December 17, 2012
In this provocative exposé, the former CEO and COO of National Public Radio takes a critical view of today’s nonprofit world, calling for reform and a redefinition of what constitutes a charity. For anyone who has given time or money to not-for-profits, Stern’s critique will prove both disturbing and thought-provoking; he questions the value and efficacy of the more than 1.4 million not-for-profit organizations in the U.S., asserting that this industry is beholden to anecdotes rather than the rigorous study of results, leaving “little credible evidence that many charitable organizations produce lasting social value.” Stern systematically cites the failures and foibles of organizations like the Red Cross, as well as calling out college bowl games and college sports as multimillion-dollar organizations with charitable status. In addition, he discusses fraud, excessive compensation, and the lack of oversight from regulators. Donors, Stern argues, are frequently uninformed, give reactively, and often unintentionally create more harm than good. Stern’s praises organizations like the Gates Foundation, which have created a culture of accountability and measurement, and devotes a short chapter to what is necessary for reform to occur. An engrossing read, this look at the evolution and current state of the charitable world is sure to stimulate debate.
December 15, 2012
The former CEO of National Public Radio exposes the shortcomings of tax-deductible, not-for-profit organizations. Stern, currently CEO of Palisades Media Ventures, writes that a distressing percentage of the approximately 1.4 million charities are poorly managed and fail to accomplish the goals trumpeted to donors. Further, donors rarely examine the organizations to which they contribute, and government agencies offer little analysis of the performance of the charities. As for the small number of private groups that rank charities by performance, writes the author, the examinations are both superficial and focused on misleading measures. Stern emphasizes the importance of donors' measuring charities' actual performance versus promised performance prior to giving, much as they might examine for-profit corporations before investing. The author fills the text with insightful, vivid examples, including case studies from his former employer. It is fascinating to learn the behind-the-scenes saga of Joan Kroc's highly publicized $200 million donation to NPR and the mixed results of how NPR allocated the unexpected gift. Stern then contrasts that windfall to the less-publicized $1.5 billion gift from Kroc to the Salvation Army. For months, Stern explains, Salvation Army decision-makers debated whether to accept or reject the gigantic donation, because Kroc wanted the money spent in specified ways outside the traditional mission of the charity. Eventually, the organization accepted the money, but Stern delineates why that might have been an unsound decision and how the charity's performance might have suffered as a result. Eye-opening case studies include the absurdities of organizations such as hospitals and college football bowl-game organizers qualifying as tax-deductible charities since they often fail to spend donations for the public welfare. A trove of useful insider wisdom.
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February 15, 2013
Stern, corporate executive and former CEO of NPR, tells the story of how the charitable sector in the U.S. has lost its way because of the absence of market mechanisms that reward good work and punish failure. His research uncovered organizational and service failures in charities that refused to evaluate their programs and ignored poor results. There are approximately 1.4 million charities in this country with a workforce of 13 million and volunteers numbering 61 million; revenues total more than $1.5 trillion annually. Charitable activity accounts for 10 percent of the economic life of this country, says the author, seeing hope in a small movement that is currently rethinking how charities operate, and he is optimistic that tools will be developed so that contributors to charities will become investors rather than donors. Stern emphasizes that social investing takes work and urges donors to look beyond clever marketing campaigns for organizations that are transparent and accountable to stakeholders. Important and thought-provoking analysis.(Reprinted with permission of Booklist, copyright 2013, American Library Association.)