Will More Regulation Help This Sector Succeed?

This morning, I started to respond to a post at the blog of the National Committee for Responsive Philanthropy – an organization I have recently come to know and respect.

The response got so long that I thought I would instead post it here.

The questions raised by NCRP board member Gary Snyder were multiple. Here are just a few:

• Why is the IRS monitoring and giving training programs to charities when there is a large network of organizations (IS, Board Source, state associations, more) that are doing the same?
• Is the IRS being “helpful” and “watchful” going to eliminate the taint on charitable sector?
• Where are the efforts to instill confidence to a sector that has diminishing trust by donors?
• Has the vast amount of money spent on board training shown any benefit?

Herewith, my response to Gary:


Several thoughts arise in considering your own thoughtful questions. I offer these in no particular order.

First, clearly there are forces concerned about this sector’s performance. However, rather than aim their considerable talents at results-focused questions (“How can we ensure we are achieving more significant improvement in communities?”) they are aiming at a handful of easily quantifiable contributing factors. Money. Conflict of interest. Etc.

Second, the “powers that be” tend to have a patronizing attitude towards this sector, believing we are all “cute little well-meaning do-gooders” who cannot be trusted to create strong, accountable systems. It is analogous to having a machine shop with faulty systems that preclude great productivity, where the machinists know precisely what it would take to fix the problem, but instead the owners keep blaming the machinists for the lack of productivity.

Individuals go where systems lead them.  Systems in this sector are not set up to create visionary improvement in our communities.  Organizational planning doesn’t aim at creating significant community change, governance clearly doesn’t aim towards it, and competitive funding systems create a “competing for scarce resources” culture (and then complain that everyone is competing!).

The only answer we have found that actually works in this round-robin is to stop blaming (and from that blame, aiming all our fix-it power at) the handful of symptoms that happens to be easy to see. The answer instead lies in aiming at the future we do want for our world, and reverse engineering what this sector would need to be to achieve that.

Until we stop randomly trying to treat the sector’s symptoms, we are doomed to be asking the same questions you raise, over and over, while communities still show little sign of improving.


So what is the answer? It begins by understanding the systems that led us to this point – the cause and effect that got us here.  The history of that cause-and-effect can be found in the Introduction to The Pollyanna Principles.

The answer lies in making the change-the-world difference we committed to make. You can bet if this sector was creating visionary and rapid change in our world, there would be less impetus on the part of powers-that-be to wonder just what it is folks are doing with “all that money.”

And how does that address the “accountability and transparency” issue? Easy. We cannot create significant change if we are standing on the roof throwing dollar bills to the wind. We can only create such change if we are accountably watching over the means – the money, the policies, the etc. and the etc.

If we aim our accountability at risk management compliance, will we even remember to look up and see the reason we are doing this work in the first place? Or is it more likely we will just always find more things we are scared might go wrong?

If, however, we aim our accountability at the visionary change that drives us to do this work in the first place, we will use effective and solid means towards that end.  We will be accountable for the money on the way to being accountable for creating change.

The answers, as Gary Snyder suggests, are right here in the room.

How can we re-aim this sector’s systems towards accountability for end results AND accountability for the means? Find out in The Pollyanna Principles.

2 Responses to Will More Regulation Help This Sector Succeed?

  1. It’s unsurprising that an organization focused on money would use the Business Model to model community benefit organizations. (I just read that part!) Again, it’s all about shifting perspective rather than treating symptoms.

    The whole thing reminds me of the Daniel Quinn quote: “If the world is to be changed, it will not be by old minds with new programs, it will be by new minds with no programs at all.”

  2. Pace:
    Nice to see you here! Thanks for your comment (especially love the quote!) – and I love watching your reading progress!

    Having seen some forward-thinking funder-driven initiatives to re-think these questions (including the work of NCRP, from whence the initial blog post that prompted my post here), I am not wholly pessimistic about their ability to re-think. So I think it will take both – those who are on the outside, as well as those on the inside who are willing to be uncomfortable for a while, as change and discomfort do tend to go hand in hand.

    Can’t wait to see more “aha’s” for you as you keep reading!! (And BTW your book is doing the same for me – much good stuff there!)