulation of these organizations is next to nonexistent. The charitable sector would welcome oversight. When nobody's watching the store, folks who want to get away with something will inevitably do so. We've looked at expenses and overhead in the 10,000 largest foundations. And while we did find a handful of very high salaries that couldn't be explained and some high overhead expenses that really should be looked into, the problem hadn't spread to hundreds of organizations. Of the 70,000 foundations, we were looking at only the top 10,000. But the majority had no charitable expenses at all. No staff. They're all volunteer run. It's good news that the press and the Senate Finance Committee all pay attention to nonprofit activities because they raise the ante for oversight. Maybe the IRS will get more money to oversee the charitable sector. But what's irksome is that nonprofits are rated, not on their outcomes, but on the amount they pay for administrative and fund raising costs. So the fact that an additional dollar invested in overhead might get $10 more in output is missed. Our study of overhead costs found agencies with their roofs leaking and computers that didn't talk to one another. That's a waste of good executive time-too many creative people trying to just glue things together. But their overhead rate is low. Something is wrong with this picture. This requires a paradigm change. 5. What are the Center's plans for the future? Governance is one big issue that we're taking on. We've done the first national survey - a random sample of nonprofit organizations to investigate patterns and governance, looking at how many are already implementing things like an annual audit. We'd like to delve more deeply into some of the areas that we identify in the survey. It's certainly of great interest to Congress. Francie Ostrower's work on foundation effectiveness finds that foundations don't have clear standards for what are effective practices. What's interesting is that over the years the executive directors and the boards recognize and accept good practices in the field, but not all foundation leaders adhere to them. The first step is to get people thinking that effective practices should be followed. A lot more could be done to increase the share of income donated to charities if effective practices were identified and benchmarks met. More investment in fundraising might leverage more resources for the nonprofit sector. Understanding these dynamics is a challenge. Another growing issue is the commercial activities of nonprofits. We have a book coming out on nonprofits and business. Nonprofits are pushing the boundary between nonprofits and business - everybody's being urged to raise fees for service, raise more revenue, and be more entrepreneurial. We must understand these dynamics without losing sight of the valuable non-economic roles that nonprofits play in creating and maintaining public participation in a civil society. We will focus on these aspects as well. |
Elizabeth T. Boris